UNDERWRITING AGREEMENT between 57TH STREET GENERAL ACQUISITION CORP. and MORGAN JOSEPH & CO. INC. Dated: , 2010
Exhibit
1.1
between
00XX
XXXXXX GENERAL ACQUISITION CORP.
and
XXXXXX
XXXXXX & CO. INC.
Dated: ,
0000
00XX
XXXXXX GENERAL ACQUISITION CORP.
,
2010
Xxxxxx
Xxxxxx & Co. Inc.
000 Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
As
Representative of the
Several
Underwriters named in Schedule I hereto
Re:
Public Offering of Securities
Ladies
and Gentlemen:
The
undersigned, 00xx Xxxxxx General Acquisition Corp., a Delaware corporation
(“Company”),
hereby confirms its agreement with Xxxxxx Xxxxxx & Co. Inc. (“Xxxxxx
Xxxxxx & Co.”) and with the other underwriters named on Schedule I
hereto for which Xxxxxx Xxxxxx & Co. is acting as representative (Xxxxxx
Xxxxxx & Co., in its capacity as representative, is referred to herein
variously as “you,” or the “Representative”;
the Representative and the other underwriters are collectively referred to as
the “Underwriters”
or, individually, an “Underwriter”)
as follows:
1. Purchase and Sale of
Securities.
1.1 Firm
Securities.
1.1.1 Purchase of Firm
Units. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell, severally and not jointly, to the several
Underwriters, an aggregate of 5,000,000 units (“Firm
Units”) of the Company, at a purchase price (net of discounts and
commissions and Contingent Fees described in Section 1.1.3 below) of $9.30 per
Firm Unit. The Underwriters, severally and not jointly, agree to
purchase from the Company the number of Firm Units set forth opposite their
respective names on Schedule I attached hereto and made a part hereof at a
purchase price (net of discounts and commissions and Contingent Fees described
in Section 1.1.3 below) of $9.30 per Firm Unit. The Firm Units are to
be offered initially to the public (“Offering”)
at the offering price of $10.00 per Firm Unit. Each Firm Unit
consists of one share of the Company’s common stock, par value $.0001 per share
(“Common
Stock”), and one warrant (“Warrant”). The
shares of Common Stock and the Warrants included in the Firm Units will trade
separately on the fifth business day following the earlier to occur of the
expiration of the Over-allotment Option (as defined in Section 1.2.1 hereof),
which is 45 days from the date of the Prospectus (as defined in Section 2.1.1
hereof), its exercise in full or the announcement by the Underwriters of their
intention not to exercise all or any remaining portion of the Over-allotment
Option, but in no event will the shares of Common Stock and the Warrants
included in the Firm Units trade separately until the business day after (i) the
Company has filed with the Securities and Exchange Commission (the “Commission”)
a Current Report on Form 8-K which includes an audited balance sheet reflecting
the Company’s receipt of the proceeds of the Offering and the Private Placement
(as defined in Section 1.3), including any proceeds the Company receives from
the exercise of the Over-allotment Option if such option is exercised prior to
the filing of the Form 8-K, (ii) the Company has filed with the Commission a
Current Report on Form 8-K and issued a press release announcing when such
separate trading will begin, and (iii) the expiration of the Over-allotment
Option or its exercise in full. Each Warrant entitles its holder to
exercise it to purchase one share of Common Stock for $11.50 during the period
commencing on the later of 30 days after the consummation by the Company of its
“Business Transaction” 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 five-year anniversary of the consummation by the Company
of its initial Business Transaction. “Business
Transaction” shall mean the Company’s acquisition of one or more
operating businesses or assets through a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization, exchangeable share transaction or
other similar business transaction.
1.1.2 Payment and
Delivery. Delivery and payment for the Firm Units shall be
made at 10:00 a.m., New York City time, on the fourth Business Day (as defined
below) following the effective date of the Registration Statement or at such
earlier time as shall be agreed upon by the Representative and the Company at
the offices of XxXxxxxxx Will & Xxxxx LLP (“XxXxxxxxx”)
or at such other place as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm Units
are called “Closing
Date.” Payment for the Firm Units shall be made on the Closing
Date at the Representative’s election by wire transfer in Federal (same day)
funds or by certified or bank cashier’s check(s) in New York Clearing House
funds, payable as follows: $50,000,000 of the proceeds received by the Company
for the Firm Units and the Placement Warrants (as defined in Section 1.3) shall
be deposited (or with respect to the $1,850,000 of the proceeds from the
sale of the Placement Warrants shall have been deposited on or prior to the
Closing Date) in the trust account established by the Company for the benefit of
the public stockholders as described in the Registration Statement (“Trust
Account”) pursuant to the terms of an Investment Management Trust
Agreement (“Trust
Agreement”) between the Company and Continental Stock Transfer &
Trust Company (“CST”)
and the remaining proceeds shall be paid (subject to Section 3.12 hereof) to the
order of the Company upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Firm Units (or through the
facilities of the Depository Trust Company (“DTC”))
for the account of the Underwriters. The Firm Units shall be
registered in such name or names and in such authorized denominations as the
Representative may request in writing at least two full Business Days prior to
the Closing Date. The Company will permit the Representative to
examine and package the Firm Units for delivery, at least one full Business Day
prior to the Closing Date. The Company shall not be obligated to sell
or deliver the Firm Units except upon tender of payment by the Representative
for all the Firm Units. “Business
Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
1.1.3 Contingent
Fees. The following additional contingent fees (the “Contingent
Fees”) will become payable from the amounts held in the Trust Account
solely in the event the Company consummates the Business Transaction: (A) a
deferred fee equal to 1.1% of the gross proceeds from the sale of the units to
the public payable to the Underwriters; (B) an advisory fee equal to 1.0% of the
gross proceeds from the sale of units offered to the public payable to Xxxxxx
Xxxxxx & Co. for providing general advice to the Company during the 15 month
period following the date hereof (which fee shall be increased to 1.5% if the
Company consummates its initial Business Transaction with a business or asset
introduced to the Company by Xxxxxx Xxxxxx & Co.); and (C) a contingent fee
equal to 2.5% of the aggregate amount of the funds released from the Trust
Account to the Company and/or to the target of the Business Transaction upon
consummation of the Company’s initial Business Transaction payable to Xxxxxx
Xxxxxx & Co. and such other firms as agreed upon by the Company and Xxxxxx
Xxxxxx & Co. (who may or may not have been involved with the Offering), if
any, who are instrumental in advising the Company in connection with the
consummation of the Business Transaction. In the event that the
Company is unable to consummate a Business Transaction and CST, the trustee of
the Trust Account, commences liquidation of the Trust Account, Xxxxxx Xxxxxx
& Co. hereby agrees to the following: (i) to forfeit any rights or claims to
the Contingent Fees; and (ii) that the Contingent Fees shall be distributed on a
pro-rata basis among the holders of the shares of Common Stock included in the
Units sold in the Offering along with any interest accrued thereon, net of
taxes.
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1.2 Over-Allotment
Option.
1.2.1 Option
Units. For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Units, the Underwriters
are hereby granted, severally and not jointly, an option to purchase up to an
additional 750,000 units from the Company (“Over-allotment
Option”). Such additional 750,000 units, the net proceeds of
which will be deposited in the Trust Account, are hereinafter referred to as
“Option
Units.” The Firm Units and the Option Units are hereinafter
collectively referred to as the “Units,”
and the Units, the shares of Common Stock and the Warrants included in the Units
and the shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the “Public
Securities.” The purchase price to be paid for the Option
Units will be the same price per Option Unit as the price per Firm Unit set
forth in Section 1.1.1 hereof.
1.2.2 Exercise of
Option. The Over-allotment Option granted pursuant to Section
1.2.1 hereof may be exercised by the Representative as to all (at any time) or
any part (from time to time) of the Option Units within 45 days after the
Effective Date. The Underwriters will not be under any obligation to
purchase any Option Units prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised by
the giving of oral notice to the Company by the Representative, which must be
confirmed in writing by overnight mail or facsimile transmission setting forth
the number of Option Units to be purchased and the date and time for delivery of
and payment for the Option Units (the “Option
Closing Date”), which will not be later than five full Business Days
after the date of the notice or such other time and in such other manner as
shall be agreed upon by the Company and the Representative, at the offices of
XxXxxxxxx or at such other place as shall be agreed upon by the Company and the
Representative. Upon exercise of the Over-allotment Option, the
Company will become obligated to convey to the Underwriters, and, subject to the
terms and conditions set forth herein, the Underwriters will become obligated to
purchase, the number of Option Units specified in such notice.
1.2.3 Payment and
Delivery. Payment for the Option Units shall be made on the
Option Closing Date at the Representative’s election by wire transfer in Federal
(same day) funds or by certified or bank cashier’s check(s) in New York Clearing
House funds, payable as follows: $9.30 per Option Unit shall be deposited in the
Trust Account pursuant to the Trust Agreement and the remaining proceeds shall
be paid (subject to Section 3.12 hereof) to the order of the Company upon
delivery to you of certificates (in form and substance satisfactory to the
Underwriters) representing the Option Units (or through the facilities of DTC)
for the account of the Underwriters. The certificates representing
the Option Units to be delivered will be in such denominations and registered in
such names as the Representative requests not less than two full Business Days
prior to the Closing Date or the Option Closing Date, as the case may be, and
will be made available to the Representative for inspection, checking and
packaging at the aforesaid office of the Company’s transfer agent or
correspondent not less than one full Business Day prior to such Closing
Date.
