EXHIBIT 10.13
[OMNIBUS FORM OF INSIDER LETTER AGREEMENT]
[_______] [__], 2006
Xxxxxxxx XxXxxxx Acquisition Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Deutsche Bank Securities Inc.
As representative of the
several underwriters
c/o Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: INITIAL PUBLIC OFFERING
Ladies and Gentlemen:
This letter is being delivered to you, as representative (the
"Representative") of the several underwriters (the "Underwriters"), in
accordance with the Underwriting Agreement (the "Underwriting Agreement")
entered into by and between Xxxxxxxx XxXxxxx Acquisition Corporation, a Delaware
corporation (the "Company"), and the Underwriters, relating to an underwritten
initial public offering (the "IPO") of the Company's units (the "Units"), each
comprised of one share of the Company's common stock, par value $0.0001 per
share (the "Common Stock"), and one warrant, which is exercisable for one share
of Common Stock (a "Warrant"). Certain capitalized terms used herein are defined
in paragraph 12 hereof.
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the IPO, and in recognition of the
benefit that such IPO will confer upon the undersigned as a stockholder of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees with
the Company and the Underwriters as follows:
1. If the Company solicits approval of its stockholders of a Business
Combination, the undersigned will vote all Insider Shares owned by the
undersigned in accordance with the majority of the votes cast by the holders of
the IPO Shares. For clarity, the undersigned may vote IPO Shares (including such
shares purchased by the undersigned in the aftermarket) owned by the undersigned
in any manner that the undersigned chooses.
2. (i) [In the event that the Company fails to consummate a Business
Combination within (a) 18 months after the consummation of the IPO, unless a
letter of intent, agreement in principle or definitive agreement has been
executed with respect to a Business Combination within such 18 month period, (an
18-Month Execution Failure") or (b) 24 months after the consummation of the IPO,
if a letter of intent, agreement in principle or definitive agreement has been
executed with respect to a Business Combination within 18 months from the
consummation
of the IPO but the Business Combination has not been consummated within such 18
month period ("24-Month Transaction Failure") (the date of the first such
failure to occur being the "Transaction Failure Date"), the undersigned will
take all reasonable actions within the undersigned's power and as permitted
under applicable laws to (1) within a reasonable time prior to the expiration of
such 18 or 24 month period, as the case may be, adopt and vote to recommend to
the Company's stockholders a specific plan of dissolution and liquidation to be
included in a proxy statement to seek stockholder approval for such plan of
dissolution and liquidation in the event that the Company fails to so consummate
a Business Combination within such 18- or 24-month period, as the case may be,
(2) cause to be prepared a preliminary proxy statement that sets forth such plan
of dissolution and liquidation and recommends that the Company's stockholders
approve such plan, (3) not later than fifteen (15) days after the expiration of
such 18 or 24 month period, as the case may be, adopt a resolution pursuant to
Section 275(a) of the Delaware General Corporation Law finding the dissolution
of the Company advisable and provide such notices to the Company's stockholders
as are required by Section 275(a) as promptly thereafter as possible and (4)
take such other actions in connection with the liquidation of the Company as are
required by the Company's certificate of incorporation and bylaws.](1) In the
event of an 18-Month Execution Failure or 24-Month Transaction Failure, as the
case may be, the undersigned will take all reasonable actions within the
undersigned's power and as permitted under applicable laws to (x) cause the
preliminary proxy statement setting forth the specific plan of dissolution and
liquidation approved by the Company's board of directors to be filed with the
Securities and Exchange Commission (the "SEC") promptly after the expiration of
the 18- or 24-month period, as the case may be, AND (y) cause a meeting of the
Company's stockholders to consider such plan of dissolution and liquidation to
be held. The undersigned will vote all shares of Common Stock, including Insider
Shares and IPO Shares, owned directly or indirectly by the undersigned in favor
of such plan of dissolution and liquidation.
