Exhibit 1.1
12,500,000 Units
Xxxxxxxxx Ventures Ltd.
UNDERWRITING AGREEMENT
New York, New York
February 28, 0000
Xxxx xx Xxxxxxx Securities LLC
00 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxxxx Ventures Ltd., a Delaware corporation (the
"Company"), proposes to sell to Banc of America Securities LLC (the
"Underwriter") an aggregate of 12,500,000 units (the "Units"), with each unit
consisting of one share (the "Unit Shares") of the Company's common stock, $.001
par value (the "Common Stock"), and one warrant (the "Warrants") to purchase
Common Stock (the "Firm Units"). The Company also proposes to sell at the
Underwriter's option an aggregate of up to 1,250,000 additional units of the
Company (the "Option Units" and together with the Firm Units, the "Units") as
set forth below. The terms of the Warrants are provided for in the form of the
Warrant Agreement (defined herein). The Units, the Unit Shares, the Warrants and
the Common Stock underlying the Warrants (the "Warrant Shares," and, together
with the Unit Shares, the "Shares") are herein collectively called the
"Securities."
The Unit Shares and the Warrants included in the Units will
not be separately transferable until five business days following the earlier of
the expiration or termination of the Underwriter's over-allotment option (as
described below) or the exercise in full of such option, subject to (a) the
preparation of an audited balance sheet of the Company reflecting receipt by the
Company of the proceeds of the offering and the filing of such audited balance
sheet with the Securities and Exchange Commission (the "Commission") on a Form
8-K or similar form by the Company which includes such balance sheet and (b) the
Company issuing a press release announcing when such separate trading will
begin. Each Warrant entitles its holder, upon exercise, to purchase one Warrant
Share for $6.00 during the period commencing on the later of the consummation by
the Company of its "Business Combination" or one year from the effective date of
the Registration Statement (as hereinafter defined) under the Act (as
hereinafter defined) and terminating on the four-year anniversary of the
Effective Date. As used herein, the term "Business Combination" (as described
more fully in the Registration Statement) shall mean the Company's initial
acquisition of one or more operating businesses through a merger, capital stock
exchange, stock purchase, asset acquisition or other similar business
combination in the communications, media or technology industries.
The Company and the Underwriter agree that up to 600,000 of
the Firm Units to be purchased by the Underwriter (the "Directed Units") shall
be reserved for sale at the initial public offering price by the Underwriter to
certain eligible friends, directors or officers of the Company (collectively,
the "DSP Participants"), as part of the distribution of the Units by the
Underwriter (the "Directed Unit Program") subject to the terms of this
agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. Banc of America Investment Services, Inc. or its
designee, Legend Merchant Group (collectively, "BAI") shall be selected to
process the sales to the DSP Participants under the Directed Unit Program. To
the extent that such Directed Units are not orally confirmed for purchase by the
DSP Participants by 8:00 A.M. New York City time on the first business day after
the date of this Agreement, such Directed Units may be offered to the public as
set forth in the Prospectus (as defined below). The Company has supplied BAI
with the names, addresses and telephone numbers of the individuals or other
entities that the Company has designated to be participants in the Directed
Units Program.
The Company has entered into an Investment Management Trust
Agreement, dated as of the date hereof, with JPMorgan Chase Bank, NA (the
"Trustee"), as trustee, in substantially the form filed as an exhibit to the
Registration Statement (the "Trust Agreement"), pursuant to which certain
proceeds of the offering of the Securities will be deposited and held in a trust
account (the "Trust Account") for the benefit of the Company and holders of the
Firm Units and the Option Units, if and when issued.
The Company has entered into a Warrant Agreement, dated as of
the date hereof, with respect to the Warrants with Continental Stock Transfer &
Trust Company (the "Warrant Agent"), as warrant agent, in substantially the form
filed as an exhibit to the Registration Statement (the "Warrant Agreement"),
pursuant to which the Warrant Agent will act as warrant agent in connection with
the issuance, registration, transfer, exchange, redemption and exercise of the
Warrants and the Private Placement Warrants (as hereinafter defined).
The Company has entered into Amended and Restated Subscription
Agreements, effective as of July 6, 2006 (the "Subscription Agreements"), with
Xxxxxxxxx Capital Partners LLC ("CCP"), Xxxxxx Xxxxxx, Xxxxxx Xxxxx and Xxxxxxx
Xxxxxxxxxxx (the "Initial Stockholders"), pursuant to which the Initial
Stockholders have purchased an aggregate of 3,125,000 shares of Common Stock
(the "Founder Shares") at an aggregate price of $15,625.
The Company has entered into a Warrant Purchase Agreement,
dated as of September 5, 2006, with CCP, and a Warrant Purchase Agreement, dated
as of February 12, 2007 with CCP (collectively, the "Warrant Purchase
Agreement"), pursuant to which CCP has agreed to purchase an aggregate of
5,000,000 Warrants (the "Private Placement Warrants") for a price per Warrant of
$1.00, for a total of $5,000,000, in a private placement to be completed prior
to the offering of the Units (the "Private Placement"). The Private Placement
Warrants possess terms identical to the Warrants underlying the Units sold to
the public in the offering except with respect to the redemption thereof and
certain transfer restrictions applicable thereto, as set forth in the Warrant
Purchase Agreement.
The Company has entered into an agreement (the "Services
Agreement") with CCP, the Company's principal stockholder, pursuant to which the
Company will pay an
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aggregate monthly fee of $7,500 for general and administrative services,
including office space, utilities and secretarial support for a period of up to
twenty-four (24) months following the Effective Date, terminating upon the
completion of a Business Combination.
The Company has entered into a Registration Rights Agreement,
dated as of the date hereof, in substantially the form filed as an exhibit to
the Registration Statement (the "Registration Rights Agreement"), pursuant to
which the Company has granted certain registration rights in respect of the
Founder Shares, the Private Placement Warrants and the Common Stock underlying
the Private Placement Warrants.
The Company has caused to be duly executed and delivered
letters by each Initial Stockholder and each of the Company's directors,
officers and special advisors, filed as exhibits to the Registration Statement
(as the same may be amended or supplemented from time to time, the "Insider
Letters"), pursuant to which each of the Initial Stockholders and each of the
Company's directors, officers and special advisors agrees to certain matters,
including but not limited to, certain matters relating to the voting of shares
of Common Stock owned by them, if any, and certain other matters described as
being agreed to by them under the "Proposed Business" section of the Statutory
Prospectus (as defined below) and the Prospectus.