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1.3 Placement
Warrants. Pursuant to an Amended and Restated Warrant
Subscription Agreement, annexed as Exhibit 10.11 of the Registration Statement
(the “Subscription
Agreement”), the Company shall issue and sell to 57th Street GAC Holdings
LLC, a limited liability company wholly owned by the Company’s officers,
directors and advisors (the “Sponsor”)
and the Underwriters an aggregate of 3,700,000 warrants having the terms
described in the Subscription Agreement (the “Placement
Warrants”), for a purchase price of $0.50 per Placement Warrant, in a
private placement pursuant to Section 4(2) of the Act occurring prior to the
Closing (the “Private
Placement”).
2. Representations and
Warranties of the Company. The Company represents and warrants
to the Underwriters as follows:
2.1 Filing of Registration
Statement.
2.1.1 Pursuant to the
Act. The Company has filed with the Commission a registration
statement and an amendment or amendments thereto, on Form S-1 (File No.
333-163134), including any related preliminary prospectus (“Preliminary
Prospectus”), for the registration of the Securities under the Securities
Act of 1933, as amended (“Act”),
which registration statement and amendment or amendments have been prepared by
the Company in conformity with the requirements of the Act, and the rules and
regulations (the “Regulations”)
of the Commission under the Act. The conditions for use of Form S-1
to register the Offering under the Act, as set forth in the General Instructions
to such Form, have been satisfied. 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 Rule 430A of the Regulations), is
hereinafter called the “Registration
Statement,” and the form of the final prospectus dated the Effective Date
included in the Registration Statement (or, if applicable, the form of final
prospectus filed by the Company with the Commission pursuant to Rule 424 of the
Regulations), is hereinafter called the “Prospectus.” For
purposes of this Agreement, “Time of
Sale,” as used in the Act, means 4:30 p.m. New York City time, on the
date of this Agreement. Prior to the Time of Sale, the Company
prepared a preliminary Prospectus, which was included in the Registration
Statement dated April 27, 2010, for distribution by the Underwriters (the “Sale
Preliminary Prospectus”). If the Company has filed, or is
required pursuant to the terms hereof to file, a Registration Statement pursuant
to Rule 462(b) under the Act registering additional Securities of any type (a
“Rule
462(b) Registration Statement”), then, unless otherwise specified, any
reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462(b) Registration
Statement. Other than a Rule 462(b) Registration Statement, which, if
filed, becomes effective upon filing, no other document with respect to the
Registration Statement has heretofore been filed with the
Commission. All of the Public Securities have been registered for
public sale under the Act pursuant to the Registration Statement or, if any Rule
462(b) Registration Statement is filed, will be duly registered for public sale
under the Act with the filing of such Rule 462(b) Registration
Statement. The Registration Statement has been declared effective by
the Commission on the date hereof. If, subsequent to the date of this
Agreement, the Company or the Representative has determined that at the Time of
Sale the Sale Preliminary Prospectus includes an untrue statement of a material
fact or omitted a statement of material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and have agreed to provide an opportunity to purchasers of the Firm
Units to terminate their old purchase contracts and enter into new purchase
contracts, then the Sale Preliminary Prospectus will be deemed to include any
additional information available to purchasers at the time of entry into the
first such new purchase contract.
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2.1.2 Pursuant to the Exchange
Act. The Company has filed with the Commission a Form 8-A
(File Number 000-53977) providing for the registration under the Securities
Exchange Act of 1934, as amended (“Exchange
Act”), of the Units, the Common Stock and the Warrants. The
registration of the Units, Common Stock and Warrants under the Exchange Act has
been declared effective by the Commission on the date hereof.
2.2 No Stop Orders,
Etc. Neither the Commission nor, to the best of the Company’s
knowledge, any state regulatory authority has issued any order or threatened to
issue any order preventing or suspending the use of any Sale Preliminary
Prospectus or Prospectus or has instituted or, to the best of the Company’s
knowledge, threatened to institute any proceedings with respect to such an
order.
2.3 Disclosures in Registration
Statement.
2.3.1 10b-5
Representation. At the time the Registration Statement became
effective and at all times subsequent thereto up to the Closing Date and the
Option Closing Date, if any, the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus do and will contain all material statements that
are required to be stated therein in accordance with the Act and the
Regulations, and will in all material respects conform to the requirements of
the Act and the Regulations; and neither the Registration Statement, the Sale
Preliminary Prospectus nor the Prospectus, nor any amendment or supplement
thereto, on their respective dates, nor the Sale Preliminary Prospectus as of
the Time of Sale (or such subsequent Time of Sale pursuant to Section 2.1.1),
does or will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. When any Preliminary Prospectus or the Sale
Preliminary Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement for the registration of the Securities or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus or the Sale Preliminary Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Act and the Regulations
and did not and will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The representation and warranty made in
this Section 2.3.1 does not apply to statements made or statements omitted in
reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriters by the Representative expressly for use
in the Registration Statement, the Sale Preliminary Prospectus or the Prospectus
or any amendment thereof or supplement thereto.
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2.3.2 Disclosure of
Agreements. The agreements and documents described in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
conform to the descriptions thereof contained therein and there are no
agreements or other documents required to be described in the Registration
Statement, the Sale Preliminary Prospectus or the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by which its
property or business is or may be bound or affected and (i) that is referred to
in the Sale Preliminary Prospectus or the Prospectus, or (ii) is material to the
Company’s business, has been duly and validly executed by the Company, is in
full force and effect and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may be limited
under the Federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the best of
the Company’s knowledge, any other party is in breach or default thereunder and,
to the best of the Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a breach or
default thereunder. To the best of the Company’s knowledge,
performance by the Company of the material provisions of such agreements or
instruments will not result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its assets
or businesses, including, without limitation, those relating to environmental
laws and regulations.
2.3.3 Prior Securities
Transactions. No securities of the Company have been sold by
the Company or by or on behalf of, or for the benefit of, any person or persons
controlling, controlled by, or under common control with the Company since the
Company’s formation, except as disclosed in the Registration
Statement.
2.3.4 Regulations. The
disclosures in the Registration Statement and the Sale Preliminary 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 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.
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2.4.1 No Material Adverse
Change. Since the respective dates as of which information is
given in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, except as otherwise specifically stated therein, (i) there has been
no material adverse change in the condition, financial or otherwise, or business
prospects of the Company, (ii) there have been no material transactions entered
into by the Company, other than as contemplated pursuant to this Agreement, and
(iii) no member of the Company’s management has resigned from any position with
the Company.
2.4.2 Recent Securities
Transactions; Etc. Subsequent to the respective dates as of
which information is given in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed money;
or (ii) declared or paid any dividend or made any other distribution on or in
respect to its equity securities.
2.5 Independent
Accountants. To the Company’s knowledge, Xxxxxxxxx, Xxxx &
Company, P.C. (“RK &
Co.”), whose report is filed with the Commission as part of the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus and
included in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, are independent registered public accountants as required by the Act
and the Regulations. RK & Co. has not, during the periods covered
by the financial statements included in the Registration Statement, the Sale
Preliminary 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 Registration Statement, the
Sale Preliminary 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; such financial statements have
been prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus present fairly the information required to be
stated therein. The Registration Statement, the Sale Preliminary
Prospectus and the Prospectus disclose all material off-balance sheet
transactions, arrangements, obligations (including contingent obligations), and
other relationships of the Company with unconsolidated entities or other persons
that may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues
or expenses. There are no financial statements (historical or pro
forma) that are required to be included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus that are not included as
required.
2.7 Authorized Capital; Options;
Etc. The Company had at the date or dates indicated in the
Sale Preliminary Prospectus and the Prospectus duly authorized, issued and
outstanding capitalization as set forth in the Registration Statement, the Sale
Preliminary Prospectus, and the Prospectus. Based on the assumptions
stated in the Registration Statement, the Sale Preliminary Prospectus, and the
Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or
contemplated by the Registration Statement, the Sale Preliminary Prospectus and
the Prospectus, on the Effective Date and on the Closing Date, there will be no
options, warrants, or other rights to purchase or otherwise acquire any
authorized but unissued shares of Common Stock of the Company or any security
convertible into shares of Common Stock of the Company, or any contracts or
commitments to issue or sell shares of Common Stock or any such options,
warrants, rights or convertible securities.
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2.8 Valid Issuance of
Securities; Etc.
2.8.1 Outstanding
Securities. All issued and outstanding securities of the
Company (including, without limitation, the Placement Warrants) have been duly
authorized and validly issued and are fully paid and non-assessable; the holders
thereof have no rights of rescission with respect thereto, and are not subject
to personal liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any holders of
any security of the Company or similar contractual rights granted by the
Company. The authorized Common Stock and Warrants conform in all
material respects to all statements relating thereto contained in the
Registration Statement, the Sale Preliminary Prospectus and the
Prospectus. The offers and sales of the outstanding securities of the
Company 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.
2.8.2 Securities Sold Pursuant to
this Agreement. The Securities have been duly authorized and,
when issued and paid for, will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability by
reason of being such holders; the Securities are not and will not be subject to
the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to
be taken for the authorization, issuance and sale of the Securities has been
duly and validly taken. The form of certificates for the Securities
conform to the corporate law of the jurisdiction of the Company’s
incorporation. The Securities conform in all material respects to all
statements with respect thereto contained in the Registration Statement, the
Sale Preliminary Prospectus and the Prospectus.
2.8.3 Placement
Warrants The Placement Warrants constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor, the number and type of securities of
the Company called for thereby in accordance with the terms thereof, and such
Placement Warrants are enforceable against the Company in accordance with their
respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under federal and state securities laws; and (iii) that
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought. The shares
of Common Stock issuable upon exercise of the Placement Warrants have been
reserved for issuance upon the exercise of the Placement Warrants and, when
issued in accordance with the terms of the Placement Warrants, will be duly and
validly authorized, validly issued, fully paid and non-assessable, and the
holders thereof are not and will not be subject to personal liability by reason
of being such holders.
