UNDERWRITING AGREEMENT between CAPITAL TEN ACQUISITION CORP. and LADENBURG THALMANN & CO. INC. Dated: ____________, 2008
between
and
LADENBURG
▇▇▇▇▇▇▇▇ & CO. INC.
Dated:
____________, 2008
____________,
▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear
Sirs:
The
undersigned, Capital TEN Acquisition Corp., a Delaware corporation (“Company”),
hereby confirms its agreement with Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (being
referred to herein variously as “you,” “Ladenburg” or the “Representative”) and
with the other underwriters named on Schedule I hereto for which Ladenburg
is
acting as Representative (the Representative 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
7,500,000 units (“Firm Units”) of the Company, at a purchase price (net of
discounts and commissions) of $7.44 per Firm Unit (including discounts and
commissions of $0.24 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 and commissions of $0.24 referred to in the preceding
sentence 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 Ladenburg informs the Company of
its
decision to allow earlier separate trading, but in no event will Ladenburg
allow
separate trading until the preparation of an audited balance sheet of the
Company reflecting receipt by the Company of the proceeds of the Offering and
the filing of a Current Report on Form 8-K with the Securities and Exchange
Commission (the “Commission”) by the Company which includes such balance sheet.
Each Warrant entitles its holder to exercise it to purchase one share of Common
Stock for $6.00 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 five-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
1.1.2 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 commencement of trading of the Firm
Units or at such earlier time as shall be agreed upon by the Representative
and
the Company at the offices of the Representative or at such other place as
shall
be agreed upon by the Representative and the Company. The hour and date of
delivery and payment for the Firm Units are called “Closing Date.” Payment for
the Firm Units shall be made on the Closing Date at the Representative’s
election by wire transfer in Federal (same day) funds or by certified or bank
cashier’s check(s) in New York Clearing House funds, payable as follows:
$56,850,000 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 Representative may request
in
writing at least two full business days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Units for
delivery at least one full business day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender
of
payment by the Representative for all the Firm Units.
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 1,125,000 units from the
Company (“Over-allotment Option”). Such additional 1,125,000 units are
hereinafter referred to as “Option Units.” The Firm Units and the Option Units
are hereinafter collectively referred to as the “Units,” and the Units, the
shares of Common Stock and the Warrants included in the Units and the shares
of
Common Stock issuable upon exercise of the Warrants are hereinafter referred
to
collectively as the “Public Securities.” The purchase price to be paid for the
Option Units will be the same price per Option Unit as the price per Firm Unit
set forth in Section 1.1.1 hereof.
1.2.2 Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be
exercised by the Representative as to all (at any time) or any part (from time
to time) of the Option Units within 45 days after the Effective Date. The
Underwriters will not be under any obligation to purchase any Option Units
prior
to the exercise of the Over-allotment Option. The Over-allotment Option granted
hereby may be exercised by the giving of oral notice to the Company by the
Representative, which must be confirmed in writing by overnight mail or
facsimile transmission setting forth the number of Option Units to be purchased
and the date and time for delivery of and payment for the Option Units (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 Representative, at the offices of the Representative or at
such
other place as shall be agreed upon by the Company and the Representative.
Upon
exercise of the Over-allotment Option, the Company will become obligated to
convey to the Underwriters, and, subject to the terms and conditions set forth
herein, the Underwriters will become obligated to purchase, the number of Option
Units specified in such notice.
1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, payable
as follows: $7.68 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 Representative requests not
less than two full busi-ness days prior to the Closing Date or the Option
Closing Date, as the case may be, and will be made available to the
Representative for inspection, checking and packaging at the aforesaid office
of
the Company’s transfer agent or correspondent not less than one full business
day prior to such Closing Date.
2
1.3 Representative’s
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or their
designees) on the Effective Date an option (“Representative’s Purchase Option”)
for the purchase of an aggregate of 375,000 Units (“Representative’s
Units”) for an aggregate purchase price of $100. Each of the Representative’s
Units is identical to the Firm Units. The Representative’s Purchase Option shall
be exercisable, in whole or in part, commencing on the later of (i) one year
from the Effective Date and (ii) the consummation of a Business Combination
and
expiring on the five-year anniversary of the Effective Date at an initial
exercise price per Representative’s Unit of $10.00 per Representative’s Unit.
The Representative’s Purchase Option, the Representative’s Units, the Warrants
underlying the Representative’s Units (the “Representative’s Warrants”) and the
shares of Common Stock issuable upon exercise of the Representative’s Warrants
are hereinafter referred to collectively as the “Representative’s Securities.”
The Public Securities and the Representative’s Securities are hereinafter
referred to collectively as the “Securities.” The Representative understands and
agrees that there are significant restrictions against transferring the
Representative’s Purchase Option during the first year after the Effective Date,
as set forth in Section 3 of the Representative’s Purchase Option.