In consideration of the mutual agreements contained herein and
of the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Underwriter as
follows:
(a) A registration statement on Form S-1 (File
No. 333-135741) with respect to the Securities has been prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to the Underwriter. Such registration statement,
together with any registration statement filed by the Company pursuant to Rule
462(b) under the Act, is herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in reliance
upon Rules 430A or 430C under the Act and contained in the Prospectus referred
to below, has become effective under the Act and no post-effective amendment to
the Registration Statement has been filed as of the date of this Agreement.
"Prospectus" means the form of prospectus first filed with the Commission
pursuant to and within the time limits described in Rule 424(b) under the Act.
Each preliminary prospectus included in the Registration Statement prior to the
time it becomes effective is herein referred to as a "Preliminary Prospectus."
Any reference herein to the Registration Statement, any Preliminary Prospectus
or to the Prospectus or to any amendment or supplement to any of the foregoing
documents shall be deemed to refer to and include any documents incorporated by
reference therein, and, in the case of any reference herein to the Prospectus,
also shall be deemed to include any documents incorporated by reference therein,
and any supplements or
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amendments thereto, filed with the Commission after the date of filing of the
Prospectus under Rule 424(b) under the Act, and prior to the termination of the
offering of the Securities by the Underwriter. The Company has filed with the
Commission a Form 8-A (File Number 001-____) providing for the registration
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of
the Securities.
(b) The Units, the Warrants and the Common Stock
have been duly listed, and admitted and authorized for trading, subject only to
official notice of issuance, on the American Stock Exchange, and the Company
knows of no reason or set of facts which is likely to adversely affect such
approval. Neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus relating to the proposed offering of the Securities or has instituted
or, to the Company's knowledge, threatened to institute any proceedings with
respect to such an order. Neither the Commission nor any state regulatory
authority has issued any order preventing or suspending the effectiveness of the
Registration Statement and no proceeding for that purpose or pursuant to Section
8A of the Act has been instituted or is pending or is contemplated or threatened
by the Commission.
(c) As of the Applicable Time (as defined below)
and as of the Closing Date or the Option Closing Date (each such term as defined
below), as the case may be, the Statutory Prospectus (as defined below) and the
information included in Schedule I hereto all included together (collectively,
the "General Disclosure Package") did not and will not include any untrue
statement of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from the General Disclosure Package, in reliance upon,
and in conformity with, written information furnished to the Company by or on
behalf of the Underwriter, specifically for use therein, it being understood and
agreed that the only such information is that described in Section 12 herein. As
used in this subsection and elsewhere in this Agreement:
(i) "Applicable Time" means ______
[A/P]m (New York time) on the date of this Agreement or such
other time as agreed to by the Company and the Underwriter.
(ii) "Statutory Prospectus" as of any
time means the Preliminary Prospectus relating to the
Securities that is included in the Registration Statement
immediately prior to that time.
(d) The agreements and documents described in
the Registration Statement, the Statutory Prospectus and the Prospectus conform,
to the extent described therein, in all material respects to the descriptions
thereof contained therein. There is no franchise, contract or other document of
a character required to be described in the Registration Statement, Statutory
Prospectus or Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required (and the Statutory Prospectus contains in all
material respects the same description of the foregoing matters contained in the
Prospectus); and the statements in the Statutory Prospectus and the Prospectus
under the headings "Principal Stockholders," "Certain
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Relationships and Related Transactions," "Description of Securities" and "Legal
Matters" insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings.
(e) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement and the
Prospectus. The Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such qualification.
The Company has no subsidiaries, direct or indirect.
(f) The information set forth under the caption
"Capitalization" in the Registration Statement and the Prospectus is true and
correct. All of the Securities conform to the description thereof contained in
the Registration Statement and the Prospectus. The form of certificates for the
Securities is in valid and sufficient form.
(g) All issued and outstanding shares of Common
Stock have been duly and validly authorized and issued and are fully paid and
nonassessable. The offers and sales of the outstanding Common Stock were at all
relevant times either registered under the Act, the applicable state securities
and Blue Sky laws (or the laws and regulations of jurisdictions outside the
United States in which directed units are offered) or, based in part on the
representations and warranties of the purchasers of such shares of Common Stock,
exempt from such registration requirements. The holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other rights to
subscribe for securities; and, except as set forth in the Statutory Prospectus
and the Prospectus, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in the Company are outstanding.
(h) The Unit Shares have been duly authorized
and, when executed by the Company and countersigned, and issued and delivered
against payment therefor by the Underwriter pursuant to this Agreement, will be
validly issued, fully paid and non-assessable. The holders of such Common Stock
are not and will not be subject to personal liability by reason of being such
holders; such Common Stock is not and will not be subject to any preemptive or
other similar contractual rights granted by the Company; and all corporate
action required to be taken for the authorization, issuance and sale of such
Common Stock (other than such execution, countersignature and delivery at the
time of issuance) has been duly and validly taken.
(i) The Warrants included in the Units, when
executed, authenticated, issued and delivered in the manner set forth in the
Warrant Agreement against payment therefor by the Underwriter pursuant to this
Agreement, will be duly authorized, duly executed, authenticated, issued and
delivered, and will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally from time to time in effect and by
equitable principles of general applicability.
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(j) The Warrant Shares have been duly authorized
and, when executed by the Company and countersigned and issued and delivered
against payment therefor pursuant to the Warrants and the Warrant Agreement,
will be validly issued, fully paid and non-assessable. The holders of such
Common Stock are not and will not be subject to personal liability by reason of
being such holders; such Common Stock is not and will not be subject to any
preemptive or other similar contractual rights granted by the Company; and all
corporate action required to be taken for the authorization, issuance and sale
of such Common Stock (other than such execution, countersignature and delivery
at the time of issuance) has been duly and validly taken.
(k) The Initial Stockholders have waived any and
all rights and claims they may have with respect to the Founder Shares to
participate in any distributions occurring upon the Company's failure to
consummate a Business Combination.
(l) The execution and delivery of, and the
performance by the Company of its obligations under, this Agreement has been
duly and validly authorized by all necessary corporate action on the part of the
Company, and this Agreement has been duly executed and delivered by the Company.
