Corporate Acquirers, Inc. New York, NY 10022
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
September
27, 2007
G.
Xxxxxxx Xxxxxx
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Dear
Xx.
Xxxxxx:
We
are
pleased to accept the offer you (the “Subscriber”)
have
made to purchase 1,625,000 shares (the “Shares”)
of
common stock, $0.0001 par value per share (the “Common
Stock”),
up to
195,000 of which Shares are subject to complete or partial forfeiture (the
“Forfeiture”)
to the
extent the underwriters’ of the initial public offering of Corporate Acquirers,
Inc., a Delaware corporation (the “Company”)
do not
exercise their over-allotment option. The terms on which the Company is willing
to sell the Shares to the Subscriber, and the Company and the Subscriber’s
agreements regarding such Shares, are as follows:
1.
Purchase
of Shares.
For the
aggregate sum of $13,000.00 (the “Purchase
Price”),
which
the Company acknowledges receiving in cash, the Company hereby sells and issues
the Shares to the Subscriber, and the Subscriber hereby purchases the Shares
from the Company, on the terms and subject to the conditions set forth in this
Agreement. Concurrently with the Subscriber’s execution of this Agreement, the
Company is delivering to the Subscriber a certificate registered in the
Subscriber’s name representing the Shares, receipt of which the Subscriber
hereby acknowledges.
2. The
Subscriber’s Representations, Warranties and Agreements.
To
induce the Company to issue the Shares to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company as
follows:
2.1. No
Government Recommendation or Approval.
The
Subscriber understands that no United States federal or state agency or similar
agency of any other country, has passed upon or made any recommendation or
endorsement of the offering of the Shares.
2.2. Experience,
Financial Capability and Suitability.
The
Subscriber is sufficiently experienced in financial and business matters to
be
capable of evaluating the merits and risks of this investment and to make an
informed decision relating thereto. The Subscriber is aware his investment
in
the Company is a speculative investment that has limited liquidity, because
there may never be an established market for the Company’s securities. The
Subscriber has the financial capability for making the investment and the
investment is a suitable one for the Subscriber. The Subscriber can, without
impairing his financial condition, hold the Shares for an indefinite period
of
time and can afford a complete loss of the investment. The Subscriber
acknowledges that the Company has urged the Subscriber to seek independent
advice from professional advisors relating to the suitability of an investment
in the Company and in connection with this Agreement, and that the Subscriber
has sought and received such independent professional advice with respect to
such investment and this Agreement or, after careful consideration, the
Subscriber has determined to waive his right to seek and/or receive such
independent professional advice.
2.3. Access
to Information.
Prior
to the execution of this Agreement, the Subscriber has had the opportunity
to
ask questions of and receive answers from representatives of the Company
concerning an investment in the Company, as well as the finances, operations,
business and prospects of the Company, and the opportunity to obtain additional
information to verify the accuracy of all information so obtained.
2.4. Regulation
D Offering.
Subscriber represents that he is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”) and acknowledges the sale contemplated hereby is
being made in reliance on a private placement exemption to “Accredited
Investors” within the meaning of Section 501(a) of Regulation D under the
Securities Act or similar exemptions under state law; and, accordingly, such
securities will be “restricted securities” within the meaning of Rule 144(a)(3)
under the Securities Act, and therefore may not be offered, pledged or sold
by
Subscriber, directly or indirectly, in the United States without registration
under United States federal and state securities laws and Subscriber understands
the certificates representing such securities will contain a legend in respect
of such restrictions.
2.5. Investment
Purposes.
Subscriber is purchasing the Shares solely for investment purposes, for the
Subscriber’s own account and not for the account of benefit of any U.S. Person,
and not with a view towards the distribution thereof and Subscriber has no
present arrangement to sell the Shares to or through any person or entity.
Subscriber shall not engage in hedging transactions with regard to the Shares
unless in compliance with the Securities Act.
2.6. Restrictions
on Transfer.
Subscriber acknowledges and understands the Shares
are being offered in a transaction not involving a public offering within the
meaning of the Securities Act. The Shares have not been registered under the
Securities Act, and, if in the future the Subscriber decides to offer, resell,
pledge or otherwise transfer the Shares, such Shares may be offered, resold,
pledged or otherwise transferred only (A) pursuant to an effective registration
statement filed under the Securities Act, (B) pursuant to an exemption from
registration under Rule 144 promulgated under the Securities Act, if available,
or (C) pursuant to any other exemption from the registration requirements of
the
Securities Act, and in each case in accordance with any applicable securities
laws of any state or any other jurisdiction. Subscriber agrees that if any
transfer of its Shares or any interest therein is proposed to be made, as a
condition precedent to any such transfer, Subscriber may be required to deliver
to the Company an opinion of counsel satisfactory to the Company. Absent
registration or another available exemption from registration, the Subscriber
agrees that he will not resell the Shares. Subscriber further understands and
acknowledges the Securities and Exchange Commission (the “SEC”) has taken the
position the Subscriber would be considered a promoter under the Securities
Act
and that promoters or affiliates of a blank check company and their transferees,
both before and after a business combination, would act as “underwriters” under
the Securities Act when reselling the securities of that blank check company.
