IDEATION ACQUISITION CORP. [FORM OF WARRANT PURCHASE AGREEMENT]
Exhibit 10.7
[FORM OF WARRANT PURCHASE AGREEMENT]
THIS WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of , 2007, is entered into
by and among Ideation Acquisition Corp., a Delaware corporation (the “Company”), and the purchasers
listed in Schedule A hereto (each a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, simultaneously with the consummation of the Company’s initial public offering (the
“IPO”), the Company desires to issue and sell and the Purchasers desire to purchase, in the
respective amounts set forth opposite each Purchaser’s name on Schedule A hereto and upon
the terms and conditions set forth in this Agreement, an aggregate of 2,400,000 warrants (the
“Insider Warrants”), each to purchase one share of the Company’s common stock, par value $0.0001
per share (the “Common Stock”);
WHEREAS, the Insider Warrants shall have the terms set forth in the warrant agreement to be
entered into by and between the Company and Continental Stock Transfer & Trust Company, as Warrant
Agent, in connection with the IPO, substantially in the form attached hereto as Exhibit A
(the “Warrant Agreement”); and
WHEREAS, pursuant to the terms of an escrow agreement to be entered into by and among the
Company, the Initial Stockholders (as defined therein) and Continental Stock Transfer & Trust
Company, as Escrow Agent (the “Escrow Agent”), in connection with the IPO (the “Escrow Agreement”),
the Insider Warrants will be deposited with the Escrow Agent upon issuance.
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby agree as follows:
1. Authorization; Purchase and Sale; Terms of the Insider Warrants.
1.1. Authorization of the Insider Warrants. The Company has duly authorized the issuance and
sale of the Insider Warrants to the Purchasers.
1.2. Purchase and Sale of the Insider Warrants. Immediately prior to the effective date of
the registration statement on Form S-1 filed in connection with the IPO, or on such earlier date as
may be established from time to time by mutual agreement of the parties (such date, the “Closing
Date”), the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from
the Company, the respective number of Insider Warrants set forth opposite each Purchaser’s name on
Schedule A hereto. The purchase price for each Insider Warrant shall be $1.00 per warrant,
for an aggregate purchase price of $2,400,000 (the “Purchase Price”), which shall be paid in cash,
by check or by wire transfer of immediately available funds to the Company in accordance with the
Company’s wiring instructions. On the Closing Date, upon the payment by the Purchasers of the
Purchase Price to the Company, the Company shall deliver certificates evidencing the Insider
Warrants to be purchased by the Purchasers hereunder, registered in the Purchasers’ respective
names, to the Escrow Agent for deposit pursuant to the Escrow Agreement.
1.3. Terms of the Insider Warrants.
(a) Each Insider Warrant shall have the terms set forth in the Warrant Agreement.
(b) In addition to the restrictions on transfer set forth in Section 5 hereof, each Purchaser
acknowledges that, pursuant to and subject to the terms of the Escrow Agreement, the Insider
Warrants will be deposited with the Escrow Agent and held in escrow until the date that is 90 days
after the consummation of an Initial Business Combination (as defined in the Company’s Amended and
Restated Certificate of Incorporation).
(c) In connection with the IPO, the Company and the Purchasers shall enter into an agreement
(the “Registration Rights Agreement”) granting the Purchasers registration rights with respect to
the
Insider Warrants and the shares of Common Stock issuable upon exercise of the Insider Warrants
(the “Warrant Shares” and together with the Insider Warrants, the “Securities”).
2. Representations and Warranties of the Company. The Company hereby represents and
warrants to each Purchaser that:
2.1. Organization and Corporate Power. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and is qualified to
do business in every jurisdiction in which the failure to so qualify would reasonably be expected
to have a material adverse effect on the financial condition, operating results or assets of the
Company. The Company possesses the requisite corporate power and authority necessary to carry out
the transactions contemplated by this Agreement.
2.2. Authorization. The execution, delivery and performance of this
Agreement has been duly authorized by the Company as of the date hereof. This Agreement
constitutes the valid and binding obligation of the Company, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and except as such enforcement is subject to
equitable principles of general applicability (regardless of whether enforcement is considered in a
proceeding in equity or at law).