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2.8.4 No
Integration. Other than with respect to the Placement
Warrants, neither the Company nor any of its affiliates has, prior to the date
hereof, made any offer or sale of any securities which are required to be or may
be “integrated” pursuant to the Act or the Regulations with the offer and sale
of the Securities pursuant to the Registration Statement.
2.9 Registration Rights of Third
Parties. Except as set forth in the Sale Preliminary
Prospectus and the Prospectus, no holders of any securities of the Company or
any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of
the Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity and Binding Effect
of Agreements. This Agreement, the Warrant Agreement (as
defined in Section 2.21 hereof), the Trust Agreement, the Escrow Agreement (as
defined in Section 2.22.2 hereof) and the Subscription Agreement have been duly
and validly authorized by the Company and constitute the valid and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the Federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.11 No Conflicts,
Etc. The execution, delivery, and performance by the Company
of this Agreement, the Warrant Agreement, the Trust Agreement, the Escrow
Agreement and the Subscription Agreement, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement referred to in Section 2.23 hereof; (ii) result
in any violation of the provisions of the Certificate of Incorporation or the
Bylaws of the Company; or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
2.12 No Defaults;
Violations. No material default exists in the due performance
and observance of any term, covenant or condition of any material license,
contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or
any other agreement or instrument evidencing an obligation for borrowed money,
or any other material agreement or instrument to which the Company is a party or
by which the Company may be bound or to which any of the properties or assets of
the Company is subject. The Company is not in violation of any term
or provision of its Certificate of Incorporation or Bylaws or in violation of
any material franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its properties or
businesses.
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2.13 Corporate Power; Licenses;
Consents.
2.13.1 Conduct of
Business. The Company has all requisite corporate power and
authority, and has all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and
bodies that it needs as of the date hereof to conduct its business as described
in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus. The disclosures in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus concerning the effects of Federal,
state and local regulation on this Offering and the Company’s business purpose
as currently contemplated are correct in all material respects and do not omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
2.13.2 Transactions Contemplated
Herein. The Company has all corporate power and authority to
enter into this Agreement and to carry out the provisions and conditions hereof,
and all 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 Trust Agreement, the Escrow Agreement and the Subscription
Agreement and as contemplated by the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, except with respect to applicable
Federal and state securities laws and the rules and regulations promulgated by
the Financial Industry Regulatory Authority (“FINRA”).
2.14 D&O
Questionnaires. To the best of the Company’s knowledge, all
information contained in the questionnaires (“Questionnaires”)
completed by each of the Company’s stockholders, officers and directors (“Insiders”)
and provided to the Representative 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 Insider to become inaccurate or
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 Insider which has not
been disclosed, that is required to be disclosed, in the Registration Statement,
the Sale Preliminary Prospectus, the Prospectus or the
Questionnaires.
2.16 Good
Standing. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its state of
incorporation, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification, except where
the failure to qualify would not have a material adverse effect on the assets,
business or operations of the Company.
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2.17 Stop
Orders. The Commission has not issued any order preventing or
suspending the use of the Registration Statement, any Preliminary Prospectus,
the Sale Preliminary Prospectus or the Prospectus or any part thereof and has
not threatened to issue any such order.
2.18 Transactions Affecting
Disclosure to FINRA.
2.18.1 Finder’s
Fees. 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 Insider with respect to the sale of the
Securities hereunder or any other arrangements, agreements or understandings of
the Company or any Insider that may affect the Underwriters’ compensation, as
determined by FINRA.
2.18.2 Payments Within Twelve
Months. The Company has not made any direct or indirect
payments (in cash, securities or otherwise) (i) to any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising
capital for the Company or introducing to the Company persons who raised or
provided capital to the Company, (ii) to any FINRA member or (iii) to any person
or entity that has any direct or indirect affiliation or association with any
FINRA member, within the twelve months prior to the Effective Date, other than
payments to the Representative in connection with the Offering.
2.18.3 Use of
Proceeds. None of the net proceeds of the Offering and Private
Placement will be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein and except as may be paid
in connection with a Business Transaction as contemplated by the Sale
Preliminary Prospectus.
2.18.4 Insiders’ FINRA
Affiliation. Except as disclosed in the Registration
Statement, the Sale Preliminary Prospectus, or the Prospectus, no officer,
director or any beneficial owner of the Company’s unregistered securities has
any direct or indirect affiliation or association with any FINRA member, as
determined in accordance with the rules and regulations of FINRA. The
Company will advise the Representative and its counsel if it learns that any
officer, director or owner of at least 5% of the Company’s outstanding Common
Stock is or becomes an affiliate or associated person of a FINRA member
participating in the Offering.
2.19 Foreign Corrupt Practices
Act; Patriot Act.
2.19.1 Foreign Corrupt Practices
Act. Neither the Company nor any of the Insiders 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.
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2.19.2 Patriot
Act. Neither the Company nor any Company affiliates have
violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering
Control Act of 1986, as amended, or (iii) the Uniting and Strengthening of
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations
promulgated under any such law, or any successor law.
2.20 Officers’
Certificate. Any certificate signed by any duly authorized
officer of the Company and delivered to you or to your counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.21 Warrant
Agreement. The Company has entered into a warrant agreement
with respect to the Warrants with CST substantially in the form annexed as
Exhibit 4.4 to the Registration Statement (“Warrant
Agreement”).
2.22 Agreements With
Insiders.
2.22.1 Insider
Letters. The Company has caused to be duly executed legally
binding and enforceable agreements (except (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of any indemnification,
contribution or noncompete provision may be limited under the Federal and state
securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought) annexed as Exhibits 10.4-10.7 to the Registration Statement
(“Insider
Letters”), pursuant to which each of the Insiders of the Company agree to
certain matters, including but not limited to, certain matters described as
being agreed to by them under the “Proposed
Business” section of the Sale Preliminary Prospectus and the
Prospectus.
2.22.2 Escrow
Agreement. The Company, the Sponsor and the Underwriters have
entered into an escrow agreement (“Escrow
Agreement”) with CST (“Escrow
Agent”), substantially in the form annexed as Exhibit 10.2 to the
Registration Statement, whereby (i) the Common Stock owned by the Sponsor (the
“Sponsor’s
Shares”) will be held in escrow by the Escrow Agent, until one year from
the date of consummation of a Business Transaction and (ii) the Placement
Warrants will be held in escrow by the Escrow Agent until thirty (30) days
following the date of consummation of a Business Transaction; provided, however,
that if the Escrow Agent is notified by the Company that the Company is being
liquidated at any time during the applicable Escrow Period (as that term is
defined in the Escrow Agreement), then immediately prior to the effectiveness of
such liquidation, the Escrow Agent shall promptly destroy the certificates
representing the Sponsor’s Shares and the Placement Warrants. During
such escrow period, the Sponsor shall be prohibited from selling or otherwise
transferring such shares (except to permitted transferees as provided therein)
but will retain the right to vote such shares. To the Company’s
knowledge, the Escrow Agreement is enforceable against the Sponsor and will not,
with or without the giving of notice or the lapse of time or both, result in a
breach of, or conflict with any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Sponsor is a
party. The Escrow Agreement shall not be amended, modified or
otherwise changed without the prior written consent of the
Representative.
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2.22.3 No Fiduciary Relationship in
Pricing. The Company acknowledges and agrees that (i) the
purchase and sale of the Units pursuant to this Agreement is an arm’s-length
commercial transaction between the Company and the several Underwriters, (ii) in
connection therewith and with the process leading to such transaction, each
Underwriter is acting solely as a principal and not the agent or fiduciary of
the Company, (iii) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such 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 Underwriters, or any of them, has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process
leading thereto.
2.22.4 Warrant Subscription
Agreement. The Company has entered into the Subscription
Agreement with the Sponsor and the Underwriters with respect to the purchase of
the Placement Warrants. Each of the Underwriters, the Sponsor and the
Company have delivered executed copies of the Subscription Agreement and the
Sponsor and the Underwriters will deliver the purchase price on or before the
Closing Date. Pursuant to the Subscription Agreement, (i) $1,850,000
of the proceeds from the sale of the Placement Warrants will be deposited by the
Company in the Trust Account in accordance with the terms of the Trust Agreement
on or prior to the Closing Date, and (ii) the Sponsor and the Underwriters have
waived any and all rights and claims that they may have to any proceeds, and any
interest thereon, held in the Trust Account in respect of the Placement Warrants
in the event that a Business Transaction is not consummated and the Trust
Account is liquidated in accordance with the terms of the Trust
Agreement.
2.23 Investment Management Trust
Agreement. The Company has entered into the Trust Agreement
with respect to certain proceeds of the Offering substantially in the form
annexed as Exhibit 10.1 to the Registration Statement.
2.24 No Existing Non-Competition
Agreements. No Insider or other employee of the Company is
subject to any non-competition agreement or non-solicitation agreement with any
employer or prior employer which could materially affect his ability to be an
employee, officer and/or director of the Company.
2.25 Investments. The
Company is not and, after giving effect to the Offering and sale of the
Securities and the application of the proceeds thereof as described in the Sale
Preliminary Prospectus and the Prospectus, will not be an “investment company”
as defined in the Investment Company Act of 1940, as amended.
2.26 Subsidiaries. The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
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2.27 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 Registration Statement, the Sale Preliminary Prospectus and the
Prospectus that have not been described as required.
2.28 Data. The
statistical, industry-related and market-related data included in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus are
based on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
2.29 Business
Transactions. The Company does not have any specific Business
Transaction under consideration or contemplation and the Company has not (nor
has anyone on its behalf) contacted any potential target business or had any
discussions, formal or otherwise, with respect to such a
transaction.