Accordingly, Rule 144 promulgated under the Securities Act will not be available
to the Subscriber for the resale of the Shares despite technical compliance
with
the requirements of Rule 144, in which event the resale transactions would
need
to be made through a registered offering.
2
2.7 Pro-rata Forfeiture.
Subscriber hereby acknowledges and understands that 195,000
of the 1,625,000 Shares being offered herein are subject to partial or complete
forfeiture in the event that the underwriters’ over-allotment option is not
exercised, either partially or fully, as set forth in Section 3.4
herein.
3. Forfeiture
of Shares; Escrow of Shares.
3.1. Failure
to Consummate Business Combination.
All of
the Shares initially shall be subject to forfeiture to the Company in accordance
with this Section 3. The Shares shall be forfeited to the Company in the event
the Company does not consummate a Business Combination, as such term is defined
in the Company’s registration statement on Form S-1 under the Securities Act
(the “Registration
Statement”),
with
respect the Company’s initial public offering (the “IPO”)
of its
securities, within 24 months from the consummation of the IPO.
3.2. Termination
of Rights as Stockholder.
If the
Shares are forfeited in accordance with this Section 3, then after such time
the
Subscriber (or successor in interest), shall no longer have any rights as a
holder of such Shares, and the Company shall take such action as is appropriate
to cancel such Shares. In addition, the Subscriber hereby irrevocably grants
the
Company a limited power of attorney for the purpose of effectuating the
foregoing.
3.3. Escrow.
Upon
consummation of the IPO, the Subscriber, and his designees, shall enter into
a
securities escrow agreement (the “Escrow
Agreement”)
with
American Stock Transfer & Trust Company (the “Escrow
Agent”),
whereby the Shares shall be held in escrow until one year following the
consummation of a Business Combination, unless the Company engages in a
transaction after the consummation of the initial Business Combination that
results in all of the stockholders of the combined entity having the right
to
exchange their shares of common stock for cash, securities or other property.
As
used herein, “Business Combination” shall mean an acquisition by the Company by
merger, capital stock exchange, exchangeable share transaction, joint venture,
asset or stock acquisition, or other similar business combination of one or
more
operating businesses.
3.4 Pro-rata
Forfeiture. If
the
underwriters of the IPO fail to exercise any portion or all of the
over-allotment option granted to them within 30-days of the effective date
of
the Company’s Registration Statement, then Subscriber shall automatically
forfeit up to 195,000 shares of Common Stock purchased hereunder, such that
Subscriber, together with the officers, directors and sponsor of the Company,
shall, in the aggregate, beneficially own no greater than 20% of the Common
Stock of the Company issued and outstanding pursuant to this Agreement and
the
Company’s IPO (but not including shares of Common Stock underlying warrants).
4. Waiver
of Liquidation Distributions; Redemption Rights.
In
connection with the Shares purchased pursuant to this Agreement and any other
Company securities purchased on a private placement basis, the Subscriber hereby
waives any and all right, title, interest or claim of any kind in or to any
distributions by the Company from the Trust Account, as such term is defined
in
that certain Investment Management Trust Agreement, dated as of _____, by and
between the Company and the trustee thereunder) in the event of a liquidation
of
the Company upon the Company’s failure to timely complete a Business
Combination. For purposes of clarity, in the event the Subscriber purchases
shares of Common Stock in the IPO or in the aftermarket, any additional shares
so purchased shall be eligible to receive any liquidating distributions by
the
Company. However, in no event will Subscriber have the right to redeem any
Shares into funds held in the Trust Account with the Escrow Agent in connection
with a vote by the IPO stockholders on the Business Combination.
3
5. Restrictions
on Transfer.
5.1 Securities
Law Restrictions.
In
addition to the restrictions contained in the Escrow Agreement, Subscriber
agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all
or
any part of the Shares unless, prior thereto (a) a registration statement on
the
appropriate form under the Securities Act and applicable state securities laws
with respect to the Shares proposed to be transferred shall then be effective
or
(b) the Company shall have received an opinion from counsel reasonably
satisfactory to the Company, that such registration is not required because
such
transaction is exempt from registration under the Securities Act and the rules
promulgated by the Securities and Exchange Commission thereunder and with all
applicable state securities laws.
