APEX BIOVENTURES ACQUISITION CORPORATION 9,375,000 Units UNDERWRITING AGREEMENT
9,375,000
Units
__________,
2006
CRT
Capital Group LLC
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Ladies
and Gentlemen:
The
undersigned, Apex Bioventures Acquisition Corporation, a Delaware corporation
(“Company”),
hereby confirms its agreement with CRT Capital Group LLC (being referred to
herein variously as “you,”
“CRT”
or
the
“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
to
the Underwriter, and the Underwriter, upon the basis of the representations
and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Company, an aggregate of 9,375,000 units
(“Firm
Units”)
of the
Company, at a purchase price (net of all discounts and commissions other than
the Deferred Compensation (as defined in Section 1.1.3 hereof)) of (A) $7.60
per
Firm Unit (the “Initial
Purchase Price”)
less
(B) the Deferred Compensation, if any. As adjusted for the payment, if any,
to
the Underwriter of the Deferred Compensation, the purchase price will be $7.44
per Firm Unit. The Firm Units are to be offered initially to the public (the
“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 (the “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 the earlier to occur of the expiration or
termination of the Underwriter’s option to purchase up to 1,406,250 additional
units to cover over-allotments or the exercise in full by the Underwriter of
such option (the “Separation
Date”),
but
in no event will the Underwriter allow separate trading before an audited
balance sheet has been prepared reflecting receipt by the Company of the gross
proceeds of the Offering and filed with the Securities and Exchange Commission
(the “Commission”)
with a
Current Report on Form 8-K. Each Warrant entitles its holder to exercise the
Warrant 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 (“Effective
Date”)
of the
Registration Statement (as defined in Section 2.1.1 hereof) and terminating
on
the four-year anniversary of the Effective Date. “Business
Combination”
shall
mean the acquisition by the Company, whether by merger, capital stock exchange,
asset acquisition, stock purchase or other similar business combination of
the
foregoing, of one or more domestic or foreign companies operating in the
healthcare industry (as described more fully in the Registration
Statement).
1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 1:00 P.M., New York
time, on the third business day following the date of this Agreement (or the
fourth business day following the date of this Agreement, if this Agreement
is
executed after 4:30 p.m.) or at such earlier time as shall be agreed upon by
the
Underwriter and the Company at the offices of the Underwriter or at such other
place as shall be agreed upon by the Underwriter and the Company. The hour
and
date of delivery and payment for the Firm Units are called the “Closing
Date.”
Payment for the Firm Units shall be made by the Underwriter on the Closing
Date
by wire transfer in immediately available Federal funds of $71,250,000,
representing the aggregate purchase price for the Firm Units based on the
Initial Purchase Price, payable as follows: $70,000,000 of the proceeds received
by the Company for the Firm Units shall be deposited in the trust account
(“Trust
Account”)
established by the Company for the benefit of the public stockholders as
described in the Registration Statement ($1,500,000 of which is deposited in
respect of the Deferred Compensation (as defined below)) and $1,250,000, less
the amount owed by the Company to the Underwriter for all accountable expenses
owed thereto incident to the performance of the obligations of the Company
under
this Agreement as set forth in Section 3.8 hereof, shall be paid to the order
of
the Company to a bank account established by the Company, against delivery
to
you of certificates (in form and substance satisfactory to the Underwriter)
representing the Firm Units (or through the facilities of the Depository Trust
Company (“DTC”))
for
the account of the Underwriter. The Firm Units shall be registered in such
name
or names and in such authorized denominations as the Underwriter may request
in
writing at least two full business days prior to the Closing Date. The Company
will permit the Underwriter 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 Underwriter for all the Firm Units.
1.1.3 Deferred
Compensation.
Upon
the consummation of the Company’s initial Business Combination, the Company will
pay to the Underwriter the deferred compensation deposited by the Underwriter
into the Trust Account, including any deferred compensation deposited in respect
of Option Units (as defined below) (the “Deferred Compensation”), in an amount
equal to 2.0% of the gross proceeds (before giving effect to any discounts
or
commissions) from the sale of the Units (as defined in Section 1.2.1 hereof),
or
$0.16 per Unit. Payment of the Deferred Compensation will be made out of the
proceeds of this Offering held in the Trust Account at the consummation of
the
Business Combination. If the Company fails to consummate a Business Combination
within the required time period set forth in the Prospectus, the Deferred
Compensation will not be paid to the Underwriter, and any proceeds held in
the
Trust Account that would have been paid to the Underwriter in respect of the
Deferred Compensation and any interest earned thereon will, instead, be included
in the distribution of the proceeds held in the Trust Account made to the
holders of the IPO Shares upon the Company’s dissolution.
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 Underwriter is hereby granted an option to purchase
up to an additional 1,406,250 units
from the Company (“Over-allotment
Option”).
Such
additional 1,406,250 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 Underwriter 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 Underwriter 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 giving written notice to the Company by the Underwriter, which
notice may be delivered by email, electronic facsimile transmission, postal
mail
or overnight courier, 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 Underwriter,
at
the offices of the Underwriter or at such other place as shall be agreed upon
by
the Company and the Underwriter . Upon exercise of the Over-allotment Option,
the Company will become obligated to convey to the Underwriter, and, subject
to
the terms and conditions set forth herein, the Underwriter will become obligated
to purchase, the number of Option Units specified in such notice.
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1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Underwriter’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
to the Trust Account at the offices of the Underwriter or at such other place
as
shall be agreed upon by the Underwriter and the Company upon delivery to you
of
certificates representing such securities (or through the facilities of DTC).
The certificates representing the Option Units to be delivered will be in such
denominations and registered in such names as the Underwriter requests not
less
than two full business days prior to the Closing Date or the Option Closing
Date, as the case may be, and will be made available to the Underwriter for
inspection, checking and packaging at the aforesaid office of the Company’s
transfer agent or correspondent not less than one full business day prior to
such Closing Date.
1.2.4 Termination
of Option.
If the
Underwriter provides notice in writing to the Company that the Underwriter
is
terminating the Over-Allotment Option prior to the lapse of the 45-day option
period, then the Over-Allotment Option shall immediately terminate and the
Company shall have no further obligation to convey to the Underwriter any Option
Units for which the Underwriter has not yet given notice of exercise. Such
notice may delivered by email or electronic facsimile transmission, and shall
be
deemed effective when sent.
1.3 Underwriter’s
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Underwriter (and/or its
designees) on the Effective Date, for an aggregate purchase price of $100,
an
option (“Underwriter’s
Purchase Option”)
for
the purchase of up to an aggregate of 562,500 units (“Underwriter’s
Units”).
Each
of the Underwriter’s Units is identical to the Firm Units. The Underwriter’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 Underwriter’s Unit of $10.00. The Company
may call the Underwriter’s Purchase Option for redemption, for $100, if the
volume weighted average price of Common Stock equals or exceeds $11.50 per
share
for any 20 trading days within any 30 trading day period ending three business
days before the Company sends notice of redemption. The Underwriter’s Purchase
Option, the Underwriter’s Units, the warrants included in the Underwriter’s
Units (“Underwriter’s
Warrants”),
the
Common Stock included in the Underwriter’s Units and the shares of Common Stock
issuable upon exercise of the Underwriter’s Warrants are hereinafter referred to
collectively as the “Underwriter’s
Securities.”