(ii) In the event that the Company's stockholders approve a plan of
dissolution and liquidation in connection with an 18-Month Execution Failure or
24-Month Transaction Failure, as the case may be, the undersigned will take all
reasonable actions within the undersigned's power and as permitted under
applicable laws to (i) cause the Trust Fund to be liquidated and, after paying
or reserving for payment the Company's liabilities, distributed to the holders
of the IPO Shares as soon as practicable but in no event later than 60 (sixty)
calendar days after the Transaction Failure Date and (ii) cause the Company to
dissolve and liquidate as soon as practicable (the earliest date on which the
conditions in clauses (i) and (ii) are both satisfied being the "Liquidation
Date"). The undersigned hereby waives any and all right, title, interest or
claim of any kind in or to any distributions of the Trust Fund as a result of
such distribution, or to any other amounts distributed in connection with a
liquidating distribution of the Company including with respect to the
undersigned's Insider Shares but other than with respect to any IPO Shares owned
by the undersigned ("Claim") and hereby waives any Claim the undersigned may
have in the future as a result of, or arising out of, any contracts or
agreements with the Company and will not seek recourse against the Trust Fund
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(1) This section of the agreement will appear only in the agreements executed
by the directors of the Company.
for any reason whatsoever. The undersigned hereby agrees that the Company shall
be entitled to reimbursement from the undersigned for any distribution of the
Trust Fund, or any other amounts distributed by the Company in connection with a
liquidating distribution, received by the undersigned in respect of such
person's Insider Shares.
3. [INTENTIONALLY OMITTED.](2) [Subsequent to the Transaction Failure Date,
the undersigned agrees to indemnify and hold harmless the Company, against any
and all loss, liability, claims, damage and expense whatsoever (including, but
not limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or
threatened, or any claim whatsoever) to which the Company may become subject as
a result of (i) any claim by any vendor or service provider who is owed money by
the Company for services rendered or products sold to the Company, or (ii) any
claim by any acquisition target, but in each case only to the extent (a) such
vendor, service provider, or acquisition target has not executed a waiver of
rights or claims to the Trust Fund, and (b) necessary to ensure that such loss,
liability, claim, damage or expense does not reduce the amount in the Trust Fund
(or, in the event that such claim arises after the distribution of the Trust
Fund, to the extent necessary to ensure that the Company's former stockholders
are not liable for any amount of such loss, liability, claim, damage or
expense). For avoidance of doubt, the foregoing indemnification obligation of
the undersigned shall not apply to claims under the Company's indemnification of
the underwriters of the offering against certain liabilities, including
liabilities under the Securities Act of 1933. In the event the Company's assets
held outside the Trust Fund are insufficient to pay the costs and expenses of
dissolution and liquidation of the Company, the undersigned agrees to indemnify
and hold harmless the Company against such additional costs and expenses of
dissolution and liquidation, excluding any special, indirect or consequential
costs or expenses, such as litigation pertaining to the Company's dissolution
and liquidation.](3)
4. In order to minimize potential conflicts of interest which may arise
from multiple affiliations, the undersigned agrees to present to the Company for
its consideration, prior to presentation to any other person or entity, any
business opportunity that may be reasonably required to be presented to the
Company under Delaware law, until the earlier of a Business Combination,
Liquidation Date, and such time as the undersigned ceases to be an officer or
director of the Company; PROVIDED, HOWEVER, that the presentation of such
opportunities to the Company shall in each case be subject to any pre-existing
fiduciary and contractual obligation of the undersigned.
5. The undersigned acknowledges and agrees that the Company will not
consummate any Business Combination with an entity that is affiliated with any
Insider or any of their respective affiliates unless the Company obtains an
opinion from an independent investment banking firm that the Business
Combination is fair to the Company's stockholders from a financial point of
view.
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(2) This section of the agreement will appear in the agreements other than the
one executed by Xxxxx X. XxXxxxx.
(3) This section of the agreement will appear only in the agreement executed by
Xxxxx X. XxXxxxx.