2.3. Issuance of Securities. The Insider Warrants have been duly authorized and, when
executed by the Company, countersigned in the manner provided for in the Warrant Agreement and
delivered and paid for as contemplated herein, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof is subject to equitable principles of
general applicability (regardless of whether enforcement is considered in a proceeding in equity or
at law). The Warrant Shares have been duly authorized and, when issued and paid for as
contemplated in the Insider Warrants and the Warrant Agreement, will be validly issued, fully paid
and non-assessable.
3. Representations and Warranties of the Purchasers. Each Purchaser hereby represents
and warrants to the Company that:
3.1. Authorization. This Agreement constitutes a valid and binding obligation of each
Purchaser, enforceable in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and
except as such enforcement is subject to equitable principles of general applicability (regardless
of whether enforcement is considered in a proceeding in equity or at law).
3.2. Investment Representations.
(a) Each Purchaser is acquiring the Insider Warrants and, upon exercise of the Insider
Warrants, will acquire the Warrant Shares, for his, her or its own account, for investment only and
not with a view towards, or for resale in connection with, any public sale or distribution thereof.
(b) Each Purchaser is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of
1933, as amended (the “Securities Act”).
(c) Each Purchaser understands that the Securities are being offered and will be sold to him,
her or it in reliance on specific exemptions from the registration requirements of the United
States federal and state securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser’s compliance with, the representations and warranties of each
Purchaser set forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire such Securities.
(d) No Purchaser decided to enter into this Agreement as a result of any general solicitation
or general advertising within the meaning of Rule 502 under the Securities Act.
(e) Each Purchaser has been furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities which
have been requested by such Purchaser. Each Purchaser has been afforded the opportunity to ask
questions of the officers and directors of the Company. Each Purchaser understands that his, her or
its investment in the Securities involves a high degree of risk. Each Purchaser has sought such
accounting, legal and tax advice as such Purchaser has considered necessary to make an informed
investment decision with respect to the Purchaser’s acquisition of the Securities.
(f) Each Purchaser understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or endorsement of the
Securities or the fairness or suitability of the investment in the Securities by the Purchaser nor
have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g) Each Purchaser understands that the Securities have not been and are not being registered
under the Securities Act or any state securities laws and may not be offered for sale, sold,
assigned or transferred unless (i) subsequently registered thereunder or (ii) sold in reliance on
an exemption therefrom.
(h) Each Purchaser has such knowledge and experience in financial and business matters, knows
of the high degree of risk associated with investments generally and particularly investments in
the securities of companies in the development stage such as the Company, is capable of evaluating
the merits and risks of an investment in the Securities and is able to bear the economic risk of an
investment in the Securities in the amount contemplated hereunder for an indefinite period of time.
Each Purchaser has adequate means of providing for his, her or its current financial needs and
contingencies and will have no current or anticipated future needs for liquidity which would be
jeopardized by the investment in the Securities. Each Purchaser can afford a complete loss of his,
her or its investment in the Securities.
4. Closing Conditions.
4.1. The obligation of each Purchaser to purchase and pay for Insider Warrants is subject to
the fulfillment, on or before the Closing Date, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of the Company
contained in Section 2 shall be true and correct at and as of the Closing Date as though then made.
(b) No Injunction. No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court
or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Warrant Agreement.
4.2. The obligations of the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing Date, of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of the
Purchasers contained in Section 3 shall be true and correct at and as of the Closing Date as though
then made.
(b) No Injunction. No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court
or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Warrant Agreement.