2.30 Distribution of Offering
Material By the Company. The Company has not distributed and will not
distribute, prior to the later of the Closing Date and the completion of the
Underwriters’ distribution of the Units, any offering material in connection
with the offering and sale of the Units other than the Sale Preliminary
Prospectus and the Prospectus, in each case as supplemented and
amended.
2.31 No Transfer Taxes.
There are no transfer taxes or other similar fees or charges under federal law
or the laws of any state, or any political subdivision thereof, required to be
paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Units.
2.32 Tax Law Compliance.
The Company has filed all necessary federal, state, local and foreign income and
franchise tax returns in a timely manner and has paid all taxes required to be
paid by the Company and, if due and payable, any related or similar assessment,
fine or penalty levied against the Company, except for any taxes, assessments,
fines or penalties as may be being contested in good faith and by appropriate
proceedings. The Company has made appropriate provisions in the applicable
financial statements referred to in Section 2.6 above in respect of all federal,
state, local and foreign income and franchise taxes for all current or prior
periods as to which the tax liability of the Company has not been finally
determined.
2.33 Ineligible
Issuer. At the time of filing the Registration Statement and
at the date hereof, the Company was and is an “ineligible issuer,” as defined in
Rule 405 under the Securities Act. The Company has not made any offer relating
to the Securities that would constitute an “issuer free writing Prospectus,” as
defined in Rule 433, or that would otherwise constitute a “free writing
Prospectus,” as defined in Rule 405.
3. Covenants of the
Company. The Company covenants and agrees as
follows:
3.1 Amendments to Registration
Statement. The Company will deliver to the Representative,
prior to filing, any amendment or supplement to the Registration Statement or
Prospectus proposed to be filed after the Effective Date and the Company shall
not file any such amendment or supplement to which the Representative shall
reasonably object.
3.2 Federal Securities
Laws.
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3.2.1 Compliance. During
the time when a Prospectus is required to be delivered under the Act, the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities in accordance
with the provisions hereof and the Prospectus. If at any time when a
Sale Preliminary Prospectus or Prospectus relating to the Securities is required
to be delivered under the Act, any event shall have occurred as a result of
which, in the opinion of counsel for the Company or counsel for the
Underwriters, the Sale Preliminary 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 Sale Preliminary
Prospectus or the Prospectus to comply with the Act, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to
Section 3.1 hereof, an appropriate amendment or supplement in accordance with
Section 10 of the Act.
3.2.2 Filing of Final
Prospectus. The Company will file the Prospectus (in form and
substance satisfactory to the Representative) with the Commission pursuant to
the requirements of Rule 424 of the Regulations.
3.2.3 Exchange Act
Registration. The Company will use its best efforts to
maintain the registration of the Securities under the provisions of the Exchange
Act (except in connection with a going-private transaction) for a period of five
years from the Effective Date, or until the Company is required to be liquidated
if earlier, or, in the case of the Warrants, until the Warrants expire and are
no longer exercisable. The Company will not deregister the Securities
under the Exchange Act without the prior written consent of the
Representative.
3.3 Ineligible
Issuer. The Company will not make any offer relating to the
Securities that would constitute an “issuer free writing Prospectus,” as defined
in Rule 433, or that would otherwise constitute a “free writing Prospectus,” as
defined in Rule 405.
3.4 Blue Sky
Filing. The Company will endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction. In each jurisdiction where such
qualification shall be effected, the Company will, unless the Representative
agrees that such action is not at the time necessary or advisable, use all
reasonable efforts to file and make such statements or reports at such times as
are or may be required by the laws of such jurisdiction. The Company
shall pay all filings fees in connection with the qualification of the
securities under the securities laws of such jurisdictions as the Representative
may reasonably designate.
3.5 Delivery to Underwriters of
Preliminary Prospectus, Sale Preliminary Prospectus and
Prospectuses. The Company will deliver to each of the several
Underwriters, without charge, from time to time during the period when the
Prospectus is required to be delivered under the Act or the Exchange Act such
number of copies of each Preliminary Prospectus, Sale Preliminary Prospectus and
Prospectus as such Underwriters may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to you two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and a copy of all original
executed consents of certified experts.
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3.6 Effectiveness and Events
Requiring Notice to the Representative. The Company will use
its best efforts to cause the Registration Statement to remain effective and
will notify the Representative immediately and confirm the notice in writing (i)
of the effectiveness of the Registration Statement and any amendment thereto,
(ii) of the issuance by the Commission of any stop order or of the initiation,
or the threatening, of any proceeding for that purpose, (iii) of the issuance by
any state securities commission of any proceedings for the suspension of the
qualification of the Public Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose,
(iv) of the mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus, (v) of the receipt of
any comments or request for any additional information from the Commission, and
(vi) of the happening of any event during the period described in Section 3.2.3
hereof that, in the judgment of the Company or its counsel, makes any statement
of a material fact made in the Registration Statement, the Sale Preliminary
Prospectus or the Prospectus untrue or that requires the making of any changes
in the Registration Statement, the Sale Preliminary Prospectus or the Prospectus
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Commission or any state
securities commission shall enter a stop order or suspend such qualification at
any time, the Company will make every reasonable effort to obtain promptly the
lifting of such order.
3.7 Review of Quarterly
Financial Statements. Until the earlier of five years from the
Effective Date, or until such earlier time upon which the Company is required to
be liquidated, the Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not audit) the
Company’s financial statements for each of the first three fiscal quarters prior
to the announcement of quarterly financial information, the filing of the
Company’s Form 10-Q quarterly report and the mailing of quarterly financial
information to stockholders.
3.8 Affiliated
Transactions.
3.8.1 Business
Transactions. The Company will not consummate a Business
Transaction with any entity which is affiliated with any Insider unless the
Company obtains an opinion from an independent investment banking firm that is a
member of FINRA that the Business Transaction is fair to the Company’s
stockholders from a financial perspective. No Insider or any
affiliate of an Insider shall receive any fees of any type (other than
reimbursement of ordinary and customary expenses incurred on behalf of the
Company) in connection with any Business Transaction.
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3.8.2 Compensation to
Insiders. Except as set forth above in this Section 3.8, the
Company shall not pay any of the Insiders 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 Transaction; provided that
the Insiders shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with seeking and
consummating a Business Transaction.
3.9 Financial Public Relations
Firm. Promptly after the execution of a definitive agreement
for a Business Transaction, the Company shall retain a financial public
relations firm reasonably acceptable to the Representative for a term to be
agreed on by the Company and the Representative.
3.10 Reports to the
Representative.
3.10.1 Periodic Reports,
Etc. For a period of five years from the Effective Date or
until such earlier time upon which the Company is required to be liquidated, the
Company will furnish to the Representative (Attn: Xxxx Xxxxxx) and its counsel
copies of such financial statements and other periodic and special reports as
the Company from time to time furnishes generally to holders of any class of its
securities, and promptly furnish to the Representative (i) a copy of each
periodic report the Company shall be required to file with the Commission, (ii)
a copy of every press release and every news item and article with respect to
the Company or its affairs which was released by the Company, (iii) a copy of
each Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the
Company, (iv) two (2) copies of each registration statement filed by the Company
with the Commission under the Securities Act, and (v) such additional documents
and information with respect to the Company and the affairs of any future
subsidiaries of the Company as the Representative may from time to time
reasonably request; provided the Representative shall sign, if requested by the
Company, a Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Representative and its counsel in connection with the
Representative’s receipt of such information. Documents filed with
the Commission pursuant to its XXXXX system shall be deemed to have been
delivered to the Representative pursuant to this Section.
3.10.2 Transfer
Sheets. For a period of two years following the Effective Date
or until such earlier time upon which the Company is required to be liquidated,
the Company shall retain CST or another transfer and warrant agent acceptable to
the Representative (“Transfer
Agent”) and will furnish to the Underwriters at the Company’s sole cost
and expense, for a period of one year following the Effective Date, such
transfer sheets of the Company’s securities as the Representative may request,
including the daily and monthly consolidated transfer sheets of the Transfer
Agent and DTC. The Underwriters acknowledge that CST is an acceptable
Transfer Agent.
3.10.3 Secondary Market Trading
Maintenance. Unless the Securities are listed or quoted, as
the case may be, on the New York Stock Exchange, the American Stock Exchange or
quoted on the NASDAQ Global Market or NASDAQ Capital Market, until such earlier
time upon which the Company is required to be liquidated or upon consummation of
a Business Transaction, the Company shall at the beginning of each fiscal
quarter, provide the Representative with a written report detailing those states
in which the Securities may be traded in non-issuer transactions under the Blue
Sky laws of the fifty States.
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3.10.4 Trading
Reports. During such time as any of the Securities are quoted
on the OTC Bulletin Board (or any successor trading market such as
the Bulletin Board Exchange) or the Pink Sheets, LLC (or similar publisher of
quotations) and no other automated quotation system, the Company shall provide
to the Representative, at its expense, such reports published by the OTC
Bulletin Board or the Pink Sheets, LLC relating to price trading of the Public
Securities, as the Representative shall reasonably request.
3.11 Disqualification of Form
S-1. Until the earlier of seven years from the date hereof or
until the Warrants have expired and are no longer exercisable, the Company will
not take any action or actions which may prevent or disqualify the Company’s use
of Form S-1 (or other appropriate form) for the registration of the Warrants
under the Act (except in connection with a going-private
transaction).
3.12 Payment of
Expenses.