1.3.2 Payment
and Delivery.
Delivery and payment for the Representative’s Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Underwriters, upon payment
therefor, certificates for the Representative’s Purchase Option in the name or
names and in such authorized denominations as the Representative may request.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriters as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Commission a regis-tration statement and an amendment
or amendments thereto, on Form S-1 (File No. 333-147741), for the
registration of the Public Securities under the Securities Act of 1933, as
amended (the “Act”), which registration statement and amendment or amendments
have been prepared by the Company in conformity with the requirements of the
Act, and the rules and regulations (“Regulations”) of the Commission under the
Act. Except as the context may other-wise 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 State-ment,” the preliminary prospectus included in the
Registration Statement immediately prior to the Effective Date is hereinafter
called the “Preliminary Prospectus” 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 here-inafter 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 001-______)
providing for the registration under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), of the Units, the Common Stock and the Warrants.
The registration of the Units, Common Stock and Warrants under the Exchange
Act
has been declared effective by the Commission on the date hereof.
2.2 No
Stop Orders, Etc.
Neither
the Commission nor, to the Company’s knowledge, any state regulatory authority
has issued any order or threatened to issue any order preventing or suspending
the use of any Prelimi-nary Prospectus or has instituted or, to the Company’s
knowledge, threatened to institute any proceedings with respect to such an
order.
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2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
As
of the
Applicable Time (as defined below) and as of the Closing Date and the Option
Closing Date, the Preliminary Prospectus did not or will not include, any untrue
statement of a material fact or did not omit or as of the Closing Date or the
Option Closing Date will not omit, to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. At the time the Registration Statement became
effective, at the date of this Agreement and at the Closing Date and the Option
Closing Date, the Registration Statement conformed and will conform in all
material respects to the requirements of the Act and the Regulations and did
not
and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus, at the time the Prospectus
was issued and at the Closing Date and the Option Closing Date, conformed and
will conform in all material respects to the requirements of the Act and the
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact 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 information furnished to the Company with respect to the
Underwriters by the Representative expressly for use in the Registration
Statement or Prospectus or any amendment thereof or supplement
thereto.
As
used
in this Agreement, “Applicable
Time” means 4:30
P.M., New York time, on the date of this Agreement.
2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement, the
Preliminary Prospectus 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, the Preliminary Prospectus 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
and that (i) is referred to in the Pro-spectus or the Preliminary 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 enforce-ability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and none
of
such agreements or instru-ments has been assigned by the Company, and neither
the Company nor, to the Company’s knowledge, any other party is in breach or
default thereunder and, to the Company’s knowledge, no event has occurred that,
with the lapse of time or the giving of notice, or both, would constitute a
breach or default thereunder. To the Company’s knowledge, performance by the
Company of the material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental
laws
and regulations.
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, con-trolled by, or
under common control with the Company since the Company’s formation, except as
disclosed in the Registration Statement, the Preliminary Prospectus and the
Prospectus.
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2.3.4
Regulations.
The
disclosures in the Registration Statement, the Preliminary Prospectus and the
Prospectus 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.
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 Regis-tration
Statement, the Preliminary Prospectus and the Prospectus, except as otherwise
spe-cifically 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, the Preliminary Prospectus and the Prospectus, and
except as may otherwise be indicated or contemplated herein or therein, the
Company has not (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money; or (ii) declared or
paid any dividend or made any other distribution on or in respect to its equity
securities.
2.5 Independent
Accountants.
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP (“▇▇▇▇▇▇”), whose report is filed with the Commission as part
of the Registra-tion Statement, are independent accountants as required by
the
Act and the Regulations. ▇▇▇▇▇▇ 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, the Preliminary Prospectus and the
Prospectus fairly present the ▇▇▇▇▇-cial 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, the Preliminary Prospectus and the Prospectus present
fairly the information required to be stated therein. The summary financial
data
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus present fairly the information shown thereon and have been compiled
on a basis consistent with the audited financial statements presented therein.
No other financial statements or schedules are required to be included in the
Registration Statement, the Preliminary Prospectus or the Prospectus. The
Registration Statement, the Preliminary Prospectus and the Prospectus disclose
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 Preliminary Prospectus and
the
Prospectus duly authorized, issued and outstanding capitalization as set forth
in the Registration Statement, the Preliminary Prospectus and the Prospectus.
Based on the assumptions stated in the Registration Statement, the Preliminary
Prospectus 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, the Preliminary Prospectus 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.