(m) The Trust Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally from time to
time in effect and by equitable principles of general applicability.
(n) The Warrant Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally from time to
time in effect and by equitable principles of general applicability.
(o) The Warrant Purchase Agreement has been duly
authorized, executed and delivered by the Company and CCP, and is a valid and
binding agreement of the Company and CCP, enforceable against the Company and
CCP in accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally from time to time in effect and by equitable principles of general
applicability. The entire $5,000,000 of proceeds from the sale of the Private
Placement Warrants has been deposited in the Trust Account in accordance with
the terms of the Warrant Purchase Agreement.
(p) Each Subscription Agreement has been duly
authorized, executed and delivered by the Company and the respective Initial
Stockholder, and is a valid and binding agreement of the Company and the
respective Initial Stockholder, enforceable against the Company and such Initial
Stockholder in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally from time to time in effect and by equitable principles of
general applicability.
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(q) The Services Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally from time to
time in effect and by equitable principles of general applicability.
(r) The Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
from time to time in effect and by equitable principles of general
applicability.
(s) Each of the Insider Letters has been duly
authorized, executed and delivered by each of the individuals party thereto and
is a valid and binding agreement of each of such parties, enforceable against
each of them in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally from time to time in effect and by equitable principles of
general applicability.
(t) The Registration Statement contains, and the
Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform to, the
requirements of the Act and the Rules and Regulations. Neither the Commission
nor any state regulatory authority has issued an order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus relating to the proposed
offering of the Units, and no proceeding for that purpose or pursuant to Section
8A of the Act has been instituted or to the Company's knowledge, threatened by
the Commission or any state regulatory authority (or any regulatory authority in
any jurisdiction outside the United States in which directed units are offered.
To the knowledge of the Company, neither the Commission nor any state regulatory
authority has issued any order preventing or suspending the effectiveness of the
Registration Statement and no proceeding for that purpose or pursuant to Section
8A of the Act has been instituted or is pending or is contemplated or threatened
by the Commission. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do
not omit, and will not omit, to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not contain, and will
not contain, any untrue statement of a material fact; and do not omit, and will
not omit, to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the Company by or
on behalf of the Underwriter, specifically for use therein, it being understood
and agreed that the only such information is that described in Section 12
herein.
(u) The Company has not, directly or indirectly,
distributed and will not distribute any offering material in connection with the
offering and sale of the Units other than any Preliminary Prospectus and the
Prospectus.
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(v) The financial statements of the Company,
together with related notes and schedules as set forth in the Registration
Statement and the Prospectus, present fairly the financial position and the
results of operations and cash flows of the Company at the indicated dates and
for the indicated periods. Such financial statements and related schedules have
been prepared in accordance with generally accepted principles of accounting
("GAAP"), consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected financial and
statistical data included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein and
such data has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company. The pro forma
financial statements and other pro forma financial information included in the
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein. The Company does not have any material
liabilities or obligations, direct or contingent (including any off balance
sheet obligations or any "variable interest entities" within the meaning of
Financial Accounting Standards Board Interpretation No. 46), not disclosed in
the Registration Statement and the Prospectus. There are no financial statements
(historical or pro forma) that are required to be included in the Registration
Statement or the Prospectus that are not included as required.
(w) Xxxxxx LLP ("Xxxxxx"), who has certified the
financial statements that are filed with the Commission as part of the
Registration Statement and the Prospectus, is an independent registered public
accounting firm with respect to the Company within the meaning of the Act and
the applicable Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the "PCAOB"). Xxxxxx has not, during the periods covered
by the financial statements included in the Statutory Prospectus and the
Prospectus, provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act.
(x) The Company is not aware of (i) any material
weakness in its internal control over financial reporting or (ii) change in
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
(y) Solely to the extent that the Xxxxxxxx-Xxxxx
Act of 2002, as amended, and the rules and regulations promulgated by the
Commission and the American Stock Exchange thereunder (the "Xxxxxxxx-Xxxxx Act")
is applicable to the Company, there is and has been no failure on the part of
the Company to comply in all material respects with any provision of the
Xxxxxxxx-Xxxxx Act. The Company has taken all necessary actions to ensure that
it is in compliance with all provisions of the Xxxxxxxx-Xxxxx Act that are in
effect and with which the Company is required to comply and is actively taking
steps to ensure that it will be in compliance with other provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect or which will become applicable to
the Company.
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(z) The Company has good and marketable title to
all of the properties and assets reflected in the financial statements
hereinabove described or described in the Registration Statement and the
Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements or described in the
Registration Statement and the Prospectus or which are not material in amount.
The Company occupies its leased properties under valid and binding leases.
(aa) The Company has filed all Federal, State,
local and foreign tax returns which have been required to be filed and have paid
all taxes indicated by such returns and all assessments received by it to the
extent that such taxes have become due. All tax liabilities have been adequately
provided for in the financial statements of the Company, and the Company does
not know of any actual or proposed additional material tax assessments.
(bb) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, as each
may be amended or supplemented, there has not been any material adverse change
or any development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the Company,
whether or not occurring in the ordinary course of business, and there has not
been any material transaction entered into or any material transaction that is
probable of being entered into by the Company, other than transactions in the
ordinary course of business and changes and transactions described in the
Registration Statement and the Prospectus, as each may be amended or
supplemented. The Company has no material contingent obligations which are not
disclosed in the Company's financial statements which are included in the
Registration Statement and the Prospectus.
(cc) There is no action, suit, claim or
proceeding pending, or to the knowledge of the Company threatened, against the
Company or, pending, or to the knowledge of the Company threatened, against any
of the Company's stockholders immediately prior to the offering of the Units,
before any court or administrative agency or otherwise which if determined
adversely to the Company would either (i) have, individually or in the
aggregate, a material adverse effect on the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company or (ii) prevent the consummation of the transactions
contemplated hereby (the occurrence of any such effect or any such prevention
described in the foregoing clauses (i) and (ii) being referred to as a "Material
Adverse Effect"), except as set forth in the Registration Statement and the
Prospectus.