3.12.1 General Expenses Related to
the Offering. The Company hereby agrees to pay on each of the
Closing Date and the Option Closing Date, if any, to the extent not paid at
Closing Date, all expenses incident to the performance of the obligations of the
Company under this Agreement, including but not limited to (i) the preparation,
printing, filing and mailing (including the payment of postage with respect to
such mailing) of the Registration Statement, the Preliminary, the Preliminary
Sale and Final Prospectuses and the printing and mailing of this Agreement and
related documents, including the cost of all copies thereof and any amendments
thereof or supplements thereto supplied to the Underwriters in quantities as may
be required by the Underwriters, (ii) the printing, engraving, issuance and
delivery of the Units, the shares of Common Stock and the Warrants included in
the Units, including any transfer or other taxes payable thereon, (iii) filing
fees incurred in registering the Offering with FINRA and legal fees and expenses
incurred in qualifying the Public Securities under state or foreign securities
or Blue Sky laws, (iv) fees, costs and expenses incurred in listing the Company
on the Over the Counter Bulletin Board, (v) fees and disbursements of the
transfer and warrant agent, (vi) the Company’s expenses associated with “due
diligence” and “road show” meetings arranged by the Representative, (vii) the
preparation, binding and delivery of velo-bound transaction “bibles,” in form
and style reasonably satisfactory to the Representative and (viii) all other
actual documented 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 3.12.1. The Company also
agrees that, if requested by the Representative, it will engage and pay up to
$3,000 per initial investigation (for each senior officer of the Company) for an
investigative search firm of the Representative’s choice to conduct an
investigation of the principals of the Company as shall be mutually selected by
the Representative and the Company in addition to such other amounts for
additional investigative work that the Company and the Representative mutually
agree requires further clarification and/or documentation. The
Representative may deduct from the net proceeds of the Offering payable to the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in this Agreement to be paid by the Company to the Representative and
others. If the Offering contemplated by this Agreement is not
consummated by reason of the Company electing not to proceed with the Offering,
the Company shall reimburse the Underwriters in full for their out of pocket
expenses, including, without limitation, its legal fees and disbursements and
“road show” and due diligence expenses.
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3.12.2 Expenses Related to Business
Transaction. The Company further agrees that, in the event the
Representative assists the Company in connection with the consummation of a
proposed Business Transaction, the Company agrees to reimburse the
Representative for all reasonable out-of-pocket expenses, including, but not
limited to, “road-show” and due diligence expenses, provided that the
Representative shall have received the Company’s prior written consent with
respect to any individual expense greater than $1,000.
3.13 Application of Net
Proceeds. The Company will apply the net proceeds from the
Offering and Private Placement received by it in a manner consistent with the
application described under the caption “Use of Proceeds” in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus.
3.14 Delivery of Earnings
Statements to Security Holders. The Company will make
generally available to its security holders as soon as practicable, but not
later than the first day of the fifteenth full calendar month following the
Effective Date, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions of Rule
158(a) under Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
3.15 Notice to
FINRA. In the event any person or entity (regardless of any
FINRA affiliation or association) is engaged to assist the Company in its search
for a merger candidate or to provide any other merger and acquisition services,
the Company will provide the following to FINRA and to the Representative prior
to the consummation of the Business Transaction: (i) complete details
of all services and copies of agreements governing such services; and (ii)
justification as to why the person or entity providing the merger and
acquisition services should not be considered an “underwriter and related
person” with respect to the Company’s initial public offering, as such term is
defined in Rule 5110 of the FINRA Manual. The Company also agrees
that proper disclosure of such arrangement or potential arrangement will be made
in the tender offer documents or proxy statement which the Company will file in
connection with the Business Transaction.
3.16 Stabilization. Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of the Representative) 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
Securities.
3.17 Existing Lock-Up
Agreement. The Company will enforce all existing agreements between the
Company and any of its security holders that prohibit the sale, transfer,
assignment, pledge or hypothecation of any of the Securities in connection with
the Offering. In addition, the Company will direct the Transfer Agent to place
stop transfer restrictions upon any such Securities of the Company that are
bound by such existing “lock-up” agreements for the duration of the periods
contemplated in such agreements.
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3.18 Payment of Contingent Fees
on Business Transaction. Upon the consummation of a Business Transaction,
the Company agrees that it will pay the Contingent Fees out of funds in the
Trust Account delivered to the Company in accordance with Section
1.1.3.
3.19 Internal
Controls. The Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.20 Accountants. Until
the earlier of five years from the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain RK
& Co. or another independent registered public accounting firm reasonably
acceptable to the Representative.
3.21 Form
8-K. The Company shall, on the date hereof, retain its
independent registered public accounting firm to audit the financial statements
of the Company as of the Closing Date (“Audited
Financial Statements”) reflecting the receipt by the Company of the
proceeds of the 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.
3.22 Notice to FINRA. For
a period of ninety days after the date of the Prospectus, in the event any
person or entity (regardless of any FINRA affiliation or association but
excluding attorneys, accountants, engineers, environmental or labor consultants,
investigatory firms, technology consultants and specialists and similar service
providers that are not affiliated with or associated with FINRA and are not
brokers or finders) is engaged, in writing, to assist the Company in its search
for a target business or to provide any other services in connection therewith,
the Company will provide the following to FINRA and the Representative prior to
the consummation of the Business Transaction: (i) complete details of all
services and copies of agreements governing such services (which may be
appropriately redacted to account for privilege or confidentiality concerns);
and (ii) justification as to why the person or entity providing the merger and
acquisition services should not be considered an “underwriter and related
person” with respect to the Offering, as such term is defined in Rule 5110 of
the FINRA Manual. The Company also agrees that, if required by law, 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 Transaction.
3.23 FINRA. The
Company shall advise FINRA if it is aware that any 5% or greater stockholder of
the Company becomes an affiliate or associated person of a FINRA member
participating in the distribution of the Company’s Securities.
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3.24 Corporate
Proceedings. All corporate proceedings and other legal matters
necessary to carry out the provisions of this Agreement and the transactions
contemplated hereby shall done to the reasonable satisfaction to counsel for the
Underwriters.
3.25 Investment
Company. The Company shall cause the proceeds of the Offering
to be held in the Trust Account to be invested only in “government securities”
with specific maturity dates or in money market funds as set forth in the Trust
Agreement and disclosed in the Registration Statement, Sale, Preliminary
Prospectus or Prospectus. The Company will otherwise conduct its
business in a manner so that it will not become subject to the Investment
Company Act of 1940, as amended. Furthermore, once the Company
consummates a Business Transaction, it will be engaged in a business other than
that of investing, reinvesting, owning, holding or trading
securities.
3.26 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 Transaction and
will do all things necessary to comply with Section 00-00-000 and Rule 51-3.4 of
the Colorado Securities Act.
3.27 Amendments to Certificate of
Incorporation.
3.27.1 The
Company covenants and agrees, that prior to its initial Business Transaction it
will not seek to amend or modify its Certificate of Incorporation, including,
but not limited to provisions (A) through (K) of Article Sixth of its
Certificate of Incorporation without the prior written consent of the
Representative.
3.27.2 The
Company acknowledges that the purchasers of the Public Securities in the
Offering shall be deemed to be third party beneficiaries of this Agreement and
specifically this Section 3.27.
3.27.3 The
Representative specifically advises the Company that it will not waive this
Section 3.27 under any circumstances.
3.28 Private Placement
Proceeds. On or prior to the Closing Date, the Company shall
have deposited $1,850,000 of the proceeds from the Private Placement in the
Trust Account or to Ellenoff Xxxxxxxx & Schole LLP who will transfer such
amount to the Trust Account on or prior to the Closing Date and shall provide
Xxxxxx Xxxxxx & Co. with evidence of the same.
4. Conditions of Underwriters’
Obligations. The obligations of the several Underwriters to
purchase and pay for the Units, as provided herein, shall be subject to the
continuing accuracy of the representations and warranties of the Company as of
the date hereof and as of each of the Closing Date and the Option Closing Date,
if any, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof and to the performance by the Company of its
obligations hereunder and to the following conditions:
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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 XxXxxxxxx, counsel to the Underwriters.
4.1.2 FINRA
Clearance. By the Effective Date, the Representative shall
have received clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration
Statement.
4.1.3 No Blue Sky Stop
Orders. No order suspending the sale of the Units in any
jurisdiction designated by you pursuant to Section 3.4 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.
4.1.4 The OTC Bulletin
Board. The Securities shall have been admitted and approved
for quotation on the OTC Bulletin Board.
4.2 Company Counsel
Matters.
4.2.1 Closing Date and Option
Closing Date Opinion of Counsel. On the Closing Date and the
Option Closing Date, if any, the Representative shall have received the
favorable opinion of Ellenoff Xxxxxxxx & Schole LLP, dated the Closing Date
or the Option Closing Date, as the case may be, addressed to the Representative
and in form and substance reasonably satisfactory to XxXxxxxxx, covering the
matters set forth on Appendix A hereto.
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 XxXxxxxxx) of other counsel
reasonably acceptable to XxXxxxxxx, familiar with the applicable laws, and (ii)
as to matters of fact, to the extent they deem proper, on certificates or other
written statements of officers of the Company and officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to the Underwriters’ counsel if
requested. The opinion of counsel for the Company and any opinion
relied upon by such counsel for the Company shall include a statement to the
effect that it may be relied upon by counsel for the Underwriters in its opinion
delivered to the Underwriters.