5
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 pre-emptive 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
Regis-tration Statement, the Preliminary Prospectus 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 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 lia-bility 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, the
Preliminary Prospectus and the Prospectus. When issued, the Representative’s
Purchase Option, the Representative’s Warrants and the Warrants will con-stitute
valid and binding obligations of the Company to issue and sell, upon exercise
thereof and payment of the respective exercise prices therefor, the number
and
type of securities of the Company called for thereby in accordance with the
terms thereof and such Representative’s Purchase Option, the Representative’s
Warrants and the Warrants are enforceable against the Company in accordance
with
their respective terms, except (i) as such enforce-ability 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.
2.8.3 Insider
Warrants.
The
Company’s officers and directors (the “Insider Purchasers”) have
committed to purchase an aggregate of 2,550,000 Warrants (“Insider Warrants” and
together with the shares of Common Stock underlying the Insider Warrants,
collectively referred to as the “Insider Securities”) at $1.00 per Warrant (for
an aggregate purchase price of $2,550,000) from the Company upon consummation
of
the Offering. The Insider Securities have been duly authorized and, when issued
and paid for in accordance with the Private Placement Purchase Agreements
(“Private Placement Purchase Agreements”) and the Insider Warrants, 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
Insider 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 Insider Securities has been duly and
validly taken.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Registration Statement, the Preliminary Prospectus and
the
Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity
and Binding Effect of Agreements.
This
Agreement, the Warrant Agreement (as defined in Section 2.21 hereof), the Trust
Agreement, the Office Services Agreement (as defined in Section 2.29 hereof),
the Private Placement Purchase Agreements, the Escrow Agreement (as defined
in
Section 2.22.2 hereof) and the Registration Rights Agreement (as defined in
Section 2.22.3 hereof) have been duly and validly authorized by the Company
and,
when executed and delivered, and the Representative’s Purchase Option, has been
duly and validly authorized by the Company and, when executed and delivered,
will constitute, the valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except (i) as
such enforceability may be limited by bank-ruptcy, insolvency, reorganization
or
similar laws affecting creditors’ rights generally, (ii) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
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2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Representative’s Purchase Option, the Trust Agreement,
the Office Services Agreement, the Private Placement Purchase 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 2.24 hereof; (ii) result in any violation
of the pro-visions of the Certificate of Incorporation or the Bylaws of the
Company; or (iii) violate any existing applicable law, rule, regu-lation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
business.
2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its
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 Registration
Statement, the Preliminary Prospectus and the Prospectus. The disclosures in
the
Registration Statement, the Preliminary Prospectus and the Prospectus 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 con-sents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Trust Agreement and the Escrow Agreement
and as contemplated by the Registration Statement, the Preliminary Prospectus
and the Prospectus, except with respect to applicable federal and state
securities laws.
7
2.14 D&O
Questionnaires.
To the
Company’s knowledge, all information contained in the questionnaires
(“Questionnaires”) completed by each of the Company’s officers and directors and
each of the Company’s stockholders prior to this Offering (“Initial
Stockholders”) and
provided to the Underwriters as an exhibit to his, her or its Insider Letter
(as
defined in Section 2.22.1) 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 Company’s knowledge, threatened
against, or involving the Company or, to the Company’s knowledge, any Initial
Stockholder, which has not been disclosed, that is required to be disclosed,
in
the Registration Statement, the Preliminary Prospectus and the Prospectus or
the
Questionnaires.
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its state of incorporation, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the assets, business or operations of
the
Company.
2.17 Stop
Orders.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any part thereof and has not
threatened to issue any such order.
2.18 Transactions
Affecting Disclosure to FINRA.
2.18.1 Finder’s
Fees.
Except
as described in the Registration Statement, the Preliminary Prospectus and
the
Prospectus, there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder’s, consulting or origina-tion
fee by the Company or any Initial Stockholder with respect to the sale of the
Securities hereunder or any other arrangements, agreements or understandings
of
the Company or, to the Company’s knowledge, any Initial Stockholder that may
affect the Under-writers’ compensation, as determined by the Financial Industry
Regulatory Authority (“FINRA”).
2.18.2 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
FINRA member or (iii) to any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within the twelve
months prior to the Effective Date, other than payments to
Ladenburg.
2.18.3 Use
of
Proceeds.
None of
the net proceeds of the Offering will be paid by the Company to any
participating FINRA 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 Registration Statement, the Preliminary Prospectus and
the
Prospectus.
2.18.4 Insiders’
FINRA Affiliation.
Based
on the Questionnaires, except as set forth on Schedule 2.18.4, no officer,
director or any beneficial owner of the Company’s unregistered securities has
any direct or indirect affiliation or association with any FINRA member. The
Company will advise the Representative and its 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
FINRA member.
2.19 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Registration
Statement, the Preliminary Prospectus and 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.
8
2.20. 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.
2.21 Warrant
Agreement.