(dd) The Company is not, nor with the giving of
notice or lapse of time or both, will it be, (i) in violation of its certificate
of incorporation, by-laws or other organizational documents or (ii) in violation
of or in default under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any of its
properties, is bound and, solely with respect to this clause (ii), which
violation or default would have a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party or by which the Company or any of its properties
is bound, or of the
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certificate of incorporation or by-laws of the Company or any law, order, rule
or regulation judgment, order, writ or decree applicable to the Company of any
court or of any government, regulatory body or administrative agency or other
governmental body having jurisdiction.
(ee) The Company possesses all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its
business, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or permit.
(ff) Each approval, consent, order,
authorization, designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement, the Trust Agreement,
the Warrant Agreement, the Subscription Agreements, the Warrant Purchase
Agreement, the Registration Rights Agreement, the Services Agreement and the
Insider Letters and the consummation of the transactions herein contemplated
(except such additional steps as may be required by the Commission, the NASD, or
such additional steps as may be necessary to qualify the Securities for public
offering by the Underwriter under state securities or Blue Sky laws or the laws
and regulations of jurisdictions outside the United States in which Directed
Units are offered) has been obtained or made and is in full force and effect.
(gg) Neither the Company nor any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Securities.
(hh) The Company is not nor, after giving effect
to the offering and sale of the Securities contemplated hereunder and the
application of the net proceeds from such sale as described in the Prospectus,
will not be an "investment company" within the meaning of such term under the
Investment Company Act of 1940 as amended (the "1940 Act"), and the rules and
regulations of the Commission thereunder.
(ii) The Company maintains 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 to permit preparation
of financial statements in conformity with GAAP 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.
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(jj) The Company has established and maintains
"disclosure controls and procedures" (as defined in Rules 13a-14(c) and
15d-14(c) under the Exchange Act); the Company's "disclosure controls and
procedures" are reasonably designed to ensure that all information (both
financial and non-financial) required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and
regulations of the Exchange Act, and that all such information is accumulated
and communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the
Chairman and Chief Financial Officer of the Company required under the Exchange
Act with respect to such reports.
(kk) The statistical, industry-related and
market-related data included in the Registration Statement, the General
Disclosure Package 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.
(ll) The operations of the Company are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
"Money Laundering Laws"), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending or, to the
Company's knowledge, threatened.
(mm) Neither the Company nor any director,
officer, agent, employee or affiliate of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department ("OFAC"); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(nn) The Company does not carry, and is not
covered by, insurance.
(oo) The Securities have been approved for
listing subject to notice of issuance on the American Stock Exchange.
(pp) There are no relationships or related-party
transactions involving the Company or any other person required to be described
in the Prospectus which have not been described as required. (qq) The Company
has not made any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law which
violation is required to be disclosed in the Prospectus.
(rr) (i) The Registration Statement, the
Prospectus, the General Disclosure Package and any Preliminary Prospectus
comply, and any further amendments or
11
supplements thereto will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus, the General Disclosure Package or
any Preliminary Prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Unit Program, and (ii) no
authorization, approval, consent, license, order registration or qualification
of or with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Units are offered
outside the United States.
(ss) The Company has not offered, or caused the
Underwriter or its affiliates to offer, Units to any person pursuant to the
Directed Unit Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's level
or type of business with the Company, or (ii) a trade journalist or publication
to write or publish favorable information about the Company or its products.
(tt) The execution, delivery, and performance by
the Company of this Agreement, the Warrant Agreement, the Trust Agreement, the
Subscription Agreements, the Warrant Purchase Agreement, the Registration Rights
Agreement and the Services Agreement, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement; (ii) result in any violation of the provisions
of the certificate of incorporation or the by-laws 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.
(uu) To the knowledge of the Company, all
information contained in the questionnaires completed by the Initial
Stockholders and the directors, officer and special advisors and provided to the
Underwriter as an exhibit to his or her Insider Letter is true and correct in
all material respects and the Company has not become aware of any information
which would cause the information disclosed in the questionnaires completed by
each Initial Stockholder, director, officer and special advisor to become
inaccurate and incorrect in any material respect.
(vv) Except as described in the Statutory
Prospectus and the Prospectus, there are no claims, payments, arrangements,
contracts, agreements or understandings relating to the payment of a brokerage
commission or finder's, consulting, origination or similar fee by the Company or
any Initial Stockholder with respect to the sale of the Securities hereunder or
any other arrangements, agreements or understandings of the Company or any
Initial Stockholder that may affect the Underwriter's compensation, as
determined by the NASD.
(ww) Except as disclosed in the Registration
Statement and the Prospectus, to the knowledge of the Company, no Initial
Stockholder, employee, officer or director of the Company is subject to any
non-competition or non-solicitation agreement with
12
any employer or prior employer which could materially adversely affect his
ability to be an Initial Stockholder, employee, officer and/or director of the
Company.
(xx) The Company has not made any direct or
indirect payments (in cash, securities or otherwise) to: (i) any person, as a
finder's fee, consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who raised
or provided capital to the Company; (ii) to any NASD member; or (iii) to any
person or entity that has any direct or indirect affiliation or association with
any NASD member, within the 12 months prior to the Effective Date.
(yy) None of the net proceeds of the offering
will be paid by the Company to any participating NASD member or its affiliates,
except as specifically authorized herein or except as may be paid in connection
with an initial Business Combination and/or one or more other transactions after
the initial Business Combination, including without limitation in connection
with the payment of investment banking fees, fees in connection with fairness
opinions and the like.
(zz) Based on questionnaires distributed to such
persons, no officer, director or any beneficial owner of the Company's
unregistered securities has any direct or indirect affiliation or association
with any NASD member. The Company will advise the Underwriter if it learns that
any officer or director is or becomes an affiliate or associated person of an
NASD member participating in the offering.
(aaa) There are no business relationships or
related party transactions involving the Company or any other person required to
be described in the Registration Statement and the Prospectus that have not been
described as required.
(bbb) Upon delivery and payment for the Firm Units
on the Closing Date, the Company will not be subject to Rule 419 under the Act
and none of the Company's outstanding securities will be deemed to be a "xxxxx
stock" as defined in Rule 3a-51-1 under the Exchange Act.
(ccc) The Company does not have any specific
Business Combination under consideration and the Company does not (nor has
anyone on its behalf) contacted any prospective acquisition candidate or had any
discussions, formal or otherwise, with respect to such a transaction.
(ddd) The Company has not prepared or used an
Issuer Free Writing Prospectus, as such term is defined in Rule 433 under the
Act in connection with the offering of the Units.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SECURITIES.