The
Public Securities and the Underwriter’s Securities are hereinafter referred to
collectively as the “Securities.”
1.3.2 180-day
Lock-Up.
The
Underwriter’s Securities have been deemed compensation by the NASD and are
therefore subject to a 180-day lock-up pursuant to Rule 2710(g)(1) of the
National Association of Securities Dealers, Inc. (“NASD”)
Conduct Rules, pursuant to which the Underwriter’s Purchase Option may not be
sold, transferred, assigned, pledged or hypothecated for 180 days following
the
Effective Date, except to the Underwriter participating in the offering and
their bona fide officers or partners.
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1.3.3 Payment
and Delivery.
Delivery and payment for the Underwriter’s Purchase Option shall be made on the
Closing Date. The Company shall deliver to the Underwriter, upon payment
therefor, certificates for the Underwriter’s Purchase Option in the name or
names and in such authorized denominations as the Underwriter may
request.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriter as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has prepared and filed with the Commission a registration statement
and
an amendment or amendments thereto on Form S-1 (File No. 333-135755), including
a related preliminary prospectus (any such preliminary prospectus in the form
first filed with the Commission, a “Preliminary
Prospectus”
and
the
Preliminary Prospectus dated __________, 2006 included in the registration
statement first filed with the Commission on __________, 2006, in the form
distributed to potential investors in the Offering, the “Statutory
Prospectus”),
for
registration under the Act of the offering and sale of the Securities, 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 (“Rules”)
of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time
the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to paragraph (b) of Rule 430A of the Rules), is hereinafter
called the “Registration
Statement.”
Such
Registration Statement has become effective as of the Effective Date. The
Company will file with the Commission a final prospectus in accordance with
Rule
424(b); such final prospectus in the form first filed with the Commission is
hereinafter called the “Prospectus.”
As
filed, the Prospectus shall contain all information required by the Act and
the
Rules thereunder and, except to the extent the Underwriter shall agree in
writing to a modification, shall be in all substantive respects in the form
of
the Preliminary Prospectus included in the Registration Statement immediately
prior to the Effective Date.
2.1.2 Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number ______ ) providing
for the registration under the Exchange Act of the Securities. The registration
of the Securities under the Exchange Act is effective under the Rules 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 effectiveness of the Registration Statement or the use of any Preliminary
Prospectus, the Prospectus or any part thereof, or has instituted or, to the
Company’s knowledge, threatened to institute any proceedings with respect to
such an order.
2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
On the
Effective Date, the Registration Statement did, and when the Prospectus is
first
filed in accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any date on which Option Units are purchased, if such date is
not
the Closing Date (an “Option Closing Date”), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable requirements
of the Act and the Rules; on the Effective Date and at the Closing Date and
each
Option Closing Date, if any, the Registration Statement did not and will not
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and each Option Closing Date, if any,
the Prospectus (together with any supplement thereto) will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under
which they were made, not misleading. At the Applicable Time, the Statutory
Prospectus did, and on the Closing Date will, comply in all material respects
with the applicable requirements of the Act and the Rules; at the Applicable
Time, the Statutory Prospectus did not, and at the Closing Date will not,
include any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Nothing has come to the attention
of
the Company that has caused the Company to believe that the market-related
data
included in the Statutory Prospectus and the Prospectus is not based on or
derived from sources that are reliable and accurate (in accordance with the
methodologies used to derive such market-related data set forth in the
underlying source material) in all material respects.
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2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Statutory 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 Statutory
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.
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company since the formation of the Company, except
as disclosed in the Statutory Prospectus and the Prospectus.
2.3.4 Rules.
The
disclosures in the Statutory 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 necessary in order to make the statements therein, in
light of the circumstances in which they were made, not misleading.
2.4 Changes
After Dates in Registration Statement.
2.4.1 No
Material Adverse Change.
Since
the respective dates as of which information is given in the Statutory
Prospectus (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
Statutory Prospectus, and except as may otherwise be indicated or contemplated
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 Registration Statement, are independent accountants as required by the
Act and the Rules. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP has not, during the periods
covered by the financial statements included in the Statutory Prospectus and
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 Statutory Prospectus and the Prospectus, fairly present the
financial position, the results of operations and the cash flows of the Company
at the dates and for the periods to which they apply; and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles (“GAAP”),
consistently applied throughout the periods involved. The Statutory 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.
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2.7 Authorized
Capital; Options; Etc.
The
Company had at the date or dates indicated in the Statutory Prospectus and
the
Prospectus duly authorized, issued and outstanding capital stock as set forth
in
the Statutory Prospectus and the Prospectus. Based on the assumptions stated
in
the Statutory Prospectus and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein. The Company’s
authorized Common Stock conforms to all statements relating thereto contained
in
the Statutory Prospectus and the Prospectus. Except as set forth in, or
contemplated by, the Statutory 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.
2.8 Valid
Issuance of Securities; Etc.
2.8.1 Existing
Stockholders Shares.
The
shares of Common Stock issued to the Existing Stockholders (as defined below)
on
and outstanding as of _________, 2006, and any shares issued in any stock
dividend thereon, 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 shares of Common Stock were issued in violation
of the preemptive rights of any holders of any security of the Company or
similar contractual rights granted by the Company. The offers and sales of
the
outstanding Common Stock were at all relevant times either registered under
the
Act and the applicable state securities or Blue Sky laws or were exempt from
such registration requirements.
2.8.2 Securities
Sold Pursuant to the Placement Warrant Purchase Agreement.
(i) The
warrants sold pursuant to the Placement Warrant Purchase Agreement (as defined
below) (the “Placement
Warrants”)
were
duly executed, authenticated, issued and delivered, and constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except (i) as such enforceability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(ii) The
shares of Common Stock issuable upon exercise of the Placement Warrants have
been duly authorized and, when executed by the Company and countersigned and
issued and delivered against payment therefor pursuant to the Placement Warrants
and the Warrant Agreement, will be validly issued, fully paid and
non-assessable. The holders of such Common Stock will not be subject to personal
liability by reason of being such holders; such Common Stock will not be subject
to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance
and sale of such Common Stock (other than such execution, countersignature
and
delivery at the time of issuance) has been duly and validly taken.
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2.8.3 The
Placement Warrants and the shares of Common Stock underlying the Placement
Warrants conform in all material respects to all statements with respect thereto
contained in the Statutory Prospectus and the Prospectus. The certificates
for
such securities are in due and proper form. The offers and sales of the
Placement Warrants were at all relevant times either registered under the Act
and the applicable state securities or Blue Sky laws or were exempt from such
registration requirements.
2.8.4 Securities
Sold Pursuant to this Agreement.
(i) The
shares of Common Stock included in the Units and the Underwriter’s Units have
been duly authorized and, when executed by the Company and countersigned, and
issued and delivered against payment therefor by the Underwriter pursuant to
this Agreement or the Underwriter’s Purchase Option, as the case may be, will be
validly issued, fully paid and non-assessable.