6. Neither the undersigned, any member of the family of the undersigned,
nor any affiliate of the undersigned will be entitled to receive, and will not
accept, from the Company any compensation, including payments to related parties
of the existing stockholders for performing due diligence or for services
rendered to the Company prior to or in connection with the consummation of the
Business Combination, PROVIDED that commencing on the effective date (the
"Effective Date") of the registration statement (the "Registration Statement")
relating to the IPO, Xxxxxxxx XxXxxxx Capital, LLC ("Related Party") shall be
allowed to charge the Company $10,000 per month to compensate it for the
Company's use of Related Party's offices, utilities and personnel. The
undersigned shall also be entitled to reimbursement from the Company for the
undersigned's reasonable out-of-pocket expenses incurred in connection with
seeking and consummating a Business Combination, provided that such
reimbursement has been approved by the board of directors of the Company.
7. Neither the undersigned, any member of the family of the undersigned,
nor any affiliate of the undersigned will be entitled to receive, or accept, a
finder's fee or any other compensation from the Company or any other entity or
person in the event the undersigned, any member of the family of the undersigned
or any affiliate of the undersigned originates a Business Combination except as
described in the Registration Statement.
8. [INTENTIONALLY OMITTED.](4) [The undersigned hereby agrees that, on a
date that is within the five-day period following the date that is 30 days after
the date of the Underwriting Agreement or, if earlier, the date the
Representative terminates the Over-allotment Option pursuant to the terms of the
Underwriting Agreement, the undersigned will promptly sell to the Company, and
the Company shall repurchase from the undersigned, at the price per share of
$0.000618 in cash, the number of shares of Common Stock determined by
multiplying (i) 421,875 by (ii) a fraction, the numerator of which is (A)
1,687,500 minus (B) the number of shares of Common Stock purchased by the
Underwriters upon the exercise of their Over-allotment Option (as defined in the
Underwriting Agreement) and the denominator of which is 1,687,500.](5)
9. The undersigned agrees to serve as [President, Chairman and Chief
Executive Officer, Chief Financial Officer, Chief Administrative Officer,
or as a member of the Board of Directors of the Company](6) until the earlier
of the consummation by the Company of a Business Combination or the
Liquidation Date; PROVIDED, however, that nothing herein shall be construed
as providing a right of the undersigned to maintain any position if removed
by proper corporate action. The undersigned's biographical information
furnished to the Company and the Representative and attached hereto as
Exhibit A is true and accurate in all material respects, does not omit any
material information with respect to the undersigned's background and
contains all of the information required to be disclosed pursuant to Section
401 of Regulation S-K, promulgated under the Securities Act of 1933. The
undersigned's completed questionnaires furnished to the Company and the
Representative and attached hereto as Exhibit B are true and accurate in all
material respects. The undersigned represents and warrants that:
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(4) This section of the agreement will appear in the agreements other than the
one executed by Xxxxx X. XxXxxxx.
(5) This section of the agreement will appear only in the agreement executed by
Xxxxx X. XxXxxxx.
(6) This section will reflect the relationship of the insider to the company,
as applicable.
(a) the undersigned is not subject to or a respondent in any legal
action for, any injunction, cease-and-desist order or order or stipulation to
desist or refrain from any act or practice relating to the offering of
securities in any jurisdiction;
(b) the undersigned has never been convicted of or pleaded guilty to
any crime (i) involving any fraud or (ii) relating to any financial transaction
or handling of funds of another person, or (iii) pertaining to any dealings in
any securities and the undersigned is not currently a defendant in any such
criminal proceeding; and
(c) the undersigned has never been suspended or expelled from
membership in any securities or commodities exchange or association or had a
securities or commodities license or registrations denied, suspended or revoked.