(a) On the basis of the representations,
warranties and covenants herein contained, and subject to the conditions herein
set forth, the Company agrees to sell to the Underwriter and the Underwriter
agrees to purchase, at a price of $7.72 per unit (including $0.28 per Firm Unit
to be held in the Trust Account as deferred discount and commissions (the
13
"Deferred Underwriting Discount")), the number of Firm Units subject to
adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Units to be sold
hereunder is to be made in Federal (same day) funds against delivery of
certificates therefor to the Underwriter. Such payment and delivery are to be
made through the facilities of The Depository Trust Company, New York, New York
("DTC") at 10:00 a.m., New York time, on the third business day after the date
of this Agreement (or the fourth business day following the date of this
Agreement, if the Registration Statement is declared effective after 4:30 p.m.,
New York time) or at such other time and date not later than five business days
thereafter as the Underwriter and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and are not permitted by law or
executive order to be closed.) Payment for the Firm Units shall be made on the
Closing Date by wire transfer in Federal (same day) funds, as follows:
ninety-five million dollars ($95,000,000) (without giving effect to the
over-allotment option) of the proceeds received by the Company for the Firm
Units shall be deposited in the Trust Account (including three million five
hundred thousand dollars ($3,500,000) to be held in the Trust Account as
Deferred Underwriting Discount) and the remaining one million five hundred
thousand dollars ($1,500,000) (representing $950,000 of the proceeds not
required to be held in the trust account and $550,000 of offering expenses) of
the proceeds shall be paid to the Company upon delivery to the Underwriter of
certificates (in form and substance satisfactory to the Underwriter)
representing the Firm Units (or through the facilities of DTC) for the account
of the Underwriter. The Firm Units shall be registered in such name or names and
in such authorized denominations as the Underwriter may request in writing at
least two full business days prior to the Closing Date. The Company will permit
the Underwriter to examine and package the Firm Units for delivery at least one
full business day prior to the Closing Date.
(c) In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriter to purchase the Option Units at the price per unit as set forth in
the first paragraph of this Section 2. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time before
the Closing Date and (ii) only once thereafter within 30 days after the date of
this Agreement, by the Underwriter, to the Company setting forth the number of
Option Units as to which the Underwriter is exercising the option and the time
and date at which such certificates are to be delivered. The time and date at
which certificates for Option Units are to be delivered shall be determined by
the Underwriter but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall set the Closing Date as the Option
Closing Date. The option with respect to the Option Units granted hereunder may
be exercised only to cover over-allotments in the sale of the Firm Units by the
Underwriter. The Underwriter may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company. To the
extent, if any, that the option is exercised, payment for the Option Units shall
be made on the Option Closing Date in Federal (same day funds) through the
facilities of DTC
14
drawn to the order of the Company. Payment for the Option Units shall be made on
the Option Closing Date by wire transfer in Federal (same day) funds, as
follows: $7.72 per Option Unit sold shall be deposited in the Trust Account
pursuant to the Trust Agreement (including $0.28 per Option Unit to be held in
the Trust Account as Deferred Underwriting Discount) upon delivery to the
Underwriter of certificates (in form and substance satisfactory to the
Underwriter) representing the Option Units sold (or through the facilities of
DTC) for the account of the Underwriter.
3. OFFERING BY THE UNDERWRITER.
It is understood that the Underwriter is to make a public
offering of the Firm Units as soon as the Underwriter deems it advisable to do
so. The Firm Units are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Underwriter may from time
to time thereafter change the public offering price and other selling terms.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Underwriter that:
(a) The Company will (A) prepare and timely file
with the Commission under Rule 424(b) under the Act a Prospectus in a form
approved by the Underwriter containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rules 430A
and 430C under the Act, and (B) not file any amendment to the Registration
Statement or distribute an amendment or supplement to the Prospectus of which
the Underwriter shall not previously have been advised and furnished with a copy
or to which the Underwriter shall have reasonably objected in writing or which
is not in compliance with the Rules and Regulations and (C) file on a timely
basis all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the Securities by the
Underwriter.
(b) The Company will advise the Underwriter
promptly (A) when the Registration Statement or any post-effective amendment
thereto shall have become effective, (B) of receipt of any comments from the
Commission, (C) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or of the institution of any proceedings for that purpose or
pursuant to Section 8A of the Act. The Company will use its best efforts to
prevent the issuance of any such order and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will cooperate with the
Underwriter in endeavoring to qualify the Securities for sale under the
securities laws of such jurisdictions as the Underwriter may reasonably have
designated in writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to
15
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time, prepare
and file such statements, reports, and other documents, as are or may be
required to continue such qualifications in effect for so long a period as the
Underwriter may reasonably request for distribution of the Securities.
(d) The Company will deliver to, or upon the
order of, the Underwriter, from time to time, as many copies of any Preliminary
Prospectus as the Underwriter may reasonably request. The Company will deliver
to, or upon the order of, the Underwriter during the period when delivery of a
Prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under
the Act) (the "Prospectus Delivery Period") is required under the Act, as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Underwriter may reasonably request. The Company will
deliver to the Underwriter at or before the Closing Date, four signed copies of
the Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Underwriter such number of copies of
the Registration Statement (including such number of copies of the exhibits
filed therewith that may reasonably be requested), and of all amendments
thereto, as the Underwriter may reasonably request.
(e) The Company will comply with the Act and the
Rules and Regulations, and the Exchange Act, and the rules and regulations of
the Commission thereunder, so as to permit the completion of the distribution of
the Units as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus (or, in lieu thereof, the notice referred to under
Rule 173(a) under the Act) is required by law to be delivered by an Underwriter
or dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriter, it becomes necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or,
if it is necessary at any time to amend or supplement the Prospectus to comply
with any law, the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not be
misleading, or so that the Prospectus will comply with the law.
(f) If the General Disclosure Package is being
used to solicit offers to buy the Units at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of the
Underwriter, it becomes necessary to amend or supplement the General Disclosure
Package in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to make the
statements therein not conflict with the information contained in the
Registration Statement then on file, or if it is necessary at any time to amend
or supplement the General Disclosure Package to comply with any law, the Company
promptly will prepare, file with the Commission (if required) and furnish to the
Underwriter and any dealers an appropriate amendment or supplement to the
General Disclosure Package.