(ii) The
Warrants included in the Units and the Underwriter’s Warrants, when executed,
authenticated, issued and delivered in the manner set forth in the Warrant
Agreement against payment therefor by the Underwriter pursuant to this Agreement
or the Underwriter’s Purchase Option, as the case may be, will be duly executed,
authenticated, issued and delivered, and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(iii) The
shares of Common Stock issuable upon exercise of the Warrants included in the
Units and the Underwriter’s Warrants have been duly authorized and, when
executed by the Company and countersigned and issued and delivered against
payment therefor pursuant to the Warrants or the Underwriter’s Warrants, as the
case may be, and the Warrant Agreement, will be validly issued, fully paid
and
non-assessable. The holders of such Common Stock will not be subject to personal
liability by reason of being such holders; such Common Stock will not be subject
to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance
and sale of such Common Stock (other than such execution, countersignature
and
delivery at the time of issuance) will have been duly and validly
taken.
(iv) When
issued, the Underwriter’s Purchase Option will constitute a valid and binding
obligation of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise price therefor, the number and type of securities
of
the Company called for thereby in accordance with the terms thereof, and such
Underwriter’s Purchase Option is enforceable against the Company in accordance
with its respective terms, except (i) as such enforceability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
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(v) The
Securities conform in all material respects to all statements with respect
thereto contained in the Statutory Prospectus and the Prospectus. The
certificates for the Securities are in due and proper form.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Statutory Prospectus and the Prospectus, no holders of
any
securities of the Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company.
2.10 Validity
and Binding Effect of Agreements.
2.10.1 Underwriting
Agreement.
This
Agreement has been
duly
and validly executed by the Company
and
constitutes the valid and binding agreement of the Company.
2.10.2 Warrant
Agreement.
The
Warrant Agreement with Continental Stock Transfer & Trust Company, as
warrant agent, substantially in the form filed as Exhibit 4.4 to the
Registration Statement (the “Warrant
Agreement”),
has
been duly and validly executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally (including without limitation all laws
relating to fraudulent transfers), (ii) the effect of general principles of
equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in a proceeding
in
equity or at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.10.3 Trust
Agreement.
The
Investment Management Trust Agreement with Continental Stock Transfer &
Trust Company, as trustee, substantially in the form filed as Exhibit 10.9
to
the Registration Statement (the “Trust
Agreement”),
has
been duly and validly executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers), (ii) the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith
and fair dealing (regardless of whether considered in a proceeding in equity
or
at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.10.4 Escrow
Agreement.
The
Stock Escrow Agreement with Continental Stock Transfer & Trust Company, as
escrow agent, substantially in the form filed as Exhibit 10.10 to the
Registration Statement (the “Escrow
Agreement”),
has
been duly and validly executed by the Company
and
constitutes the valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally (including without limitation all laws
relating to fraudulent transfers), (ii) the effect of general principles of
equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in a proceeding
in
equity or at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
8
2.10.5 Insider
Letters.
Each of
those certain letter agreements, substantially in the forms filed as Exhibits
10.1 through 10.8 to the Registration Statement (“Insider Letters”), have been
duly and validly executed by the Company and constitute valid and binding
agreements of the Company, enforceable in accordance with its terms, subject
to
(i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally (including
without limitation all laws relating to fraudulent transfers), (ii) the
effect of general principles of equity, including without limitation concepts
of
materiality, reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law), (iii) the limitations on
the enforceability of any rights to indemnity and contribution by federal and
state securities laws and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.10.6 Underwriter’s
Purchase Option.
The
Underwriter’s Purchase Option has
been
duly and validly executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers), (ii) the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith
and fair dealing (regardless of whether considered in a proceeding in equity
or
at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.10.7 Dividend
Share Repurchase Agreement.
The
Dividend Share Repurchase Agreement, substantially in the form filed as Exhibit
___ to the Registration Statement, pursuant to which the Company is granted
the
right to repurchase from the Existing Stockholders certain shares of Common
Stock issued as a dividend (“Dividend
Shares”)
in an
amount sufficient to cause the Existing Stockholders to own 20% of the Company’s
outstanding stock following the expiration of the Over-Allotment Option, has
been duly and validly executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, and subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers), (ii) the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith
and fair dealing (regardless of whether considered in a proceeding in equity
or
at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.10.8 Registration
Rights Agreement.
The
Registration Rights Agreement with the Existing Stockholders, substantially
in
the form filed as Exhibit 10.15 to the Registration Statement, has been duly
and
validly executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers), (ii) the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith
and fair dealing (regardless of whether considered in a proceeding in equity
or
at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
9
2.10.9 Services
Agreement.
The
Services Agreement with Apex Bioventures, LLC, substantially in the form filed
as Exhibit 10.11 to the Registration Statement, has been duly and validly
executed by the Company and
constitutes the valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally (including without limitation all laws relating to
fraudulent transfers), (ii) the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith
and fair dealing (regardless of whether considered in a proceeding in equity
or
at law), (iii) the limitations on the enforceability
of any rights to indemnity and contribution by federal and state securities
laws
and principles of public policy and (iv) possible
judicial action giving effect to governmental actions or foreign laws affecting
creditors’ rights.
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Underwriter’s Purchase Option, the Trust Agreement, the
Insider Letters, the Placement Warrant Purchase Agreement, the Services
Agreement, the Dividend Share Repurchase Agreement, the Registration Rights
Agreement and the Stock 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; (ii) result in any violation of the provisions
of the Amended and Restated Certificate of Incorporation or the Bylaws of the
Company; or (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
business.
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 Amended
and Restated 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; Ownership.
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 and to consummate a Business Combination
as
described in the Statutory Prospectus and the Prospectus. The disclosures in
the
Statutory 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 consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Underwriter’s Purchase Option, the Trust Agreement, the Insider Letters, the
Placement Warrant Purchase Agreement, the Services Agreement, the Dividend
Share
Repurchase Agreement, the Registration Rights Agreement and the Stock Escrow
Agreement,, and as contemplated by the Statutory Prospectus and the Prospectus,
except with respect to applicable federal and state securities laws.
10
2.13.3 Ownership.
Except
as set forth in the Statutory Prospectus and the Prospectus, the Company owns
or
has valid leasehold interests in all material properties and assets required
for
the operation of its business as now conducted, including those described in
the
Statutory Prospectus and the Prospectus as being owned by it.
2.14 D&O
Questionnaires.
To the
best of the Company’s knowledge, all information contained in the director and
officer questionnaires and NASD supplemental questionnaires (“Questionnaires”)
completed by each of the Company’s stockholders prior to the Offering
(“Existing
Stockholders”)
and
provided to the Underwriter as an exhibit to his Insider Letter (as defined
in
Section __) is true and correct and the Company has not become aware of any
information which would cause the information disclosed in the questionnaires
completed by each Initial Stockholder to become inaccurate and
incorrect.
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge,
threatened against, or involving the Company or, to the best of the Company’s
knowledge, any Existing Stockholder, which has not been disclosed in the
Statutory Prospectus and the Prospectus, except for actions, suits, proceedings,
inquiries, arbitrations, investigations, litigation or government proceedings
pending against any Existing Stockholder that would not individually or in
the
aggregate have a material adverse effect on such Existing Stockholder, the
Company or the Offering.
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 Company.
2.17 Transactions
Affecting Disclosure to NASD.