4.3 Cold Comfort
Letter. At the time this Agreement is executed, and at each of
the Closing Date and the Option Closing Date, if any, you shall have received a
letter, addressed to the Representative and in form and substance satisfactory
in all respects (including the non-material nature of the changes or decreases,
if any, referred to in clause (iii) below) to you and to XxXxxxxxx from RK &
Co. dated, respectively, as of the date of this Agreement and as of the Closing
Date and the Option Closing Date, if any:
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(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during
the periods covered by the financial statements included in the Preliminary
Prospectus, Sale Preliminary 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;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published Regulations thereunder;
(iii) Stating
that, on the basis of their 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, the Sale Preliminary Prospectus and the Prospectus do not comply as
to form in all material respects with the applicable accounting requirements of
the Act and the Regulations or are not fairly presented in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements of the Company included
in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, or (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
March 31, 2010 balance sheet included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, other than as set forth in or
contemplated by the Registration Statement, the Sale Preliminary Prospectus and
the Prospectus or, if there was any decrease, setting forth the amount of such
decrease, and (c) during the period from March 31, 2010 to a specified date not
later than five days prior to the Effective Date, Closing Date or Option Closing
Date, as the case may be, there was any decrease in revenues, net earnings or
net earnings per share of Common Stock, in each case as compared with the
corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement the Sale Preliminary Prospectus and
the Prospectus, or, if there was any such decrease, setting forth the amount of
such decrease;
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(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company (including a break-down of commercial
papers and notes payable to banks);
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not, since the Company’s incorporation, 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 Representative shall have received a certificate of
the Company signed by the Chairman of the Board or the President and the
Secretary or Assistant Secretary of the Company (in their capacities as such),
dated the Closing Date or the Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.5 hereof have been satisfied as of such date and that, as of Closing Date and
the Option Closing Date, as the case may be, the representations and warranties
of the Company set forth in Section 2 hereof are true and correct. In
addition, the Representative will have received such other and further
certificates of officers of the Company (in their capacities as such) as the
Representative may reasonably request.
4.4.2 Secretary’s
Certificate. At each of the Closing Date and the Option Date,
if any, the Representative shall have received a certificate of the Company
signed by the Secretary or Assistant Secretary of the Company, dated the Closing
Date or the Option Date, as the case may be, respectively, certifying (i) that
the Bylaws and Certificate of Incorporation of the Company are true and
complete, have not been modified and are in full force and effect, (ii) that the
resolutions relating to the public offering contemplated by this Agreement are
in full force and effect and have not been modified, (iii) all correspondence
between the Company or its counsel and the Commission, 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.
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4.5 No Material
Changes. Prior to and on each of the Closing Date and the
Option Closing Date, if any, (i) there shall have been no material adverse
change or development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus, (ii)
no action suit or proceeding, at law or in equity, shall have been pending or
threatened against the Company or any Insider before or by any court or Federal
or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except as
set forth in the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus, (iii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission,
and (iv) the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration
Statement, the Sale Preliminary Prospectus nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
4.6 Delivery of
Agreements.
4.6.1 Effective Date
Deliveries. On the Effective Date, the Company
shall have delivered to the Representative executed copies of the Escrow
Agreement, the Trust Agreement, the Warrant Agreement, and all of the Insider
Letters and Subscription Agreement.
4.7 Opinion of Counsel for the
Underwriters. All proceedings taken in connection with the
authorization, issuance or sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to you and to XxXxxxxxx and you
shall have received from such counsel a favorable opinion, dated the Closing
Date and the Option Closing Date, if any, with respect to such of these
proceedings as you may reasonably require. On or prior to the
Effective Date, the Closing Date and the Option Closing Date, as the case may
be, counsel for the Underwriters shall have been furnished such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this Section
4.7, or in order to evidence the accuracy, completeness or satisfaction of any
of the representations, warranties or conditions herein contained.
4.8 Secondary Market Trading and
Standard & Poor’s. Unless the Public Securities are listed
or quoted, as the case may be, on the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Market, or the NASDAQ Capital Market, the
Company shall take such other action as may be reasonably requested by the
Representative to obtain a secondary market trading exemption in such other
states as may be requested by the Representative.
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5. Indemnification.
5.1 Indemnification of
Underwriters.
5.1.1 General. Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by you that
participates in the offer and sale of the Securities (each a “Selected
Dealer”) and each of their respective directors, officers and employees
and each person, if any, who controls any such Underwriter (“controlling
person”) within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all loss, liability, claim, damage and expense
whatsoever as incurred 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, Sale Preliminary Prospectus
or the Prospectus (as from time to time each may be amended and supplemented,
including, but not limited to any information deemed to be a part thereof
pursuant to Rule 430A, Rule 430B or Rule 430C); (ii) any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Securities, including any
“road show” or investor presentations made to investors by the Company (whether
in person or electronically); (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, OTCBB or any securities exchange; or (iv) any
post-effective amendments to the Registration Statement or Prospectus or new
Registration Statement or Prospectus filed by the Company with the Commission,
any state securities commission or agency, OTCBB or any securities exchange, or
the omission or alleged omission from any Preliminary Prospectus, the
Registration Statement, the Sale Preliminary Prospectus or the Prospectus or
subsequent filing by the Company under clause (iv) 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, and to
reimburse each Underwriter, each Selected Dealer and each of their respective
directors, officers and employees and each controlling person, if any, for any
and all expenses (including the fees and disbursements or counsel chosen by
Xxxxxx Xxxxxx & Co.) as such expenses are incurred by such Underwriter, such
Selected Dealer or each of their respective directors, officers and employees or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim damage, liability, expense or
action; provided however, that the foregoing indemnity agreement shall not apply
to any loss, claim, damage, liability or expenses to the extent, but only to the
extent, arising out of or based upon (x) any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company with respect to an
Underwriter by or on behalf of such Underwriter expressly for use in any
Preliminary Prospectus, the Registration Statement, Sale Preliminary Prospectus
or the Prospectus, or any amendment or supplement thereof, or in any
application, as the case may be; (y) the use of the Sale Preliminary Prospectus
or Prospectus in violation of any stop order or other notice received by any
Underwriter indicating the then current Prospectus is not to be used in
connection with the sale of any Securities or (z) an Underwriter otherwise
failing in its prospectus delivery obligations. With respect to any
untrue statement or omission or alleged untrue statement or omission made in the
Preliminary Prospectus, the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter to the extent that any loss,
liability, claim, damage or expense of such Underwriter results from the fact
that a copy of the Prospectus was not given or sent to the person asserting any
such loss, liability, claim or damage at or prior to the written confirmation of
sale of the Securities to such person as required by the Act and the
Regulations, and if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a result of
non-compliance by the Company with its obligations under Section 3.4
hereof. The Company agrees promptly to notify the Representative of
the commencement of any litigation or proceedings against the Company or any of
its officers, directors or controlling persons in connection with the issue and
sale of the Securities or in connection with the Registration Statement, the
Sale Preliminary Prospectus or the Prospectus. The indemnity
agreement set forth in this Section 5.1 shall be in addition to any liabilities
that the Company may otherwise have.
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5.2 Indemnification of the
Company. Each Underwriter, severally and not jointly, agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any and all loss, liability, claim, damage and
expense described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement, the Sale Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or in any application, in
reliance upon, and in strict conformity with, written information furnished to
the Company with respect to such Underwriter by or on behalf of the Underwriter
expressly for use in such Preliminary Prospectus, the Registration Statement,
the Sale Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or in any such application; and to reimburse the Company or any such
director, officer or controlling person, if any, for any and all expenses as
such expenses are reasonably incurred, in connection with investigating,
defending, settling, compromising or paying any such loss, claim damage,
liability, expense or action; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any director, officer or
controlling person thereof, shall be limited to the commissions received by such
Underwriter in connection with the Securities underwritten by it. The
Company hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Preliminary Prospectus, the
Registration Statement, the Sale Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or in any such application, are the statements
set forth in the paragraphs entitled “Pricing of Securities,” “Over Allotment
and Stabilizing Transactions,” and “Commissions and Discounts” under the caption
“Underwriting” in the Prospectus. The indemnity agreement set forth
in this Section 5.2 shall be in addition to any liabilities that each
Underwriter may otherwise have.
5.3 Notifications and Other
Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 5 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5, notify the indemnifying
party in writing of the commencement thereof, but the failure to so notify the
indemnifying party (i) will not relieve it from liability under paragraph 5.1 or
5.2 above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph 5.1 or 5.2 above. In case any
such action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it shall
elect, jointly with all other indemnifying parties similarly notified, by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the provision to the preceding sentence reasonably approved by
the indemnifying party (or by Xxxxxx Xxxxxx & Co. in the case of Section
5.2), representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying
party.
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5.4 Settlements. The
indemnifying party under this Section 5 shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be
withheld, delayed or conditioned unreasonably, but if settled with such consent
or if there is a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party against any loss, claim, damage, liability or
expense by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 5.3 hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (y) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
5.5 Contribution.
5.5.1 Contribution
Rights. In order to provide for just and equitable
contribution under the Act in any case in which (i) any person entitled to
indemnification under this Section 5 makes claim for indemnification pursuant
hereto but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Act, the Exchange
Act or otherwise may be required on the part of any such person in circumstances
for which indemnification is provided under this Section 5, then, and in each
such case, the Company and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and the Underwriters, as
incurred, in such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the initial offering price
appearing thereon and the Company is responsible for the balance; provided,
that, no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters shall contribute in such proportion as
is appropriate to reflect the relative fault of the Company and the Underwriters
in connection with the actions or omissions which resulted in such loss, claim,
damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of the Company and the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. Notwithstanding the provisions of this Section 5.5.1, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the
Securities underwritten by it and distributed to the public. For
purposes of this Section, each director, officer and employee of an Underwriter
or the Company, as applicable, and each person, if any, who controls an
Underwriter or the Company, as applicable, within the meaning of Section 15 of
the Act shall have the same rights to contribution as the Underwriters or the
Company, as applicable.