(g) The Company will make generally available to
its security holders, as soon as it is practicable to do so, but in any event
not later than 15 months after the effective date of the Registration Statement,
an earnings statement (which need not be audited) in
16
reasonable detail, covering a period of at least 12 consecutive months beginning
after the effective date of the Registration Statement, which earnings statement
shall satisfy the requirements of Section 11(a) of the Act and Rule 158 under
the Act and will advise the Underwriter in writing when such statement has been
so made available.
(h) Prior to the Closing Date, the Company will
furnish to the Underwriter, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim financial statements
of the Company for any period subsequent to the period covered by the most
recent financial statements appearing in the Registration Statement and the
Prospectus.
(i) The Company hereby agrees that until the
Company consummates a Business Combination, it shall not issue any shares of
Common Stock or any options or other securities convertible into Common Stock,
or any shares of preferred stock which participate in any manner in the Trust
Account or which vote as a class with the Common Stock on the Business
Combination.
(j) The Company will use its best efforts to
effect and maintain the listing of the Securities on the American Stock
Exchange. For a period of at least four years from the Effective Date, or until
such earlier time upon which the Company is required to be liquidated, the
Company will use its best efforts to maintain the registration of the Units,
Common Stock and Warrants under the provisions of the Exchange Act. The Company
will not deregister the Units under the Exchange Act without the prior written
consent of the Underwriter.
(k) The Company shall apply the net proceeds of
its sale of the Securities as set forth in the Registration Statement and the
Prospectus and shall file such reports with the Commission with respect to the
sale of the Securities and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(l) The Company shall not invest, or otherwise
use the proceeds received by the Company from its sale of the Securities in such
a manner as would require the Company or any of the Subsidiaries to register as
an investment company under the 1940 Act.
(m) The Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(n) The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
(o) In connection with the Directed Unit
Program, the Company will comply with all applicable securities and other
applicable laws, rules and regulations in each jurisdiction in which the
directed untis are offered in connection with the Directed Unit Program and
ensure that the Directed Units will be restricted to the extent required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement. BAI will notify the Company as to which DSP Participants
will need to be so restricted. The Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period of time.
17
Should the Company release, or seek to release, from such restrictions any of
the Directed Units, the Company agrees to reimburse the Underwriter and BAI for
any reasonable expense (including, without limitation, legal expenses) they
incur in connection with such release.
(p) In no event will the fees payable under the
Services Agreement be more than $7,500 per month in the aggregate.
(q) Except as set forth in this paragraph 4(q),
the Company shall not pay any Initial Stockholder or any of their affiliates any
fees or compensation from the Company, for services rendered to the Company
prior to, or in connection with, the consummation of a Business Combination;
provided that the Initial Stockholders shall be entitled to reimbursement from
the Company for their out-of-pocket expenses incurred in connection with seeking
and consummating a Business Combination.
(r) The Company will reserve and keep available
that maximum number of its authorized but unissued securities which are issuable
upon exercise of any of the Securities outstanding from time to time.
(s) Prior to the consummation of a Business
Combination or the liquidation of the Trust Account, the Company shall not issue
any shares of Common Stock, Warrants or any options or other securities
convertible into Common Stock, or any shares of preferred stock which
participate in any manner in the Trust Account or which vote as a class with the
Common Stock on a Business Combination.
(t) The Company agrees that it will use its best
efforts to prevent the Company from becoming subject to Rule 419 under the Act
prior to the consummation of any Business Combination.
(u) The Company hereby agrees that prior to
commencing its due diligence investigation of any operating business which the
Company seeks to acquire for its initial Business Combination ("Target
Business") or obtaining the services of any vendor or service provider or other
entity, it will use its best efforts to cause the Target Business or vendor or
service provider or other entity with which the Company executes an agreement to
execute a waiver letter in the form attached hereto as Exhibit A and Exhibit B.
It is understood that the Company may not be able to obtain such letters in some
or all circumstances and that, nonetheless, the Company may still proceed with
such due diligence investigations and enter into agreements with such parties or
obtaining of services, as applicable. In the event that a vendor or Target
Business refuses to enter into such a waiver letter, the Company may engage such
vendor or commence due diligence investigations of, or enter into discussions
with, such Target Business, provided the Company determines that it would be
unable to obtain, on reasonable terms, substantially similar services or
opportunities from another entity willing to enter into such a waiver.
(v) Prior to the consummation of the initial
Business Combination, the Company will submit such transaction to the Company's
stockholders for their approval ("Business Combination Vote") even if the nature
of the acquisition is such as would not ordinarily require stockholder approval
under applicable state law; and in the event that the
18
Company does not effect a Business Combination within 18 months from the
consummation of this offering (subject to extension for an additional six-month
period, as described in the Statutory Prospectus and the Prospectus), the
Company will promptly adopt a plan of dissolution and distribution of its assets
and initiate procedures for its dissolution. Upon the approval of the
stockholders of the Company's dissolution and plan of distribution of assets,
the Company will distribute to all holders of the Common Stock issued as part of
the Units in this offering ("IPO Shares") an aggregate sum equal to the
Company's "Liquidation Value." The Company's "Liquidation Value" shall mean the
amount of funds in the Trust Account (including (a) the proceeds held in the
Trust Account from this Offering and the Private Placement, (b) the amount held
in the Trust Account representing the Deferred Underwriting Discount and (c) any
interest income earned on the funds held in the Trust Account, net of taxes
payable and less amounts that have been distributed to the Company as described
in the Registration Statement and Prospectus to cover a portion of the operating
expenses of the Company). Only holders of IPO Shares shall be entitled to
receive liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of capital stock of the Company.
With respect to the initial Business Combination Vote, the Company shall cause
the Initial Stockholders to vote all their IPO Shares and any other shares of
Common Stock held by them, whenever and however acquired, in accordance with the
vote of a majority of the Public Stockholders (as defined below). At the time
the Company seeks approval of the initial Business Combination, the Company will
offer to each holder of IPO Shares (the "Public Stockholders") the right to
convert their IPO Shares at a per share conversion price (the "Conversion
Price"), calculated as of two business days prior to the consummation of such
proposed Business Combination, equal to (A) the amount in the Trust Account
inclusive of (x) the proceeds from this Offering and the Private Placement held
in trust, (y) any interest income earned on the funds held in the Trust Account
and (z) the Deferred Underwriting Discount but exclusive of (1) taxes payable on
any amount in the Trust Account and (2) $1.35 million, net of taxes, of interest
earned on the Trust Account that have been released to the Company to cover a
portion of its operating expenses divided by (B) the total number of IPO Shares.