10. The undersigned shall not (x) sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, or, except as provided in that
certain Registration Rights Agreement dated as of the date hereof pertaining to
the Insider Shares of the undersigned, file (or participate in the filing of) a
registration statement with the SEC in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder with
respect to, any Insider Shares, (y) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Insider Shares, whether any such transaction is to be settled by
delivery of shares of Common Stock, in cash or otherwise, or (z) publicly
announce an intention to effect any transaction specified in clause (x) or (y)
until the first anniversary of the consummation of an initial Business
Combination (the "Lock-Up Period"). Notwithstanding the foregoing, the
undersigned may transfer the undersigned's Insider Shares during the applicable
Lock-Up Period (i) by gift to a member of the undersigned's immediate family or
to a trust, the beneficiary of which is a member of the undersigned's immediate
family, an affiliate of the undersigned or to a charitable organization, (ii) by
virtue of the laws of descent and distribution upon death of the undersigned,
(iii) to other officers or directors of the Company, (iv) pursuant to a
qualified domestic relations order, or (v) in the event of a dissolution of the
Company prior to a Business Combination or the consummation of a liquidation,
merger, capital stock exchange, stock purchase, asset acquisition or other
similar transaction which results in all the Company's stockholders having the
right to exchange their shares of Common Stock for cash, securities or other
property subsequent to the Company's consummating a Business Combination with a
target business; PROVIDED, HOWEVER, that the permissive transfers pursuant to
clauses (i) -- (iv) may be implemented only upon the respective transferee's
written agreement to be bound by the terms and conditions of this Agreement.
During the applicable Lock-Up Period, the undersigned shall not grant a security
interest in the undersigned's Insider Shares.
11. The undersigned has full right and power, without violating any
agreement by which he is bound (including, without limitation, any
non-competition or non-solicitation agreement with any employer or former
employer), to enter into this letter agreement, serve as [President, Chairman
and Chief Executive Officer, Chief Financial Officer, Chief Administrative
Officer or as a member of the Board of Directors of the Company](7) and hereby
consents to being named in the registration statement as such.
12. As used herein, (i) a "Business Combination" shall mean the initial
acquisition, or acquisition of control, of one or more assets or operating
businesses in the telecommunications and media industries selected by the
Company through a merger, capital stock exchange, asset or stock acquisition or
other similar business combination; (ii) "Insiders" shall mean all officers,
directors and stockholders of the Company immediately prior to the IPO; (iii)
"Insider Shares" shall mean all of the shares of Common Stock owned by an
Insider prior to the IPO (and shall include any shares of Common Stock issued as
dividends with respect to such shares); (iv) "IPO Shares" shall mean the shares
of Common Stock issued in the Company's IPO; and (v) "Trust Fund" shall mean the
Trust Account established under that certain Investment Management Trust
Agreement, dated as of the date hereof, between the Company and Continental
Stock Transfer & Trust Company.
13. The undersigned acknowledges and understands that the Company will rely
upon the agreements, representations and warranties set forth herein in
proceeding with the IPO. Nothing contained herein shall be deemed to render any
Underwriter a representative of, or a fiduciary with respect to, the Company,
its stockholders, or any creditor or vendor of the Company with respect to the
subject matter hereof.
14. This letter agreement shall be binding on the undersigned and such
person's respective successors, heirs, personal representatives and assigns.
This letter agreement shall terminate on the earlier of (i) the consummation of
the Business Combination and (ii) the Liquidation Date; provided that such
termination shall not relieve the undersigned from liability for any breach of
this agreement prior to its termination[, and provided further that Section 3 of
this agreement shall survive a termination pursuant to clause (ii)](8).
15. This letter agreement shall be governed by and interpreted and
construed in accordance with the laws of the State of New York applicable to
contracts formed and to be performed entirely within the State of New York,
without regard to the conflicts of law provisions thereof to the extent such
principles or rules would require or permit the application of the laws of
another jurisdiction.
16. No term or provision of this letter agreement may be amended, changed,
waived, altered or modified except by written instrument executed and delivered
by the party against whom such amendment, change, waiver, alteration or
modification is to be enforced.
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(7) This section will reflect the relationship of the insider to the company,
as applicable.
(8) This provision of the agreement will appear only in the agreement executed
by Xxxxx X. XxXxxxx.
________________________________________
[Name of Current Stockholder]
Accepted and agreed:
XXXXXXXX XXXXXXX ACQUISITION CORPORATION
By: _________________________________
Name: Xxxxx X. XxXxxxx
Title: President and Chief Executive Officer
DEUTSCHE BANK SECURITIES INC.
By: _________________________________
Name:
Its:
EXHIBIT A
BIOGRAPHICAL INFORMATION
EXHIBIT B
QUESTIONNAIRES FURNISHED TO THE STOCKHOLDER