5.5.2 Contribution
Procedure. Within fifteen days after receipt by any party to
this Agreement (or its representative) of notice of the commencement of any
action, suit or proceeding, such party will, if a claim for contribution in
respect thereof is to be made against another party (“contributing
party”), notify the contributing party of the commencement thereof, but
the omission to so notify the contributing party will not relieve it from any
liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought
against any party, and such party notifies a contributing party or its
representative of the commencement thereof within the aforesaid fifteen days,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing
party. The contribution provisions contained in this Section are
intended to supersede, to the extent permitted by law, any right to contribution
under the Act, the Exchange Act or otherwise available. The
Underwriters’ obligations to contribute pursuant to this Section 5.3 are several
and not joint.
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6. Default by an
Underwriter.
6.1 Default Not Exceeding 10% of
Firm Units or Option Units. If any Underwriter or Underwriters
shall default in its or their obligations to purchase the Firm Units or the
Option Units, if the Over-Allotment Option is exercised, hereunder, and if the
number of the Firm Units or Option Units with respect to which such default
relates does not exceed in the aggregate 10% of the number of Firm Units or
Option Units that all Underwriters have agreed to purchase hereunder, then such
Firm Units or Option Units to which the default relates shall be purchased by
the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
6.2 Default Exceeding 10% of
Firm Units or Option Units. In the event that the default
addressed in Section 6.1 above relates to more than 10% of the Firm Units or
Option Units, you may in your discretion arrange for yourself or for another
party or parties to purchase such Firm Units or Option Units to which such
default relates on the terms contained herein. If within one Business
Day after such default relating to more than 10% of the Firm Units or Option
Units you do not arrange for the purchase of such Firm Units or Option Units,
then the Company shall be entitled to a further period of one Business Day
within which to procure another party or parties satisfactory to you to purchase
said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
will be terminated by you or the Company without liability on the part of the
Company (except as provided in Sections 3.12 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that
if such default occurs with respect to the Option Units, this Agreement will not
terminate as to the Firm Units; and provided further that nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default
hereunder.
6.3 Postponement of Closing
Date. In the event that the Firm Units or Option Units to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or Option
Closing Date for a reasonable period, but not in any event exceeding five
Business Days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement, the Sale Preliminary Prospectus or the Prospectus
or in any other documents and arrangements, and the Company agrees to file
promptly any amendment to the Registration Statement or the Prospectus that in
the opinion of counsel for the Underwriters may thereby be made
necessary. The term “Underwriter”
as used in this Agreement shall include any party substituted under this Section
6 with like effect as if it had originally been a party to this Agreement with
respect to such Securities.
- 29
-
7. [Intentionally
omitted].
8. Additional
Covenants.
8.1 Additional Shares or
Options. The Company hereby agrees that until the consummation
of a Business Transaction, it shall not issue any shares of Common Stock (except
with respect to any exercise of Warrants) or any options or other securities
convertible into Common Stock, or any shares of preferred stock or other
Securities of the Company which participate in any manner in the Trust Account
or which vote as a class with the Common Stock on a Business
Transaction.
8.2 Trust Account Waiver
Acknowledgment. The Company hereby agrees that it will use its
reasonable best efforts prior to engaging in discussions with any person or
entity with which the Company seeks to consummate a Business Transaction (“Target”)
or obtaining the services of any vendor to acknowledge in writing whether
through a letter of intent, memorandum of understanding or other similar
document (and subsequently acknowledges the same in any definitive document
replacing any of the foregoing, that (a) it has read the Prospectus and
understands that the Company has established the Trust Account, initially in an
amount of $50,000,000 (without giving effect to any exercise of the
Over-allotment Option) for the benefit of the public stockholders and that,
except for a portion of the interest earned on the amounts held in the Trust
Account, the Company may disburse monies from the Trust Account only (i) to the
holders of the IPO shares in the event they elect to redeem their IPO Shares in
connection with the consummation of a Business Transaction, (ii) to the holders
of the IPO Shares if the Company fails to consummate a Business Transaction
within 15 months from the date of the Prospectus, or (iii) to the Company after
or concurrently with the consummation of a Business Transaction and (b) for and
in consideration of the Company (i) agreeing to evaluate such Target for
purposes of consummating a Business Transaction with it or (ii) agreeing to
engage the services of the vendor, as the case may be, such Target or vendor
agrees that it does not have any right, title, interest or claim of any kind in
or to any monies in the Trust Account (“Claim”)
and waives any Claim it may have in the future as a result of, or arising out
of, any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Account for any reason whatsoever. The
foregoing letters shall substantially be in the form attached hereto as Exhibits
A and B respectively. The Company may forego obtaining such waivers
only if the Company shall have received the approval of its Chief Executive
Officer and the approving vote or written consent of at least a majority of its
Board of Directors. The term “IPO
Shares” means the shares of Common Stock contained in the Public
Securities.
8.3 Insider
Letters. The Company shall not take any action or omit to take
any action which would cause a breach of any of the Insider Letters and will not
allow any amendments to, or waivers of, such Insider Letters without the prior
written consent of the Representative.
8.4 Certificate of Incorporation
and Bylaws. The Company shall not take any action or omit to
take any action that would cause the Company to be in breach or violation of its
Certificate of Incorporation or Bylaws.
8.5 Acquisition/Liquidation
Procedure. The Company agrees that it will comply with
provisions (A) through (K) of Article Sixth of its Certificate of Incorporation
in connection with the consummation of a Business Transaction or the failure to
consummate a Business Transaction within fifteen (15) months from the date of
the Prospectus.
- 30
-
8.6 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 Transaction, including but not limited to using its
best efforts to prevent any of the Company’s outstanding securities from being
deemed to be a “xxxxx stock” as defined in Rule 3a-51-1 under the Exchange Act
during such period.
8.7 Affiliated
Transactions. The Company shall cause each of the Insiders to
agree that, in order to minimize potential conflicts of interest which may arise
from multiple affiliations, the Insiders will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire an operating business, until the earlier of the
consummation by the Company of a Business Transaction, the liquidation of the
Company or until such time as the Insiders cease to be an officer or director of
the Company, subject to any pre-existing fiduciary or contractual obligations
the Insiders might have.
8.8 Tender Offer Documents,
Proxy Materials and Other Information. The Company shall
provide counsel to the Representative with ten copies of all tender offer
documents or proxy information and all related material filed with the
commission in connection with a Business Transaction concurrently with such
filing with the commission. In addition, the Company shall furnish
any other state in which its initial public offering was registered, such
information as may be requested by such state.
9. Representations and
Agreements to Survive Delivery. Except as the context
otherwise requires, all representations, warranties and agreements contained in
this Agreement shall be deemed to be representations, warranties and agreements
as of the Closing Dates and such representations, warranties and agreements of
the Underwriters and the Company, including the indemnity agreements contained
in Section 5 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, the
Company or any controlling person, and shall survive termination of this
Agreement or the issuance and delivery of the Securities to the several
Underwriters until the earlier of the expiration of any applicable statute of
limitations and the seventh anniversary of the later of the Closing Date or the
Option Closing Date, if any, at which time the representations, warranties and
agreements shall terminate and be of no further force and effect.
10. Effective Date of This
Agreement and Termination Thereof.
10.1 Effective
Date. This Agreement shall become effective on the Effective
Date at the time the Registration Statement is declared effective by the
Commission.
10.2 Termination. You
shall have the right to terminate this Agreement at any time prior to the
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your reasonable opinion will in the immediate
future materially disrupt, general securities markets in the United States; or
(ii) if trading on the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Global Market, the NASDAQ Capital Market or on the 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 American Stock Exchange, the NASDAQ Global
Market, the NASDAQ Capital Market or on the OTC Bulletin Board (or successor
trading market) or by order of the Commission or any other government authority
having jurisdiction, or (iii) if the United States shall have become involved in
a new war or an increase in major hostilities, or (iv) if a banking moratorium
has been declared by a New York State or Federal authority, or (v) if a
moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of the
Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof of
such 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
Representative’s judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by the
Underwriters for the sale of the Securities.
- 31
-
10.3 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
effected by such election or termination or failure to carry out the terms of
this Agreement or any part hereof.
11. Miscellaneous.
11.1 Notices. All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered or telecopied and confirmed
and shall be deemed given when so delivered or telecopied and confirmed or if
mailed, two days after such mailing
If to the
Representative:
Xxxxxx
Xxxxxx & Co. Inc.
000 Xxxxx
Xxxxxx
00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
Xxxxxx
Facsimile:
(000) 000-0000
Copy
to:
XxXxxxxxx
Will & Xxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
Xxxxxxxxxx, Esq.
Facsimile:
(000) 000-0000
- 32
-
If to the
Company:
00xx
Xxxxxx General Acquisition Corp.
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxx
Xxxxx
Facsimile:
(212) _____________
Copy
to:
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Attn: Xxxxxxx
X. Xxxxxxxx, Esq.
Facsimile:
(000) 000-0000
11.2 Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.
11.3 Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
11.4 Entire
Agreement. This Agreement (together with the other agreements
and documents being delivered pursuant to or in connection with this Agreement)
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
11.5 Binding
Effect. This Agreement shall inure solely to the benefit of
and shall be binding upon the Representative, the Underwriters, the Company and
the controlling persons, directors and officers referred to in Section 5 hereof,
and their respective successors, legal representatives and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provisions
herein contained. This agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and said
controlling persons and their respective successors, officers, directors, heirs
and legal representatives, and it is not for the benefit of any other
person. The term “successors and assigns” shall not include a
purchaser, in its capacity as such, of securities from any of the
Underwriters. The Company acknowledges and agrees that: (i) the sale
and issuance of the securities pursuant to this Agreement is an arm’s-length
commercial transaction between the Company and the Underwriters; (ii) in
connection therewith and with the process leading to the offering, the
Underwriters are acting solely as a principal and not the agent or fiduciary of
the Company; (iii) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto, including any negotiation related to the
pricing of the securities; and (iv) the Company has consulted its own legal and
financial advisors to the extent it has deemed appropriate in connection with
this Agreement and the offering.