5.2 Restrictive
Legends.
All
certificates representing the Shares shall have endorsed thereon legends
substantially as follows:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN A STOCK ESCROW AGREEMENT (THE “AGREEMENT”) AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM
OF
THE ESCROW PERIOD (AS DEFINED IN THE AGREEMENT).”
5.3. Additional
Shares or Substituted Securities.
In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding capital stock without receipt of
consideration, any new, substituted or additional securities or other property
which are by reason of such transaction distributed with respect to any Shares
subject to this Section 5 or into which such Shares thereby become convertible
shall immediately be subject to this Section 5 and Section 3.3. Appropriate
adjustments to reflect the distribution of such securities or property shall
be
made to the number and/or class of Shares subject to this Section 5 and Section
3.3.
4
6. Other
Agreements.
6.1. Further
Assurances.
Subscriber agrees to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this
Agreement.
6.2 No
Obligation as to Employment. The
Company is not by reason of this Agreement obligated to employ, or continue
to
employ, the Subscriber in any capacity.
6.3. Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be addressed to the receiving party’s address set forth on the
first page of this Agreement or to such other address as a party may designate
by notice hereunder, and shall be either (a) delivered by hand, (b) sent by
overnight courier, or (c) sent by certified mail, return receipt requested,
postage prepaid. All notices, requests, consents and other communications
hereunder shall be deemed to have been given either (i) if by hand, at the
time
of the delivery thereof to the receiving party at the address of such party
set
forth above, (ii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iii)
if
sent by certified mail, on the fifth (5th)
business day following the day such mailing is made.
6.4. Entire
Agreement.
This
Agreement, together with that certain letter agreement between Subscriber and
the Company, substantially in the form filed as an exhibit to the Registration
Statement, embodies the entire agreement and understanding between the
Subscriber and the Company with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings relating
to
the subject matter hereof. No statement, representation, warranty, covenant
or
agreement of any kind not expressly set forth in this Agreement shall affect,
or
be used to interpret, change or restrict, the express terms and provisions
of
this Agreement.
6.5. Modifications
and Amendments.
The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by all parties hereto.
6.6. Waivers
and Consents.
The
terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect
to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and
for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
5
6.7. Assignment.
The
rights and obligations under this Agreement may not be assigned by either party
hereto without the prior written consent of the other party.
6.8. Benefit.
All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and shall inure to the benefit
of the respective successors and permitted assigns of each party hereto. Nothing
in this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
6.9. Governing
Law.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the law of State of New York,
without giving effect to the conflict of law principles thereof.
6.10. Severability.
In the
event that any court of competent jurisdiction shall determine that any
provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
6.11. No
Waiver of Rights, Powers and Remedies.
No
failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto,
shall
operate as a waiver of any such right, power or remedy of such party. No single
or partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such
right, power or remedy, shall preclude such party from any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The election of any remedy by a party hereto shall not constitute a waiver
of
the right of such party to pursue other available remedies. No notice to or
demand on a party not expressly required under this Agreement shall entitle
the
party receiving such notice or demand to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
6.12. Survival
of Representations and Warranties.
All
representations and warranties made by the parties hereto in this Agreement
or
in any other agreement, certificate or instrument provided for or contemplated
hereby, shall survive the execution and delivery hereof and any investigations
made by or on behalf of the parties.
6.13. No
Broker or Finder.
Each of
the parties hereto represents and warrants to the other that no broker, finder
or other financial consultant has acted on its behalf in connection with this
Agreement or the transactions contemplated hereby in such a way as to create
any
liability on the other. Each of the parties hereto agrees to indemnify and
save
the other harmless from any claim or demand for commission or other compensation
by any broker, finder, financial consultant or similar agent claiming to have
been employed by or on behalf of such party and to bear the cost of legal
expenses incurred in defending against any such claim.
6
6.14. Headings
and Captions.
The
headings and captions of the various subdivisions of this Agreement are for
convenience of reference only and shall in no way modify or affect the meaning
or construction of any of the terms or provisions hereof.
6.15. Counterparts.
This
Agreement may be executed in one or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(Signature
page to follow)
7
If
any
foregoing accurately sets forth our understanding and agreement, please sign
the
enclosed copy of this agreement and return it to us.
Very
truly yours,
By:
________________________________
Name:
Title:
Accepted
and agreed this
27th day
of September,
2007
_____________________________
G.
Xxxxxxx Xxxxxx
8