2.17.1 Finder’s
Fees.
Except
as described in the Statutory Prospectus and the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the
payment of a finder’s, consulting or origination fee by the Company or any
Initial Stockholder with respect to the sale of the Securities hereunder or
any
other arrangements, agreements or understandings of the Company or, to the
best
of the Company’s knowledge, any Initial Stockholder that may affect the
Underwriter’s compensation, as determined by the NASD.
2.17.2 Payments
Within Twelve Months.
The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) (i) to any person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company, (ii) to
any
NASD member or (iii) to any person or entity that has any direct or indirect
affiliation or association with any NASD member, within the twelve months prior
to the Effective Date.
11
2.17.3 Use
of
Proceeds.
None of
the net proceeds of the Offering will be paid by the Company to any
participating NASD member or its affiliates, except as specifically authorized
herein and except as may be paid in connection with a Business Combination
as
contemplated by the Statutory Prospectus and the Prospectus.
2.17.4 Insiders’
NASD Affiliation.
Except
as set forth on Schedule
2.17.4,
no
officer, director or any beneficial owner of the Company’s unregistered
securities has any direct or indirect affiliation or association with any NASD
member.
2.18 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Prospectus or
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company’s internal
accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.
2.19 Covenants
Not to Compete.
No
Existing Stockholder, employee, officer or director of the Company is subject
to
any noncompetition agreement or non-solicitation agreement with any employer
or
prior employer which could materially affect his ability to be an Existing
Stockholder, employee, officer and/or director of the Company.
2.20 Investments.
The
Company is not and, after giving effect to the offering and sale of the
securities as contemplated hereunder and in the Statutory Prospectus and the
Prospectus, and the application of the net proceeds from such sale as described
in the Statutory Prospectus and the Prospectus, will not be an “investment
company” within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
thereunder.
2.21 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.22 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 Statutory Prospectus
and the Prospectus that have not been described as required.
2.23 Free
Writing Prospectus.
The
Company has not prepared or used any “free writing prospectus,” as such term is
defined under Rule 405.
2.24 Administrative
Services.
The
Company has entered into an agreement (the “Services
Agreement”)
with
Apex Bioventures, LLC, substantially in the form annexed as Exhibit 10.11 to
the
Registration Statement, pursuant to which the Affiliate will make available
to
the Company office space and administrative, technological and secretarial
support for the Company’s use for $7,500 per month.
12
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement.
The
Company will deliver to the Underwriter, prior to filing, any amendment or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Underwriter shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a Prospectus (or in lieu thereof a notice pursuant to Rule 173(a))
is required to be delivered under the Act, the Company will use all reasonable
efforts to comply with all requirements imposed upon it by the Act, the Rules
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 Statutory Prospectus and the Prospectus. If at any time when a Prospectus
(or in lieu thereof a notice pursuant to Rule 173(a)) 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 Underwriter, the Statutory Prospectus or the Prospectus, as
then
amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or the Prospectus to comply with the Act, the Company
will notify the Underwriter 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 Exchange
Act Registration.
Until
the earlier of five years from the Effective Date, the date that the Company
is
liquidated or the date that the Company is acquired by a third party, 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. The Company
will not deregister the Units, Common Stock or Warrants under the Exchange
Act
without the prior written consent of the Underwriter.
3.3 Blue
Sky Filings.
The
Company will endeavor in good faith, in cooperation with the Underwriter, 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 Underwriter may reasonably designate, provided that no
such
qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or to taxation as
a
foreign corporation doing business in such jurisdiction. Until the earliest
of
(i) five years from the Effective Date, (ii) the date on which the Public
Securities are listed or quoted, as the case may be, on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market (or any
successor to such entities) and (iii) the date of the liquidation of the Company
(the period from the Effective Date to such earliest date, the “Blue
Sky Compliance Period”),
in
each jurisdiction where such qualification shall be effected, the Company will,
unless the Underwriter agrees that such action is not at the time necessary
or
advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
3.4 Delivery
to Underwriter of Prospectuses.
The
Company will deliver to the Underwriter, without charge, from time to time
during the period when the Prospectus (or in lieu thereof a notice pursuant
to
Rule 173(a)) is required to be delivered under the Act or the Exchange Act,
such
number of copies of the Prospectus as the Underwriter may reasonably request
and, as soon as the Registration Statement or any amendment or supplement
thereto becomes effective, deliver to the Underwriter 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.
13
3.5 Effectiveness
and Events Requiring Notice to the Underwriter.
The
Company will use its best efforts to cause the Registration Statement to remain
effective until distribution of the Public Securities is complete and will
notify the Underwriter 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 when the Company becomes aware
of such, (iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Public Securities
for
offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose when the Company becomes aware of such,
(iv)
of the mailing and delivery to the Commission for filing of any amendment or
supplement to the Registration Statement or Prospectus, (v) of the receipt
of
any comments or request for any additional information from the Commission,
and
(vi) of the happening of any event during the period described in Section 3.4
hereof that, in the judgment of the Company, makes any statement of a material
fact made in the Statutory Prospectus, the Registration Statement, or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. If the Commission
or any state securities commission shall enter a stop order or suspend such
qualification during any such time, the Company will make every reasonable
effort to obtain promptly the lifting of such order.
3.6 Affiliated
Transactions.
3.6.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which is
affiliated with any Existing 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.
3.6.2 Compensation.
Except
as disclosed in the Statutory Prospectus and the Prospectus, the Company shall
not pay any Existing Stockholder or any of their affiliates any fees or
compensation from the Company, for services rendered to the Company prior to,
or
in connection with, the consummation of a Business Combination; provided that
the Existing Stockholders and their affiliates 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.
3.7 Secondary
Market Trading Survey.
Until
such time as the Public Securities are listed or quoted, as the case may be,
on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq Global
Select Market, Nasdaq Global Market or Nasdaq Capital Market (collectively
referred to below as “Nasdaq”),
the
Company shall engage ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriter
(“▇▇▇▇▇▇▇”)
to
deliver to the Underwriter on the Effective Date, and to update at the beginning
of each fiscal quarter, if requested by the Underwriter, a written report
detailing those states in which the Public Securities may be traded in
non-issuer transactions under the Blue Sky laws of the fifty States
(“Secondary
Market Trading Survey”).
14
3.8 Payment
of Expenses.