The
Company has entered into a warrant agreement with respect to the Warrants,
the
Representative’s Warrants and the Insider Warrants with Continental Stock
Transfer & Trust Company substantially in the form annexed as Exhibit 4.4 to
the Registration Statement (“Warrant Agreement”).
2.22 Agreements
With Initial Stockholders.
2.22.1 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 through 10.6 to the Registration Statement
(“Insider Letters”), pursuant to which each of the Initial Stockholders of the
Company agrees 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.
2.22.2 Escrow
Agreement. The
Company and the Initial Stockholders have entered into an escrow agreement
(“Escrow Agreement”) with Continental Stock Transfer & Trust Company
(“Escrow Agent”) substantially in the form annexed as an exhibit to the
Registration Statement, whereby the Common Stock owned by the Initial
Stockholders will be held in escrow by the Escrow Agent, until one year after
the consummation of a Business Combination. During such escrow period, the
Initial Stockholders shall be prohibited from selling or otherwise transferring
such shares (except as 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 Ladenburg.
2.22.3 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
an exhibit 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, the
Preliminary Prospectus and the Prospectus.
2.22.4 Private
Placement Purchase Agreements.
The
Company has entered into the Private Placement Purchase Agreements substantially
in the form annexed as an exhibit to the Registration Statement with the Insider
Purchasers to purchase the Insider Warrants. Pursuant to the Private Placement
Purchase Agreements, the Insider Purchasers have placed the purchase price
for
the Insider Warrants in escrow prior to the date hereof. Simultaneously with
the
consummation of the Offering, such purchase price shall be deposited into the
Trust Fund pursuant to the Trust Agreement.
9
2.23 Intentionally
Omitted.
2.24 Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering substantially in the form annexed as an exhibit to the Registration
Statement.
2.25 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 would reasonably be expected to materially affect his
ability to be an Initial Stockholder, employee, officer and/or director of
the
Company.
2.26 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 the
Preliminary Prospectus
and 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.
2.27
Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.28
Related
Party Transactions.
There
are no business relationships or related party transactions involving the
Company or any other person required to be described in the Preliminary
Prospectus and the Prospectus that have not been described as
required.
2.29 Office
Services.
The
Company has entered into an agreement (“Office Services Agreement”) with Capital
TEN Partners, LLC (“Affiliate”) substantially
in the form annexed as an exhibit to the Registration Statement
pursuant
to which the Affiliate will make available to the Company general
and administrative services including office space, utilities and secretarial
support
for the
Company’s use for $7,500 per month.
2.30 Loans.
The
Affiliate has provided to the Company a line of credit of up to $250,000, of
which borrowings in the amount set forth in the Prospectus were outstanding
on
the Effective Date (the “Insider Loan”). The Insider Loan does not bear any
interest and is repayable by the Company on the earlier to occur of (i) October
29, 2008 or (ii) the date on which the Company consummates an initial public
offering of its securities.
2.31 American
Stock Exchange Eligibility.
As of
the Effective Date, the Public Securities have been approved for listing on
the
American Stock Exchange (“AMEX”). There is and has been no failure on the part
of the Company or any of the Company's directors or officers, in their
capacities as such, to comply with (as and when applicable), and immediately
following the effectiveness of the Registration Statement the Company will
be in
compliance with, Part 8 of the American Stock Exchange’s Company Guide, as
amended.
10
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement.
The
Company will deliver to the Representative, prior to filing, any amendment
or
supplement to the Registration Statement or the Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a Prospectus is required to be delivered under the Act, the
Company will use commercially reasonable efforts to comply with all
require-ments 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 supple-mented, includes an untrue statement
of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under
which they were made, not misleading, or if it is necessary at any time to
amend
the Prospectus to comply with the Act, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to
Section 3.1 hereof, an appropriate amendment or supplement in accordance with
Section 10 of the Act.
3.2.2 Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424(b)
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 (except in connection with a going-private
transaction), 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. During this period of time, the Company will not deregister the
Units under the Exchange Act without the prior written consent of
Ladenburg.
3.2.4 Ineligible
Issuer.
At the
time of filing the Registration Statement and at the date hereof, the Company
was and is an “ineligible issuer,” as defined in Rule 405 under the Securities
Act. The Company has not made and will not make any offer relating to the Public
Securities that would constitute an “issuer free writing prospectus,” as defined
in Rule 433, or that would otherwise constitute a “free writing prospectus,” as
defined in Rule 405.
3.3 Blue
Sky Filings.
The
Company will endeavor in good faith, in cooperation with the Representative,
at
or prior to the time the Registration Statement becomes effective, to qualify
the Public Securities for offering and sale under the securities laws of such
jurisdictions as the Representative may reasonably desig-nate, provided that
no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be sub-ject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
juris-diction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all commercially reasonable efforts to file and make such
statements or reports at such times as are or may be required by the laws of
such jurisdiction.