- 33
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11.6 Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Any such process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 11.1 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys’ fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation
therefor.
11.7 Execution in
Counterparts. This Agreement may be executed in one or more
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. Delivery of a signed counterpart
of this Agreement by fax or email/pdf transmission shall constitute valid and
sufficient delivery thereof.
11.8 Waiver,
Etc. The failure of any of the parties hereto to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Agreement or any provision hereof or the right of any of the parties hereto
to thereafter enforce each and every provision of this Agreement. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions
of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
[Remainder
of page intentionally left blank]
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-
If the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
|
Very
truly yours,
|
|
|
00XX
XXXXXX GENERAL ACQUISITION CORP.
|
|
|
By:__________________________________
|
|
|
Name:
|
|
|
Title:
|
Accepted
on the date first
above
written.
XXXXXX
XXXXXX & CO. INC.
By:________________________
Name:
Title:
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SCHEDULE
I
00XX
XXXXXX GENERAL ACQUISITION CORP.
5,000,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
Xxxxxx
Xxxxxx & Co. Inc.
|
||
|
Ladenburg
Xxxxxxx & Co. Inc.E
|
||
|
I-Bankers
Securities, Inc.
|
||
|
Xxxxxx
& Xxxxxxx, LLC
|
||
|
Maxim
Group LLC
|
- 36
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APPENDIX
A
|
1.
|
The
Company has been duly organized and is validly existing as a corporation
and is in good standing under the laws of its state of
incorporation. The Company is duly qualified and licensed and,
based solely on a good standing certificate, in good standing, as a
foreign corporation in the State of New
York.
|
|
2.
|
All
issued and outstanding securities of the Company (including, without
limitation, the Placement Warrants) have been duly authorized and validly
issued and are fully paid and non-assessable; the holders thereof are not
subject to personal liability by reason of being such holders; and none of
such securities were issued in violation of the preemptive rights of any
stockholder of the Company arising by operation of law or under the
Certificate of Incorporation or Bylaws of the Company. The
offers and sales of the outstanding Common Stock were at all relevant
times either registered under the Act or exempt from such registration
requirements. The authorized and, to such counsel’s knowledge,
outstanding capital stock of the Company is as set forth in the
Prospectus.
|
|
3.
|
The
Securities have been duly authorized and, when issued and paid for, will
be validly issued, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability solely by reason of
being such holders. The Securities are not and will not be
subject to the preemptive rights of any holders of any security of the
Company arising by operation of law or under the Certificate of
Incorporation or Bylaws of the Company. When issued, the
Warrants will constitute valid and binding obligations of the Company to
issue and sell, upon exercise thereof and payment therefor, the number and
type of securities of the Company called for thereby and such Warrants are
enforceable against the Company in accordance with their respective terms,
except (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (b) as enforceability of any indemnification or contribution
provision may be limited under the Federal and state securities laws, and
(c) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. The certificates representing the Securities are in
due and proper form.
|
|
4.
|
The
Placement Warrants constitute valid and binding obligations of the Company
to issue and sell, upon exercise thereof and payment therefor, the number
and type of securities of the Company called for thereby, and such
Placement Warrants are enforceable against the Company in accordance with
their respective terms, except: (i) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under federal and state
securities laws; and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. A sufficient number of
shares of Common Stock have been reserved for issuance upon exercise of
the Placement Warrants. The shares of Common Stock underlying
the Placement Warrants will, upon exercise of the Warrants and payment of
the exercise price thereof, be duly and validly issued, fully paid and
non-assessable.
|
- 37
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|
5.
|
This
Agreement, the Warrant Agreement, the Trust Agreement, the Escrow
Agreement and the Subscription Agreement have each been duly and validly
authorized 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 the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
|
|
6.
|
The
execution, delivery and performance of this Agreement, the Warrant
Agreement, the Escrow Agreement, the Trust Agreement and the Subscription
Agreement and compliance by the Company with the terms and provisions
thereof and the consummation of the transactions contemplated thereby, and
the issuance and sale of the Securities, do not and will not, with or
without the giving of notice or the lapse of time, or both, (a) to such
counsel’s knowledge, conflict with, or result in a breach of, any of the
terms or provisions of, or constitute a default under, or result in the
creation or modification of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company pursuant
to the terms of, any mortgage, deed of trust, note, indenture, loan,
contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the
provisions of the Certificate of Incorporation or the Bylaws of the
Company, or (c) to such counsel’s knowledge, violate any United States
statute or any judgment, order or decree, rule or regulation applicable to
the Company of any court, United States Federal, state or other regulatory
authority or other governmental body having jurisdiction over the Company,
its properties or assets.
|
|
7.
|
The
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
and any post-effective amendments or supplements thereto (other than the
financial statements included therein, as to which no opinion need be
rendered) each as of their respective dates appeared on their face to
comply as to form in all material respects with the requirements of the
Act and Regulations. The Securities and all other securities
issued or issuable by the Company conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus. The descriptions in the Registration Statement, the
Sale Preliminary Prospectus and in the Prospectus, insofar as such
statements constitute a summary of statutes, legal matters, contracts,
documents or proceedings referred to therein, fairly present in all
material respects the information required to be shown with respect to
such statutes, legal matters, contracts, documents and proceedings, and
such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Sale Preliminary Prospectus
and the Prospectus that are not described in the Registration Statement,
the Sale Preliminary Prospectus or the Prospectus or included as exhibits
to the Registration Statement that are not described or included as
required.
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|
8.
|
Based
solely on a notice of effectiveness received from the SEC or a telephone
conversation with SEC staff, 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.
|
|
9.
|
The
Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus, will not be, an “investment
company” as defined in the Investment Company Act of 1940, as
amended.
|
|
10.
|
To
such counsel’s knowledge, there is no action, suit or proceeding before or
by any court of governmental agency or body, domestic or foreign, now
pending, or threatened against the Company that is required to be
described in the Registration
Statement.
|
The
opinion of counsel shall further include a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters and the independent registered public
accounting firm of the Company, at which conferences the contents of the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
contained therein and related matters were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus contained therein
(except as otherwise set forth in the foregoing opinion), solely on the basis of
the foregoing without independent check and verification, no facts have come to
the attention of such counsel which lead them to believe that the Registration
Statement or any amendment thereto, at the time the Registration Statement or
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or the Prospectus or any amendment or
supplement thereto, at the time they were filed pursuant to Rule 424(b) or at
the date of such counsel’s opinion, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statement therein, in light of the circumstances under
which they were made, not misleading (except that such counsel need express no
opinion with respect to the financial information and
statistical data and information included in the Registration Statement, the
Sale Preliminary Prospectus or the Prospectus).
- 39
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EXHIBIT
A
FORM
XX XXXXXX XXXXXXXX XXXXXX
00xx
Xxxxxx General Acquisition Corp.
Gentlemen:
Reference
is made to the Final Prospectus of 57th Street General Acquisition Corp. (the
“Company”),
dated ____________, 2010 (the “Prospectus”). Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in Prospectus.
We have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $49,750,000 for the benefit of the
Public Stockholders and the Underwriters of the Company’s initial public
offering (the “Underwriters”)
and that, except for a portion of the interest earned on the amounts held in the
Trust Account, the Company may disburse monies from the Trust Account only: (i)
to the Public Stockholders in the event they elect to redeem their public shares
in connection with the consummation of a Business Transaction, (ii) to the
Public Stockholders if the Company fails to consummate a Business Transaction
within 15 months from the date of the Prospectus or (iii) to the Company after
or concurrently with the consummation of a Business Transaction.
For and
in consideration of the Company agreeing to evaluate the undersigned for
purposes of consummating a Business Transaction with it, the undersigned hereby
agrees that it does not have any right, title, interest or claim of any kind in
or to any monies in the Trust Account (each, a “Claim”)
and hereby waives any Claim it may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with the Company and will not
seek recourse against the Trust Account for any reason whatsoever.
___________________________________
Print
Name of Target Business
___________________________________
Authorized
Signature of Target Business
- 40
-
EXHIBIT
B
FORM
OF VENDOR LETTER
Gentlemen:
Reference
is made to the Final Prospectus of 57th Street General Acquisition Corp. (the
“Company”),
dated ____________, 2010 (the “Prospectus”). Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in Prospectus.
We have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $49,750,000 for the benefit of the
Public Stockholders and the Underwriters of the Company’s initial public
offering (the “Underwriters”)
and that, except for a portion of the interest earned on the amounts held in the
Trust Account, the Company may disburse monies from the Trust Account only: (i)
to the Public Stockholders in the event they elect to redeem their public shares
in connection with the consummation of a Business Transaction, (ii) to the
Public Stockholders if the Company fails to consummate a Business Transaction
within 15 months from the date of the Prospectus or (iii) to the Company after
or concurrently with the consummation of a Business Transaction.
For and
in consideration of the Company agreeing to engage the services of the
undersigned, the undersigned hereby agrees that it does not have any right,
title, interest or claim of any kind in or to any monies in the Trust Account
(each, a “Claim”)
and hereby waives any Claim it may have in the future as a result of, or arising
out of, any services provided to the Company and will not seek recourse against
the Trust Account for any reason whatsoever.
_______________________________
Print
Name of Vendor
_______________________________
Authorized
Signature of Vendor
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