3.8.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and each Option Closing
Date, if any, to the extent not paid at the Closing Date, all expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to (i) the preparation (exclusive of the fees and
expenses of counsel to the Underwriter), printing, filing and mailing (including
the payment of postage with respect to such mailing) of the Registration
Statement, any 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
Underwriter in quantities as may be required by the Underwriter, (ii) the
printing, engraving, issuance and delivery of the Units, the shares of Common
Stock and the Warrants included in the Units and the Underwriter’s Purchase
Option, including any transfer or other taxes payable thereon, (iii) the
qualification of the Public Securities under state or foreign securities or
Blue
Sky laws, including the costs of preparing, printing and mailing the
“Preliminary Blue Sky Memorandum,” the “Final Blue Sky Memorandum” and all
amendments and supplements thereto, the preparation of the Secondary Market
Trading Survey (as defined above), and the reasonable fees and disbursements
of
▇▇▇▇▇▇▇ related thereto; provided
that the
Company shall not be required to reimburse the Underwriter or ▇▇▇▇▇▇▇ for any
amounts under this clause (iii)(b) in excess of $40,000, unless ▇▇▇▇▇▇▇ or
the
Underwriter have advanced filing fees with respect to the qualification of
the
Securities under state or foreign securities or Blue Sky laws, in which event
the limitations on reimbursement under this clause (iii)(b) shall not apply
to
such filing fees, (iv) filing fees, costs and expenses (excluding fees and
disbursements for the Underwriter’s counsel) incurred in registering the
Offering with the NASD and the Commission, (v) fees and disbursements of the
Transfer Agent, (vi) the Company’s expenses associated with “road show” meetings
arranged by the Underwriter (which, for the avoidance of doubt, shall not
include the expenses of the Underwriter’s personnel incurred in connection with
“road show” meetings), 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 3.8. The Underwriter
may
deduct from the net proceeds of the Offering payable to the Company on the
Closing Date, or on each Option Closing Date, if any, the expenses set forth
in
this Agreement to be paid by the Company to the Underwriter and
others.
3.9 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 Statutory Prospectus and the Prospectus.
3.10 Notice
to NASD.
In the
event any person or entity (excluding attorneys, accountants, engineers,
environmental or labor consultants, investigatory firms, technology consultants
and specialists and similar service providers that are not affiliated or
associated with the NASD and are not brokers or finders) is engaged, in writing,
to assist the issuer in finding or evaluating a Target Business, the Company
will provide the following to the NASD and the Underwriter prior to consummation
of the Business Combination: (i) copies of agreements governing said services;
and (ii) a justification as to why the person or entity providing the merger
and
acquisition services should not be considered an “underwriter or related person”
with respect to the Company’s initial public offering as such term is defined in
Rule 2710(a)(6) of the NASD 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.
3.11 Stabilization.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of the Underwriter) 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.
3.12 Internal
Controls.
During
the Blue Sky Compliance Period, 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.
15
3.13 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 gross 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.
3.14 NASD.
During
the period of the distribution of the Public Securities, the Company shall
advise the NASD if it is aware that any 5% or greater stockholder of the Company
becomes an affiliate or associated person of an NASD member participating in
the
distribution of the Company’s Public Securities.
3.15 Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust Account
to be invested only in money market funds or “government securities” as set
forth in the Trust Agreement and disclosed in the Statutory Prospectus and
the
Prospectus. The Company will otherwise conduct its business in a manner so
that
it will not become subject to the Investment Company Act. Furthermore, once
the
Company consummates a Business Combination, it will be engaged in a business
other than that of investing, reinvesting, owning, holding or trading
securities.
3.16 Colorado
Trust Filing.
In the
event the Securities are registered in the State of Colorado, the Company will
cause a Colorado Form ES to be filed with the Commissioner of the State of
Colorado no less than 10 days prior to the distribution of the Trust Account
in
connection with a Business Combination and will do all things necessary to
comply with Section ▇▇-▇▇-▇▇▇ and Rule 51-3.4 of the Colorado Securities
Act.
4. Conditions
of Underwriter’s Obligations.
The
obligations of the Underwriter to purchase and pay for the Firm Units on the
Closing Date and the Option Units, if any, on any Option Closing Date, are
subject to the condition that the representations and warranties of the Company
as of the date hereof and as of the Closing Date or Option Closing Date, as
the
case may be, are true and accurate in all material respects, and to the
condition that the Company has performed all of its covenants and obligations
hereunder theretofore to be performed, and to the following additional
conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending or contemplated by the Commission and any
request on the part of the Commission for additional information shall have
been
complied with to the reasonable satisfaction of ▇▇▇▇▇▇▇.
4.1.2 NASD
Clearance.
The
NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting or other arrangements of the transactions
contemplated hereby.
16
4.1.3 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by you
pursuant to Section 3.3 hereof shall have been issued on either on the Closing
Date or the Option Closing Date, and no proceedings for that purpose shall
have
been instituted or shall be contemplated.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel.
On the
Closing Date and on each Option Closing Date, if any, the Underwriter shall
have
received the favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
PC
(“Mintz
▇▇▇▇▇”),
counsel to the Company, dated as of the Closing Date or the Option Closing
Date,
as the case may be, addressed to the Underwriter and in form and substance
satisfactory to ▇▇▇▇▇▇▇ to the following effect:
(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 authorized to do business as a foreign corporation in the state of
California and such authority has not been surrendered, suspended or
annulled.
(ii) All
issued and outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; the holders
thereof are not subject to personal liability by reason of being such holders;
and none of such securities were issued in violation of the preemptive rights
of
any stockholder of the Company arising by operation of law or under the Amended
and Restated Certificate of Incorporation or Bylaws of the Company.
(iii) The
Placement Warrants have been duly executed, authenticated, issued and delivered,
and constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally, (ii) as enforceability of any
indemnification or contribution provision may be limited under the federal
and
state securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iv) The
shares of Common Stock issuable upon exercise of the Warrants included in the
Placement Warrants have been duly authorized and, when executed by the Company
and countersigned and issued and delivered against payment therefor pursuant
to
the Placement Warrants and the Warrant Agreement, will be validly issued, fully
paid and non-assessable. The holders of such Common Stock will not be subject
to
personal liability by reason of being such holders; such Common Stock will
not
be subject to any preemptive or other similar contractual rights granted by
the
Company; and all corporate action required to be taken for the authorization,
issuance and sale of such Common Stock (other than such execution,
countersignature and delivery at the time of issuance) has been duly and validly
taken.
(v) The
authorized and outstanding capital stock of the Company is as set forth in
the
Statutory Prospectus and the Prospectus; the offers and sales of the outstanding
Common Stock and the Placement Warrants were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky Laws
or
exempt from such registration requirements.
(vi) The
shares of Common Stock included in the Units and the Underwriter’s Units have
been duly authorized and, when executed by the Company and countersigned, and
issued and delivered against payment therefor by the Underwriter pursuant to
this Agreement or the Underwriter’s Purchase Option, as the case may be, will be
validly issued, fully paid and non-assessable.
17
(vii) The
Warrants included in the Units and the Underwriter’s Warrants, when executed,
authenticated, issued and delivered in the manner set forth in the Warrant
Agreement against payment therefor by the Underwriter pursuant to this Agreement
or the Underwriter’s Purchase Option, as the case may be, will be duly executed,
authenticated, issued and delivered, and will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(viii) The
shares of Common Stock issuable upon exercise of the Warrants included in the
Units and the Underwriter’s Warrants have been duly authorized and, when
executed by the Company and countersigned and issued and delivered against
payment therefor pursuant to the Warrants or the Underwriter’s Warrants, as the
case may be, and the Warrant Agreement, will be validly issued, fully paid
and
non-assessable. The holders of such Common Stock will not be subject to personal
liability by reason of being such holders; such Common Stock will not be subject
to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance
and sale of such Common Stock (other than such execution, countersignature
and
delivery at the time of issuance) will have been duly and validly
taken.