3.4 Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge, from
time to time during the period when the Preliminary Prospectus and 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 Registra-tion 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.
11
3.5 Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use all commercially reasonable efforts to cause the Registration
Statement to remain effective and will notify the Representative immediately
and
confirm the notice in writing (i) of the effectiveness of the Registration
Statement and any amendment thereto, (ii) of the issuance by the Commission
of
any stop order or of the initiation, or the threatening, of any proceeding
for
that purpose, (iii) of the issuance by any state securities commis-sion 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, the Preliminary Prospectus or the 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, the Preliminary Prospectus 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 commercially 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 or is no longer subject to the
reporting requirements of the Exchange Act, the Company, at its expense, shall
cause its regularly engaged independent certified public accountants to review
(but not audit) the Company’s financial statements for each of the first three
fiscal quarters prior to the announcement of quarterly financial information,
the filing of the Company’s Form 10-Q quarterly report and the mailing of
quarterly financial information to stockholders.
3.7 Affiliated
Transactions.
3.7.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which is
affiliated with any Initial Stockholder unless
the Company obtains an opinion from an independent investment banking firm
that
the Business Combination is fair to the Company’s stockholders from a financial
perspective.
3.7.2 Intentionally
Omitted.
3.7.3 Compensation.
Except
for payments made pursuant to the Office Services Agreement and the repayment
of
the Insider Loan, the Company shall not pay any Initial Stockholder or any
of
their affiliates any fees or compensation, prior to, or in connection with,
the
consummation of a Business Combination; provided further 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
commercially reasonable 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
Representative to obtain a secondary market trading exemption in such other
states as may be requested by the Representative.
12
3.9 Intentionally
Omitted.
3.10 Intentionally
Omitted.
3.11 Reports
to the Representative.
3.11.1 Periodic
Reports, Etc.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated or is no longer subject to the
reporting requirements of the Exchange Act, the Company will furnish to the
Representative (Attn: ▇▇▇▇▇ ▇. ▇▇▇▇) and its counsel copies of such financial
statements and other periodic and special reports as the Company from time
to
time furnishes generally to holders of any class of its securities, and promptly
furnish to the Representative (i) a copy of each periodic report the Company
shall be required to file with the Commission, (ii) a copy of every press
release and every news item and article with respect to the Company or its
affairs which was released by the Company, (iii) a copy of each Form 8-K
or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company,
(iv)
five copies of each registration statement filed by the Company with the
Commission under the Securities Act and (v) such additional documents and
information with respect to the Company and the affairs of any future
subsidiaries of the Company as the Representative may from time to time
reasonably request.
3.11.2 Transfer
Sheets.
For a
period of five years following the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
a
transfer and warrant agent acceptable to the Representative (“Transfer Agent”)
and will furnish to the Underwriters at the Company’s sole cost and expense such
transfer sheets of the Company’s securities as the Representative may request,
including the daily and monthly consolidated transfer sheets of the Transfer
Agent and DTC. Continental Stock Transfer & Trust Company is acceptable to
the Underwriters.
3.11.3 Intentionally
Omitted.
3.11.4 Intentionally
Omitted.
3.12 Disqualification
of Form S-1.
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-1 (or other
appropriate form) for the registration of the Warrants and the Representative’s
Warrants under the Act.
3.13 Payment
of Expenses.
3.13.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at Closing Date, all 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 Prospectus and the Prospectus and the
printing and mailing of this Agreement and related documents, including the
cost
of all copies thereof and any amendments thereof or supplements thereto supplied
to the Underwriters in quantities as may be required by the Underwriters, (ii)
the printing, engraving, issuance and delivery of the Units, the shares of
Common Stock and the Warrants included in the Units and the Representative’s
Purchase Option, including any transfer or other taxes payable thereon, (iii)
if
necessary, the qualification of the Public Securities under state or foreign
securities or Blue Sky laws, (iv) filing fees, costs and expenses
(including fees and disbursements of the Representative’s counsel) incurred in
registering the Offering with FINRA, (v) fees and disbursements of the transfer
and warrant agent, (vi) the Company’s expenses associated with “due diligence”
meetings arranged by the Representative and (vii) 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 Representative, it
will engage and pay up to $25,000 for an investigative search firm of the
Representative’s choice to conduct an investigation of the principals of the
Company as shall be mutually selected by the Representative and the Company.
The
Representative may deduct from the net proceeds of the Offering payable to
the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in this Agreement to be paid by the Company to the Representative
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 actually incurred out of pocket expenses, including, without
limitation, its legal fees and disbursements (up to a maximum of $75,000).