If a majority of the shares voted by the holders of IPO Shares are voted to
approve the initial Business Combination, and if holders of less than 20% in
interest of the IPO Shares vote against such approval of a Business Combination
and elect to convert their IPO Shares, the Company may, but will not be required
to, proceed with such Business Combination. If the Company elects to so proceed,
it will convert shares, based upon the Conversion Price, from those holders of
IPO Shares who affirmatively requested such conversion and who voted against the
Business Combination. Only Public Stockholders shall be entitled to receive
distributions from the Trust Account in connection with the approval of an
initial Business Combination, and the Company shall pay no distributions with
respect to any other holders or shares of capital stock of the Company. If
holders of 20% or more in interest of the IPO Shares vote against approval of a
potential Business Combination and elect to convert their IPO Shares, the
Company will not proceed with such Business Combination and will not convert
such shares.
(w) The Company agrees that the initial Target
Business that it acquires in a Business Combination must have a fair market
value equal to at least 80% of the Company's net assets (all of the Company's
assets, including the amount in the Trust Account excluding the Deferred
Underwriting Discount (including any portion of the Deferred Underwriting
Discount that relates to the Option Units) less the Company's liabilities), at
the
19
time of such acquisition. The fair market value of such business must be
determined by the Board of Directors of the Company based upon standards
generally accepted by the financial community, such as (and not by means of
limitation) actual and potential sales, earnings and cash flow and book value.
If the Board of Directors of the Company is not able to independently determine
that the Target Business has a fair market value of at least 80% of the
Company's net assets (all of the Company's assets, including the amount in the
Trust Account excluding the Deferred Underwriting Discount (including any
portion of the discount that relates to the Option Units) less the Company's
liabilities) at the time of such Business Combination, the Company will obtain
an opinion from an unaffiliated, independent investment banking firm which is a
member of the NASD with respect to the satisfaction of such criteria. The
Company is not required to obtain an opinion from an investment banking firm as
to the fair market value of the target business if the Company's Board of
Directors independently determines that the target business does have sufficient
fair market value.
(x) Upon the consummation of the initial
Business Combination, the Company will pay to the Underwriter, the Deferred
Underwriting Discount less $0.28 per IPO Share converted. Payment of the
Deferred Underwriting Discount will be made out of the proceeds of this offering
held in the Trust Account. The Underwriter shall have no claim to payment of any
interest earned on the portion of the proceeds held in the Trust Account
representing the Deferred Underwriting Discount. If the Company fails to
consummate its initial Business Combination within the required time period set
forth in the Registration Statement, the Deferred Underwriting Discount will not
be paid to the Underwriter and will, instead, be included in the liquidation
distribution of the proceeds held in the Trust Account made to the holders of
the IPO Shares (as defined in Section 4(v) above). In connection with any such
liquidation distribution, the Underwriter will forfeit any rights or claims to
the Deferred Underwriting Discount, including any accrued interest thereon.
(y) In the event any person or entity
(regardless of any NASD 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 the NASD and the
Underwriter prior to the consummation of the Business Combination: (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 2710 of the NASD's Conduct Rules. The Company also agrees that
proper disclosure of such arrangement or potential arrangement will be made in
the proxy statement which the Company will file for purposes of soliciting
stockholder approval for the Business Combination.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the
Underwriter copies of the Registration Statement, Preliminary Prospectuses, the
Prospectus, this
20
Agreement, the Listing Application; the filing fees of the Commission; the
filing fees and expenses (including legal fees and disbursements) incident to
securing any required review by the NASD of the terms of the sale of the Units;
the Listing Fee of the American Stock Exchange; the costs and expenses
(including without limitation any damages or other reasonable amounts payable in
connection with legal or contractual liability) associated with the reforming of
any contracts for sale of the Units made by the Underwriter caused by a breach
of the representation in Section 1(c); and all costs and expenses of the
Underwriter and BAI, including the fees and disbursements of counsel for the
Underwriter and BAI and any stamp duties, similar taxes or duties or other taxes
incurred by the Underwriter or BAI, in connection with the Directed Unit
Program. The Company shall not, however, be required to pay for any of the
Underwriter's expenses (other than those related to qualification under NASD
regulation) except that, if this Agreement shall not be consummated because the
conditions in Section 6 hereof are not satisfied, or because this Agreement is
terminated by the Underwriter pursuant to Section 10 hereof, or by reason of any
failure, refusal or inability on the part of the Company to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on its part to be performed, unless such failure, refusal or
inability is due primarily to the default or omission of the Underwriter, the
Company shall reimburse the Underwriter for reasonable documented out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Units or in
contemplation of performing their obligations hereunder; but the Company shall
not in any event be liable to the Underwriter for damages on account of loss of
anticipated profits from the sale by it of the Units.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
The obligation of the Underwriter to purchase the Firm Units
on the Closing Date and the Option Units, if any, on the Option Closing Date are
subject to the accuracy, as of the Applicable Time, the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company contained herein, and to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all
post-effective amendments thereto shall have become effective and the Prospectus
shall have been filed as required by Rules 424, 430A, 430C or 433 under the Act,
as applicable, within the time period prescribed by, and in compliance with, the
Rules and Regulations, and any request of the Commission for additional
information (to be included in the Registration Statement or otherwise) shall
have been disclosed to the Underwriter and complied with to its reasonable
satisfaction. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Act shall have
been instituted or, to the knowledge of the Company, shall be contemplated or
threatened by the Commission and no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the Units.
(b) The Underwriter shall have received on the
Closing Date or the Option Closing Date, as the case may be, the opinion of
Reitler Xxxxx & Xxxxxxxxxx LLC,
21
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriter (and stating that it may be relied
upon by counsel to the Underwriter) to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a corporation in
corporate good standing under the laws of the State of
Delaware, and has the corporate power and authority to own or
lease, as the case may be, its property and to conduct the
business as described in the Prospectus, and to execute,
deliver and perform this Agreement, the Trust Agreement and
the Warrant Agreement. The Company is duly qualified to do
business as a foreign corporation and is in good standing in
all jurisdictions in which the conduct of its business
requires such qualifications.