(ix) When
issued, the Underwriter’s Purchase Option will constitute a valid and binding
obligation of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise price therefor, the number and type of securities
of
the Company called for thereby in accordance with the terms thereof, and such
Underwriter’s Purchase Option is enforceable against the Company in accordance
with its respective terms, except (i) as such enforceability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(x) The
Securities conform in all material respects to all statements with respect
thereto contained in the Statutory Prospectus and the Prospectus. The
certificates for the Securities are in due and proper form.
(xi) This
Agreement has been duly and validly executed by the Company
and
constitutes the valid and binding agreement of the Company.
(xii) The
Warrant Agreement, the Underwriter’s Purchase Option, the Trust Agreement, the
Insider Letters, the Placement Warrant Purchase Agreement, the Services
Agreement, the Dividend Share Repurchase Agreement, the Registration Rights
Agreement and the Stock Escrow Agreement have each been duly and validly
authorized, executed and delivered by the Company, and constitute the valid
and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except (a) as such enforceability may
be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (b) as enforceability of any indemnification or
contribution provisions may be limited under the federal and state securities
laws, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
18
(xiii) The
execution, delivery and performance of this Agreement, The Warrant Agreement,
the Underwriter’s Purchase Option, the Trust Agreement, the Insider Letters, the
Placement Warrant Purchase Agreement, the Services Agreement, the Dividend
Share
Repurchase Agreement, the Registration Rights Agreement and the Stock Escrow
Agreement, the issuance and sale of the Securities, the consummation of the
transactions contemplated hereby and thereby, and compliance by the Company
with
the terms and provisions hereof and thereof, do not and will not, with or
without the giving of notice or the lapse of time, or both, (a) to such
counsel’s knowledge, conflict with, or result in a breach of, any of the terms
or provisions of, or constitute a default under, or result in the creation
or
modification of any lien, security interest, charge or encumbrance upon any
of
the properties or assets of the Company pursuant to the terms of, any mortgage,
deed of trust, note, indenture, loan, contract, commitment or other agreement
or
instrument filed as an exhibit to the Registration Statement, (b) result in
any
violation of the provisions of the Amended and Restated Certificate of
Incorporation or the Bylaws of the Company, or (c) to such counsel’s knowledge,
violate any statute normally applicable to transactions of this kind, or any
judgment, order or decree, or rule or regulation applicable to the Company
of
any court, domestic or foreign, or of any federal, state or other regulatory
authority or other governmental body having jurisdiction over the Company,
its
properties or assets.
(xiv) The
Registration Statement, the Statutory Prospectus and the Prospectus (other
than
the financial statements included therein, as to which no opinion need be
rendered) comply as to form in all material respects with the requirements
of
the Act and the Rules. Each agreement filed as an exhibit to the Registration
Statement conforms in all material respects to the description thereof contained
in the Statutory Prospectus and the Prospectus. There is no statute or
regulation required to be described in the Statutory Prospectus or the
Prospectus that is not described as required, nor are there any contracts or
documents known to such counsel and which are of a character required to be
described in the Statutory Prospectus or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(xv) The
Registration Statement is effective under the Act. To such counsel’s knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
(xvi) 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 Statutory
Prospectus or the Prospectus.
(xvii) Counsel
has participated in conferences with officers and other representatives of
the
Company, representatives of the independent public accountants for the Company
and representatives of the Underwriter at which the contents of the Registration
Statement, the Statutory Prospectus and the Prospectus and related matters
were
discussed and although such counsel is not passing upon and does not assume
any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Statutory Prospectus and the
Prospectus (except as otherwise set forth in this opinion), no facts have come
to the attention of such counsel which should lead them to believe that either
(A) the Registration Statement as of the Effective Date and as of the Closing
Date or Option Closing Date, as the case may be, (B) the Statutory Prospectus
as
of the Applicable Time or (C) the Prospectus, as of its date and as of the
Closing Date or Option Closing Date, as the case may be, included or includes
an
untrue statement of a material fact or omitted or omits 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 (it being understood
that such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data included
in
the Registration Statement, the Statutory Prospectus or the Prospectus; and
it
being further understood that counsel may provide negative assurance to the
effect of this section (xii)).
19
4.2.2 Reliance.
In
rendering such opinion, such counsel may rely (i) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to ▇▇▇▇▇▇▇) of other counsel
reasonably acceptable to ▇▇▇▇▇▇▇, familiar with the applicable laws, and (ii)
as
to matters of fact, to the extent they deem proper, on certificates or other
written statements of officers of the Company and officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to ▇▇▇▇▇▇▇ 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 Underwriter in its opinion delivered to the
Underwriter.
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
Underwriter and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to ▇▇▇▇▇▇▇ from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
dated, respectively, as of the date of this Agreement and as of the Closing
Date
and the Option Closing Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Rules and that they have not, during
the
periods covered by the financial statements included in the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g)
of
the Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement, the Statutory Prospectus and the Prospectus comply
as to
form in all material respects with the applicable accounting requirements of
the
Act and the published Rules thereunder;
(iii) Stating
that, on the basis of a limited review which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholders
and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible
for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that (a)
the unaudited financial statements of the Company included in the Registration
Statement, do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules or are not fairly presented
in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements of the
Company included in the Registration Statement, (b) at a date not later than
five days prior to the Effective Date, Closing Date or Option Closing Date,
as
the case may be, there was any change in the capital stock or long-term debt
of
the Company, or any decrease in the stockholders’ equity of the Company as
compared with amounts shown in the _________, 2006 balance sheet included in
the
Statutory Prospectus and the Prospectus, other than as set forth in or
contemplated by the Statutory Prospectus and the Prospectus, or, if there was
any decrease, setting forth the amount of such decrease, and (c) during the
period from ________, 2006 to a specified date not later than five days prior
to
the Effective Date, Closing Date or Option Closing Date, as the case may be,
there was any decrease in revenues, net earnings or net earnings per share
of
Common Stock, other than as set forth in or contemplated by the Statutory
Prospectus and the Prospectus, or, if there was any such decrease, setting
forth
the amount of such decrease;
20
(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company;
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Statutory 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;
(vi) Stating
that they have not during the immediately preceding five year period brought
to
the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
(vii) Statements
as to such other matters incident to the transaction contemplated hereby as
you
may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Underwriter 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, 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 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 Underwriter
will have received such other and further certificates of officers of the
Company as the Underwriter may reasonably request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Underwriter shall
have received a certificate of the Company signed by the Secretary or Assistant
Secretary of the Company, dated the Closing Date or the Option Date, as the
case
may be, respectively, certifying (i) that the Bylaws and Amended and Restated
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, and (iv) as to the incumbency of the officers of
the
Company. The documents referred to in such certificate shall be attached to
such
certificate.
21
4.5 No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any, (i)
there shall have been no material adverse change or development involving a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Statutory Prospectus,
(ii)
no action suit or proceeding, at law or in equity, shall have been pending
or
threatened against the Company or any Initial Stockholder before or by any
court
or federal or state commission, board or other administrative agency wherein
an
unfavorable decision, ruling or finding may materially adversely affect the
business, operations, prospects or financial condition or income of the Company,
except as set forth in the Statutory Prospectus and Prospectus, (iii) no stop
order shall have been issued under the Act and no proceedings therefor shall
have been initiated or threatened by the Commission, and (iv) the Statutory
Prospectus, the Registration Statement and the Prospectus and any amendments
or
supplements thereto shall contain all material statements which are required
to
be stated therein in accordance with the Act and the Rules and shall conform
in
all material respects to the requirements of the Act and the Rules, and neither
the Statutory 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.