13
3.13.2 Intentionally
Omitted.
3.13.3 Deferred
Compensation.
Upon
the consummation of a Business Combination, the Company shall pay the
Underwriters discounts and commissions of $0.24 per Unit sold in the Offering.
These payments shall be made by wire transfer to an account designated by the
Representative on the closing date of the 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.
3.16 Notice
to FINRA.
For a
period of ninety days following the Effective Date, in the event any person
or
entity (regardless of any FINRA affiliation or association) is engaged to assist
the Company in its search for a merger candidate or to provide any other merger
and acquisition services, the Company will provide the following to FINRA and
Ladenburg prior to the consummation of the Business Combination:
(i) complete details of all services and copies of agreements governing
such services (which details or agreements may be appropriately redacted to
account for privilege or confidentiality concerns); 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
FINRA’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 Ladenburg) 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.
14
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 or is no longer subject
to
the reporting requirements of the Exchange Act, the Company shall retain ▇▇▇▇▇▇
or another independent public accountant.
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 FINRA.
The
Company shall advise FINRA if it is aware that any 5% or greater stockholder
of
the Company becomes an affiliate or associated person of an FINRA member
participating in the distribution of the Company’s Public
Securities.
3.22 Intentionally
Omitted.
3.23 Investment
Company.
The
Company shall cause a portion of the proceeds of the Offering to be deposited
and held in the Trust Fund, to be invested only 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 Intentionally
Omitted.
3.25 Intentionally
Omitted.
3.26 Insider
Warrants.
3.26.1 Insider
Warrant Purchase Price.
Simultaneously with the consummation of the Offering, the purchase price for
the
Insider Warrants shall be deposited in the Trust Fund.
3.26.2 Insider
Warrant Exercises and Redemption.
The
Company hereby acknowledges and agrees that the Insider Warrants will not be
redeemable by the Company and may be exercised by the Insider Purchasers or
their permitted transferees by
surrendering the Insider Warrants 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 Insider Warrants, multiplied by the
difference between the Warrant Price and the “Fair Market Value” (defined below)
by (y) the Fair Market Value, in each so
long
as they are held by the Insider Purchasers or their permitted
transferees.
The
“Fair Market Value” shall mean the average reported last sale price of the
Common Stock for the five trading days ending on the third business day prior
to
the date on which the notice of redemption is sent to holders of the
Warrants.
3.27 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.
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:
15
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending by the Commission and any request on the
part of the Commission for additional information shall have been complied
with
to the reasonable satisfaction of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, counsel for the Underwriters
(“GM”).
4.1.2 FINRA
Clearance.
By the
Effective Date, the Representative shall have received clearance from FINRA
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 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 Representative shall have received the favor-able opinion
of
Blank Rome LLP (“BR”), dated the Effective Date, addressed to the Representative
and in form and substance reasonably satisfactory to GM 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 merely 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, to such
counsel’s knowledge, based solely on a review of the Company’s stock ledger,
outstanding capital stock of the Company is as set forth in the
Prospectus.
(iii) The
Securities and Insider 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 merely by reason
of being such holders. The Securities and Insider 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 Representative’s Purchase Option, the
Representative’s Warrants, the Insider 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 Representative’s Purchase Option, Representative’s
Warrants, Insider Warrants and Warrants, when issued, in each case, are
enforceable against the Company in accordance with their respective terms,
subject to (a) bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (b) general equitable principles, regardless of
whether such principles are considered in a proceeding at law or in equity,
(c)
limitations on the enforceability of any indemni-fication or contribution
provisions under the federal and state securities laws and public policy, and
(d) limitations on the availability of the remedy of specific performance and
injunctive and other forms of equitable relief, which 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.
16
(iv) This
Agreement, the Warrant Agreement, the Representative’s Purchase Option, the
Office Services Agreement, the Trust Agreement, the Private Placement Purchase
Agreement, the Escrow Agreement and the Registration Rights Agreement have
each
been duly and validly authorized, executed and delivered by the Company and
consti-tute valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, subject to (a)
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (b) general equitable principles, regardless of whether such
principles are considered in a proceeding at law or in equity, (c) limitations
on the enforceability of any indemnification or contribution provisions under
the federal and state securities laws and public policy, and (d) limitations
on
the availability of the remedy of specific performance and injunctive and other
forms of equitable relief, which 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 Representative’s Purchase Option, the Escrow Agreement, the Trust Agreement,
the Private Placement Purchase Agreement, the Office 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) Each
of
the Registration Statement, at the Effective Date, the Preliminary Prospectus,
as of the Applicable Time and the Prospectus as of the date it was filed with
the Commission and as of the Closing Date and Option Closing Date and any
post-effective amendments or supplements thereto (other than the financial
statements included therein, as to which no opinion need be rendered) complies
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, the Preliminary Prospectus and the Prospectus.