5. Miscellaneous.
5.1. Certificates; Legends.
(a) The certificates evidencing the Insider Warrants shall be substantially in the form
attached as Exhibit B to the Warrant Agreement. Until such time as a registration statement
covering the transfer of Securities has been declared effective or the Securities may be sold
pursuant to Rule 144 under the Securities Act without any restriction as to the number of
Securities as of a particular date that can then be immediately sold, the Securities will include a
legend substantially in the following form:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS, AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, ONLY IF
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION
DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”
(b) Each Purchaser agrees, prior to any permitted transfer of the Securities, to give written
notice to the Company expressing his, her or its desire to effect such transfer and describing
briefly the proposed transfer. Upon receiving such notice, the Company shall present copies thereof
to its counsel and such Purchaser agrees not to make any disposition of all or any portion of the
Securities unless and until (i) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made in accordance with
such registration statement or (ii) if reasonably requested by the Company, (x) the Purchaser shall
have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such Securities under the Securities Act, (y) the
Company shall have received customary representations and warranties regarding the transferee that
are reasonably satisfactory to the Company signed by the proposed transferee and (z) the Company
shall have received an agreement by such transferee to the restrictions contained in the legends
referred to in Section 5.1(a) hereof.
5.2. Successors and Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of the respective successors of the parties hereto whether so
expressed or not. Notwithstanding the foregoing, the parties may not assign this Agreement,
except that each Purchaser may assign this agreement to one or more of his, her or its
affiliates.
5.3. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
5.4. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, none of which need contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same agreement.
5.5. Descriptive Headings. The descriptive headings of this Agreement are inserted
for convenience only and do not constitute a substantive part of this Agreement.
5.6. Governing Law. This Agreement shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be construed in accordance with the
internal laws of said State.
5.7. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
5.8. Notice. FOR FLORIDA RESIDENTS ONLY:
IF APPLICABLE, PURSUANT TO SECTION 517.061(11)(A)(5) OF THE FLORIDA STATUTES, FLORIDA INVESTORS
HAVE A THREE-DAY RIGHT OF RESCISSION. IF A FLORIDA INVESTOR HAS EXECUTED A SECURITIES PURCHASE
AGREEMENT, HE MAY ELECT, WITHIN THREE BUSINESS DAYS AFTER SIGNING THE SECURITIES PURCHASE AGREEMENT
OR BEING FIRST NOTIFIED OF THIS RIGHT, WHICHEVER IS LATER, TO WITHDRAW FROM THE SECURITIES PURCHASE
AGREEMENT AND RECEIVE A FULL REFUND AND RETURN (WITHOUT INTEREST) OF ANY MONEY PAID BY HIM. A
FLORIDA INVESTOR’S WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH
SUCH WITHDRAWAL, A FLORIDA INVESTOR NEED ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY INDICATING
HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND POSTMARKED PRIOR TO THE END OF
THE AFOREMENTIONED THIRD BUSINESS DAY. IF A FLORIDA INVESTOR SENDS A LETTER, IT IS PRUDENT TO SEND
IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE COMPANY TO ENSURE THAT IT IS RECEIVED AND
ALSO TO EVIDENCE THE TIME AND DATE WHEN IT IS MAILED. SHOULD A FLORIDA INVESTOR MAKE THIS REQUEST
ORALLY, HE SHOULD ASK FOR WRITTEN CONFIRMATION THAT HIS REQUEST HAS BEEN RECEIVED.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| IDEATION ACQUISITION CORP. |
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| By: | ||||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | President and Chief Executive Officer | |||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| FROST GAMMA INVESTMENTS TRUST |
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| By: | ||||
| Name: | ||||
| Title: | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxxx X. Xxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxx Xxxxxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxxx X. Xxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxx Xxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxxx X. Xxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxx Xxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxx X. Xxxxxxxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxxxx X. Xxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| Xxxx Xxxx | ||||
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| NAUTILUS TRUST DTD 9/10/99 |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Schedule A
| Purchaser: | Insider Warrants Purchased: | Purchase Price of Insider Warrants: | ||||||
Frost Gamma Investments Trust |
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Xxxxxx X. Xxxxx |
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Xxx Xxxxxxxx |
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Xxxxxx X. Xxxxx |
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Xxxx Xxxxx |
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Xxxxxx X. Xxxxx |
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Xxxxx Xxxx |
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Xxxxx X. Xxxxxxxxx |
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Xxxxxx X. Xxxx |
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Xxxx Xxxx |
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Nautilus Trust dtd 9/10/99 |
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Exhibit A
(Form of Warrant Agreement filed separately as Exhibit 4.[_])