4.5.1 Closing
Date Delivery of UPO.
On the
Closing Date, the Company shall have delivered to the Underwriter the
Underwriter’s Purchase Option.
4.6 Opinion
of Counsel for the Underwriter.
All
proceedings taken in connection with the authorization, issuance or sale of
the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to you and to ▇▇▇▇▇▇▇ and you shall have received from ▇▇▇▇▇▇▇ a
favorable opinion, dated the Closing Date and each 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, ▇▇▇▇▇▇▇ 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 4.6, or in
order to evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
5. Indemnification.
5.1 Indemnification
of Underwriter.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless the Underwriter, 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 the Underwriter (“controlling person”) or any such Selected
Dealer 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 the Underwriter and the Company or between the
Underwriter and any third party or otherwise) to which they or any of them
may
become subject under the Act, the Exchange Act or any other statute or at common
law or otherwise or under the laws of foreign countries, arising out of or
based
upon any untrue statement or alleged untrue statement of a material fact
contained in (i) any Preliminary Prospectus, the Registration Statement or
the
Prospectus (as from time to time each may be amended and supplemented); (ii)
in
any post effective amendment or amendments or any new registration statement
and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Underwriter’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 or any securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company with respect to the Underwriter by or on behalf of the
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in any
application, as the case may be. The Company agrees promptly to notify the
Underwriter 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, any Preliminary Prospectus or the Prospectus.
22
5.1.2 Procedure.
If any
action is brought against the Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5.5.1, the 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; provided,
that
the failure to give such notice shall not relieve the Company from any liability
it may have to the Underwriter, a Selected Dealer or controlling person in
respect of its indemnification obligations hereunder, except to the extent
the
Company has been materially prejudiced (through forfeiture of substantive rights
or defenses) by such failure and; provided further,
that
the failure to notify the Company shall not relieve the Company, in any event,
from any liability that it may have to the Underwriter, a Selected Dealer or
controlling person otherwise than in respect of its indemnification obligations
hereunder. The 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 the 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 take charge of the defense of such action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may
be
defenses available to it or them which are different from or additional to
those
available to the Company (in which case the Company shall not have the right
to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events the reasonable fees and expenses of not more
than one additional firm of attorneys selected by the Underwriter, Selected
Dealer and/or controlling person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if the Underwriter, Selected Dealer
or controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company.
The
Underwriter 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 Underwriter, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions made
in any Preliminary Prospectus, the Registration Statement or Prospectus or
any
amendment or supplement thereto or in any application, in reliance upon, and
in
strict conformity with, written information furnished to the Company with
respect to the Underwriter by or on behalf of the Underwriter expressly for
use
in such Preliminary Prospectus, the Registration Statement or Prospectus or
any
amendment or supplement thereto or in any such application. In case any action
shall be brought against the Company or any other person so indemnified based
on
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against the Underwriter, the 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 Underwriter by the
provisions of Section 5.1.2.
23
5.3 Contribution.
5.3.1 Contribution
Rights.
In
order to provide for just and equitable contribution under the Act in any case
in which (i) any person entitled to indemnification under this Section 5 makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required on
the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriter 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 Underwriter, as incurred, in such proportion
that the Underwriter is responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company
is responsible for the balance; provided,
that,
no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who
was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 5.3.1, the Underwriter shall not 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 the Underwriter
has
otherwise been required to pay in respect of such losses, liabilities, claims,
damages and expenses. For purposes of this Section 5 each director, officer
and
employee of the Underwriter or the Company, as applicable, and each person,
if
any, who controls the Underwriter or the Company, as applicable, within the
meaning of Section 15 of the Act shall have the same rights to contribution
as
the Underwriter or the Company, as applicable.
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing
party”),
notify the contributing party of the commencement thereof, but the omission
to
so notify the contributing party will not relieve it from any liability which
it
may have to any other party other than for contribution hereunder. In case
any
such action, suit or proceeding is brought against any party, and such party
notifies a contributing party or its representative of the commencement thereof
within the aforesaid fifteen days, the contributing party will be entitled
to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any
party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section 5 are intended to supersede,
to the extent permitted by law, any right to contribution under the Act, the
Exchange Act or otherwise available. The Underwriter’ obligations to contribute
pursuant to this Section 5.3 are several and not joint.
24
6. Additional
Covenants.
6.1 Additional
Shares or Options.
The
Company hereby agrees that until the earlier of the consummation of a Business
Combination or the distribution of the Trust Account referred to in Section
6.4
hereof, 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 Account or which vote as a class with
the
Common Stock on a Business Combination.
6.2 Trust
Account Waiver Acknowledgment.
The
Company hereby agrees that prior to commencing its due diligence investigation
of any operating business which the Company seeks to acquire for its initial
Business Combination (“Target
Business”)
or
obtaining the services of any vendor, it will use its best efforts to cause
the
Target Business or vendor to execute a waiver letter substantially in the form
attached hereto as Exhibit B. Notwithstanding the foregoing, in the event any
Target Business, vendor or other third party refuses to execute such a letter,
the Company may nonetheless commence its due diligence investigations of such
Target Business or obtain the services of any such vendor or third party if
and
only if the Company’s board of directors determines in good faith after due
inquiry that the Company would be unable to obtain, on a reasonable basis,
substantially similar services or opportunities from another entity willing
to
execute such a waiver.
6.3 Blue
Sky Requirements.
In
connection with a Business Combination, concurrently with such filing with
the
Commission, the Company shall furnish any other state in which the Offering
was
registered, such information as may be requested by such state.
6.4 Acquisition/Distribution
Procedure.
The
Company agrees: (i) that, prior to the consummation of the initial 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 18 months from
the consummation of this Offering (subject to extension for an additional
six-month period, as described in the Prospectus), the Company will be dissolved
as promptly as practicable, and, subject to creditors claims, payment of taxes
and the dissolution provisions of the Delaware General Corporation Law, the
assets will be liquidated and distributed only to the holders of IPO Shares
(as
defined below) in an aggregate sum equal to or greater than the Trust
Liquidation Value. The “Trust Liquidation Value” shall mean the amount then on
deposit in the Trust Account, inclusive of (i) the proceeds held in trust from
this Offering and the sale of the Placement Warrants, (ii) the 2.0% of the
proceeds held in the Trust Account representing the Deferred Compensation,
and
(iii) any interest (net of taxes payable) not released to the Company to fund
it’s working capital, including any interest earned on the portion of the
proceeds held in the Trust Account representing the Deferred Compensation.