The
descriptions in the Registration Statement, the Preliminary Prospectus 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 such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Preliminary Prospectus and the
Prospectus that are not described in the Registration Statement, the Preliminary
Prospectus and the Prospectus or included as exhibits to the Registration
Statement that are not described or included as required.
(vii) The
Registration Statement has become 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
insti-tuted or are pending or threatened under the Act or applicable state
securities laws.
17
(viii) To
such
counsel’s knowledge, there is no action, suit or proceeding before or by any
court or 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 Registra-tion Statement, the
Preliminary Prospectus 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, the Preliminary Prospectus
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 Effective Time, contained an untrue
statement of a material fact or omitted to state a material fact necessary
to
make the statements therein not misleading or that the Preliminary
Prospectus,
as of
the Applicable Time, and
the
Prospectus (or any amendment thereto), as of the date it was
filed
by the Company with the Commission
and as
of the Closing Date and the Option Closing Date, 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,
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
information and statistical data and information included in the Registration
Statement, Preliminary Prospectus 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 Representative
shall have received the favorable opin-ion of BR, dated the Closing Date or
the
Option Closing Date, as the case may be, addressed to the Representative and
in
form and substance reasonably satisfactory to GM, confirming as of the Closing
Date and, if applicable, the Option Closing Date, the statements made by BR
in
its opinion delivered on the Effective Date.
4.2.3 Reliance.
In
rendering such opinion, such counsel may rely (i) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to GM) of other counsel reasonably
acceptable to GM, 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
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to GM from ▇▇▇▇▇▇ dated, respectively, as of
the
date of this Agreement and as of the Closing Date and the Option Closing Date,
if any:
(i) Confirming
that they are an independent registered public accounting firm 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;
18
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement, the Preliminary Prospectus and the 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 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, they have been advised by the
Company officials that (a) the unaudited financial statements of the Company
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations or are 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, the Preliminary Prospectus
and
the Prospectus and (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 no
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 October 30, 2007 balance sheet included in the Registration Statement,
the Preliminary Prospectus and the Prospectus other than as set forth in or
contemplated by the Registration Statement, the Preliminary Prospectus an the
Prospectus or, if there was any decrease, setting forth the amount of such
decrease;
(iv) 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 Registration Statement, the Preliminary
Prospectus and 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;
(v) Stating
that they have not provided the Company’s management with any written
communication in accordance with Statement on Auditing Standards No. 60
“Communication of Internal Control Structure Related Matters Noted in an Audit”;
and
(vi) Statements
as to such other matters incident to the transaction contemplated hereby as
you
may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the President and the Secretary or Assistant Secretary of the Company
(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 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 Representative will have received
such other and further certificates of officers (in their capacities as such)
of
the Company as the Representative may reasonably request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or
Assistant Secretary of the Company, dated the Closing Date or the Option Closing
Date, as the case may be, respectively, certifying (i) that the Bylaws and
the
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.
19
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
material adverse change in the condition or the business activities, financial
or otherwise, of the Company from the latest dates as of which such condition
is
set forth in the Registration Statement and the 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 admin-istrative 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, the Preliminary Prospectus
and the 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, the Preliminary Prospectus
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, the Preliminary Prospectus 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.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreement,
the
Office Services Agreement, the Private Placement Purchase Agreement and all
of
the Insider Letters. On the Closing Date, the Company shall have delivered
to
the Representative executed copies of the Representative’s Purchase
Option.
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 GM 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.
4.8 Intentionally
Omitted.
4.9 Insider
Warrants.
On the
Closing Date, the Insider Purchaser shall have purchased the Insider Warrants
and the purchase price for such Insider Warrants shall be deposited into the
Trust Fund.
5 Indemnification.
5.1 Indemnification
of Underwriters.
20
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 supple-mented); (ii) in any
post-effective amendment or amendments or any new registration statement and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Representative’s Purchase Option; or (iii) any application
or other document or written communication (in this Section 5 collectively
called “application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Securities
under the securities laws thereof or filed with the Commission, any state
securities commission or agency, Nasdaq, Amex or any other 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 the Prospectus, or any amendment or supplement thereof, or in
any
application, as the case may be. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Preliminary
Prospectus, the indemnity agreement contained in this paragraph shall not inure
to the benefit of any Underwriter to the extent that any loss, liability, claim,
damage or expense of such Underwriter results from the fact that a copy of
the
Prospectus was not given or sent to the person asserting any such loss,
liability, claim or damage at or prior to the written confirmation of sale
of
the Securities to such person as required by the Act and the Regulations, and
if
the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the
Company with its obligations under Section 3.4 hereof. The Company agrees
promptly to notify the Representative of the commencement of any litigation
or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale of the Securities or in connection
with the Registration Statement or the 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.
21
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 the Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement or the 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 indem-nification 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. Notwith-standing 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, lia-bilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Underwriters or the Company, as
applicable.
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing party”), notify the contributing party of
the commencement thereof, but the omission to so notify the contributing party
will not relieve it from any liability which it may have to any other party
other than for contribution hereunder. In case any such action, suit or
proceeding is brought against any party, and such party notifies a contributing
party or its representative of the commencement thereof within the aforesaid
fifteen days, the contributing party will be entitled to participate therein
with the notifying party and any other contributing party similarly notified.
Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party 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.
22
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 arranges 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 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 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 Intentionally
Omitted.
8 Additional
Covenants.
8.1 Intentionally
Omitted.
8.2 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.
23
8.3 Trust
Fund Waiver Acknowledgment.
(a) Underwriters/Representative.
Except
with respect to the underwriting discounts and commissions due to the
Underwriters only upon successful consummation of a Business Combination, each
of the Underwriters and the Representative hereby agrees that it does not have
any right, title, interest or claim of any kind in or to any monies in the
Trust
Fund (“Claim”) and 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 it uses
commercially reasonable efforts to cause 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
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 8.8), (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.
8.4 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
Ladenburg.
8.5 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
Ladenburg.
8.6 Blue
Sky Requirements.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
8.7 Intentionally
Omitted.
8.8 Acquisition/Liquidation
Procedure.
The
Company agrees: (i) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company's stockholders for their approval
(“Business Combination Vote”) even if the nature of the acquisition is such as
would not ordinarily require stockholder approval under applicable state law;
and (ii) that, in the event that the Company does not effect a Business
Combination within 24 months from the Effective Date, the Company will be
liquidated and will distribute to all holders of IPO Shares (defined below)
an
aggregate sum equal to the Company’s “Liquidation Value.” The Company’s
“Liquidation Value” shall mean the Company’s book value, as determined by the
Company and approved by ▇▇▇▇▇▇. 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 a majority of the holders of
IPO
Shares present and entitled to vote on the Business Combination vote in favor
of
such Business Combination and holders of less than 30% 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 30% 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. The provisions
of this Section 8.8 may not be modified, amended or deleted under any
circumstances.
24
8.9 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 3a51-1 under the Exchange Act during such
period.
8.10 Affiliated
Transactions.
The
Company shall cause each of the Initial Stockholders to agree that, in order
to
minimize potential conflicts of inter-est 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.
8.11 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, 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 and reasonably acceptable to Ladenburg
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.
25
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 repre-sentations,
warranties and agreements at the Closing Date and such representations,
warranties and agreements of the Underwriters and the Company, including the
indemnity agreements contained in Section 5 hereof, shall remain operative
and
in full force and effect regard-less of any investigation made by or on behalf
of any Underwriter, the Company or any controlling person, and shall survive
termina-tion 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 domes-tic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the Boston
Stock Exchange or on FINRA 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 FINRA
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
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether
or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of the
Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof of
such material adverse change in the conditions or prospects of the Company,
or
such material adverse change in general market conditions, including without
limitation as a result of terrorist activities after the date hereof, as in
the
Representative’s judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by
the
Underwriters for the sale of the 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 termina-tion of this Agreement, and whether or not this
Agreement is other-wise carried out, the provisions of Section 5 shall not
be in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
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
26
If
to the
Representative:
Ladenburg
▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇.
▇▇▇▇
Copy
to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
The
Chrysler Building
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, Esq.
If
to the
Company:
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
Copy
to:
Blank
Rome LLP
The
Chrysler Building
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
11.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
11.3 Amendment.
Except
for Section 8.8 (which may not be amended under any circumstances), 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
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or
be construed to have any legal or equitable right, remedy or claim under or
in
respect of or by virtue of this Agreement or any provisions herein
contained.
11.6 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accor-dance 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 11.1 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 pre-vailing party(ies) in
any
such action shall be entitled to recover from the other party(ies) all of its
reasonable attor-neys’ fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
27
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
one
and the same agreement, and shall become effective when one or more counterparts
have 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 effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
11.9 No
Fiduciary Duty.
The
Company acknowledges and agrees that neither the Representative, 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.
28
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,
|
||
| |
|
|
| By: | ||
|
Name:
Title:
|
||
Accepted
on the date first
above
written.
LADENBURG
▇▇▇▇▇▇▇▇ & CO. INC.
By:
Name:
Title:
29
SCHEDULE
I
7,500,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
Ladenburg
▇▇▇▇▇▇▇▇ & Co. Inc.
|
||
|
7,500,000
|