Only
holders of IPO Shares shall be entitled to receive liquidating distributions
in
dissolution and the Company shall pay no such distributions with respect to
any
other shares of capital stock of the Company. With respect to the initial
Business Combination Vote, the Company shall cause all of the Existing
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
the initial Business Combination, the Company will offer each holder of the
Company’s Common Stock issued in this Offering (the “IPO
Shares”)
the
right to convert their IPO Shares at a per share conversion price (the
“Conversion
Price”)
equal
to (A) the amount in the Trust Account as of two business days prior to the
Business Combination Vote, excluding the portion of the proceeds attributable
to
the Deferred Compensation (but not excluding interest earned on such portion),
divided
by
(B) the
total number of IPO Shares. If holders of less than 20% in interest of the
Company’s IPO Shares vote against such approval of a Business Combination and
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. Only holders of IPO Shares shall be entitled to receive
the Conversion Price and the Company shall pay no other shares of capital stock
of the Company the Conversion Price. If holders of 20% or more in interest
of
the IPO Shares vote against approval of any potential Business Combination
and
elect to convert their IPO Shares, the Company will not proceed with such
Business Combination and will not convert such shares.
25
6.5 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.
6.6 Target
Net Assets.
The
Company agrees that the initial Target Business(es) in a Business Combination
must have a fair market value equal to at least 80% of the Company’s net assets
(excluding the Deferred Compensation) at the time of such Business Combination.
The fair market value of such business(es) must be determined by the Board
of
Directors of the Company based upon standards generally accepted by the
financial community, such as actual and potential sales, earnings and cash
flow
and book value. If the Board of Directors of the Company is not able to
independently determine that the Target Business(es) has a fair market value
of
at least 80% of the Company’s net assets (excluding the Deferred Compensation)
at the time of such Business Combination, the Company will obtain an opinion
from an unaffiliated, independent investment banking firm 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 of the Target
Business(es) if the Company’s Board of Directors independently determines that
the Target Business(es) has a sufficient fair market value.
6.7 Dividend
Share Repurchase Agreement.
In the
event that the Underwriter has not exercised its entire Over-Allotment Option
as
of the expiration or termination of the 45-day option period, the Company agrees
that within two (2) business days of the expiration or termination of the
Over-Allotment Option, the Company shall exercise its right pursuant to the
Dividend Share Repurchase Agreement to repurchase shares of Common Stock, at
their par value of $0.0001 per share, from the Existing Stockholders in an
amount sufficient to cause the Existing Stockholders to collectively maintain
beneficial ownership of no more than 20% of the Common Stock then-outstanding
after giving effect to the Offering and the exercise or expiration of the
Over-Allotment Option or any portion thereof.
7. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Dates and such representations,
warranties and agreements of the Underwriter and Company, including the
indemnity agreements contained in Section 5 hereof, shall remain operative
and
in full force and effect regardless of any investigation made by or on behalf
of
any Underwriter, the Company or any controlling person, and shall survive
termination of this Agreement or the issuance and delivery of the Securities
to
the Underwriter.
8. Termination
of this Agreement.
8.1 Termination.
You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, Nasdaq,
the
Boston Stock Exchange or on the NASD OTC Bulletin Board (or successor trading
market) shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been fixed, or maximum ranges for prices for securities shall have been required
on the NASD OTC Bulletin Board or by order of the Commission or any other
government authority having jurisdiction, or (iii) if the United States shall
have become involved in a new war or an increase in major hostilities, or (iv)
if a banking moratorium has been declared by a New York State or federal
authority, or (v) if a moratorium on foreign exchange trading has been declared
which materially adversely impacts the United States securities market, or
(vi)
if the Company shall have sustained a material loss by fire, explosion, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in your
opinion, make it inadvisable to proceed with the delivery of the Units, (vii)
if
any of the Company’s representations, warranties or covenants hereunder are
materially breached, or (viii) if the Underwriter shall have become aware after
the date hereof of such a material adverse change in the conditions or prospects
of the Company, or such adverse material change in general market conditions,
including without limitation as a result of terrorist activities after the
date
hereof, as in the Underwriter’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 Underwriter for the sale of the Securities.
26
8.2 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 3.8.1
hereof.
8.3 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be
in
any way affected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
9. Miscellaneous.
9.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered or telecopied and confirmed
and shall be deemed given when so delivered or telecopied and confirmed or
if
mailed, two days after such mailing:
If
to the
Underwriter:
CRT
Capital Group LLC
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
Investment Banking
Copy
to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If
to the
Company:
▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇
Attn:
K.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Copy
to:
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ PC
Chrysler
Center
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, Esq.
27
9.2 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.
9.3 Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
9.4 Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof and thereof, and supersedes all prior agreements
and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Underwriter, 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.
9.6 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflict of laws. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of New
York
or in the United States District Court 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 this Section 9. Such
mailing shall be deemed personal service and shall be legal and binding upon
the
Company in any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from
the
other party(ies) all of its reasonable attorneys’ fees and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
9.7 No
Fiduciary Duty.
The
Company acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement is an arm's-length commercial transaction between
the
Company, on the one hand, and the Underwriter, on the other, (ii) in connection
therewith the Underwriter is acting solely as a principal and not as the agent
or fiduciary of the Company, (iii) the Underwriter has not assumed an advisory
or fiduciary responsibility in favor of the Company with respect to the Offering
(irrespective of whether the Underwriter has advised or is currently advising
the Company on other matters) or any other obligation to the Company except
the
obligations expressly set forth in this Agreement and (iv) the Company has
consulted its own legal and financial advisors to the extent it deemed
appropriate. The Company agrees that it will not claim that the Underwriter
has
rendered advisory services of any nature or respect, or owe a fiduciary or
similar duty to the Company in connection with the Offering.
28
9.8 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
9.9 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way affect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
If
the
foregoing correctly sets forth the understanding between the Underwriter 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, | ||
| APEX BIOVENTURES ACQUISITION CORPORATION | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
Accepted
on the date first above
written
|
||
| CRT CAPITAL GROUP LLC | ||
| By: | ||
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Title: Managing Director |
||
29
SCHEDULE
2.17.4
[
List
all Company directors, officers and beneficial owners of Company stock that
have
NASD affiliations ]
EXHIBIT
A
FORM
OF TRUST CLAIM WAIVER LETTER
[Letterhead
of prospective vendor or target business.]
▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇▇▇▇
Ladies
and Gentlemen:
Reference
is made to the Prospectus of APEX Bioventures Acquisition Corporation (the
“Company”), dated _____ , 2006 (the “Prospectus”).
We
acknowledge that we have read the Prospectus and understand that the Company
has
established a trust account for the benefit of the Company’s public stockholders
at JPMorgan Chase Bank, NA, maintained by Continental Stock Transfer & Trust
Company acting as trustee (the “Trust Account”) and that the Company may
disburse monies from the Trust Account only:
(a)
in
the
event the Company consummates a “business combination” (as such term is used in
the Prospectus), to any public stockholders who exercise their conversion
rights, to the Underwriter in respect of its deferred underwriting discount
and
to the Company in the amount remaining in the Trust Account following such
payments to the public stockholders and the Underwriter; or
(b)
in
the
event of the Company’s liquidation, to the public stockholders.
For
and
in consideration of the Company [agreeing
to evaluate us for purposes of consummating an initial business
combination][engaging
our services],
we
hereby agree that we do not have any right, title, interest or claim of any
kind
in or to any monies in the Trust Account (“Claim”) and hereby waive any Claim we
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 Account for any reason whatsoever.
| Yours very truly, | |||
| [NAME] | |||
| By: | |||
|
Name:
Title:
|
|||