(ii) This Agreement, the Trust
Agreement, the Registration Rights Agreement, the Warrant
Purchase Agreement, the Subscription Agreements and the
Warrant Agreement have been duly authorized, executed and
delivered by the Company.
(iii) The authorized capital stock of the
Company consists of 250,000,000 shares of Common Stock and
25,000,000 shares of Preferred Stock, par value $.001 per
share ("Preferred Stock"). Immediately prior to the closing
under this Agreement, there are 3,125,000 shares of Common
Stock outstanding of record and no shares of Preferred Stock
issued and outstanding. All of such outstanding shares of
Common Stock are duly authorized, have been validly issued and
are fully paid and non-assessable.
(iv) Except as described in or
contemplated by the Registration Statement and the Prospectus,
there are no outstanding securities of the Company convertible
or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as
described in the Registration Statement and the Prospectus, no
holder of any securities of the Company or any other person
has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell
or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Securities or the right to have any
Common Securities or other securities of the Company included
in the Registration Statement or the right, as a result of the
filing of the Registration Statement, to require registration
under the Act of any shares of Common Stock or other
securities of the Company.
(v) The Common Stock included in the
Firm Units has been duly authorized and, when issued and paid
for by the Underwriter pursuant to this Agreement, will be
validly issued, fully paid and nonassessable. The shares of
Common Stock issuable upon exercise of the Warrants and the
Private Placement
22
Warrants have been duly authorized and, when issued and paid
for pursuant to the Warrants or the Private Placement
Warrants, as the case may be, will be validly issued, fully
paid and nonassessable.
(vi) The Warrants and the Private
Placement Warrants, when issued and paid for by the
Underwriter pursuant to this Agreement or the Warrant Purchase
Agreement as applicable, will constitute valid and binding
agreements 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 will be
enforceable against the Company in accordance with their
terms. The form of certificate representing the Common Stock
filed as an exhibit to the Registration Statement is in due
and proper form, satisfying the applicable requirements of the
DGCL, the Certificate of Incorporation, By-laws and the
applicable rules of the American Stock Exchange.
(vii) The execution, delivery and
performance of the Warrants and the Private Placement Warrants
have been duly authorized by all necessary corporate action on
the part of the Company. The Warrants and the Private
Placement Warrants have been duly executed and delivered by
the Company.
(viii) Each of the Warrant Agreement, the
Registration Rights Agreement, the Warrant Purchase Agreement,
the Subscription Agreements and the Trust Agreement
constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms.
The holders of outstanding shares of capital stock of the
Company are not entitled to preemptive rights to subscribe for
the Securities.
(ix) No consent, approval, authorization
or order of, or filing with, any governmental agency, public
body or any court of the State of New York, the State of
Delaware or of the United States of America is required under
New York Law, the DGCL or Federal Law for the execution,
delivery or performance of this Agreement, the Warrant
Agreement, the Warrants, the Private Placement Warrants or the
Trust Agreement by the Company, except (A) such as may be
required under state securities laws or (B) for the filing of
the Registration Statement with the Commission and the receipt
of the order of the Commission declaring such Registration
Statement effective (as noted in paragraph (xv) below, such
counsel has been informed orally by the Commission that it has
declared the Registration Statement effective).
(x) Upon delivery and payment of the
Firm Units on the Closing Date, the Company will not be
subject to Rule 419 under the Act and none of the Company's
outstanding securities will be deemed to be a xxxxx stock as
defined in Rule 3a-51-1 under the Exchange Act.
(xi) To such counsel's knowledge, there
is no action, suit or proceeding by or before any court or
other governmental agency, authority or
23
body or any arbitrator pending or overtly threatened against
the Company or its properties by a third party of a character
required to be disclosed in the Prospectus that is not
disclosed in the Prospectus as required by the Act and the
rules thereunder. To such counsel's knowledge, there is no
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan or other agreement or instrument of a
character required to be filed as an exhibit to the
Registration Statement, which is not filed as required by the
Act and the rules thereunder.
(xii) The execution, delivery and
performance by the Company of this Agreement, the Warrant
Agreement, the Registration Rights Agreement, the Warrant
Purchase Agreement, the Subscription Agreements, the Warrants,
the Private Placement Warrants or the Trust Agreement and
compliance by the Company with the provisions thereof and the
issuance and sale of the Securities pursuant to and in
accordance with the provisions of this Agreement will not (i)
result in a breach or default (or give rise to any right of
termination, cancellation or acceleration) under any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan or other agreement to which the Company is a
party or may be bound, and (ii) will not result in a breach or
violation of any of the provisions of the Certificate of
Incorporation or By-laws, the DCGL or any Federal Law or New
York Law, or, to such counsel's knowledge, any judgment,
order, writ, injunction or decree of any court or other
tribunal located in the State of New York or the State of
Delaware of which such counsel is are aware and that is
applicable to the Company.
(xiii) The Registration Statement, as of
its effective date, the Prospectus, as of its date, and the
Statutory Prospectus (other than the financial statements, the
notes thereto and the related schedules and other financial
and statistical information included therein or omitted
therefrom, as to which such counsel expresses no opinion)
complied as to form in all material respects with the
requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(xiv) Such counsel does not know of any
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are
fairly summarized in all material respects.
(xv) Such counsel has been informed by
the Commission that the Registration Statement was declared
effective under the Securities Act as of 4:00 p.m. EST on
February 28, 2007 (the "Time of Sale"). The Prospectus was
filed with the Commission in the manner and within the time
period required by Rule 424(b) under the Securities Act, on
[______], 2007. To such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose or pursuant to
24
Section 8A of the Act has been instituted or is pending or
threatened by the Commission.
(xvi) The statements in the Prospectus
under the captions "Description of Securities," "Federal
Income and Estate Tax Considerations" and "Certain
Relationships and Related Transactions," insofar as such
statements constitute summaries of the legal matters or
documents referred to therein, are accurate descriptions or
summaries in all material respects.
(xvii) The Company is not, and will not
become, as a result of the consummation of the transactions
contemplated by this Agreement, and application of the net
proceeds therefrom as described in the Prospectus, required to
register as an investment company under the 1940 Act.
In rendering such opinion Reitler Xxxxx & Xxxxxxxxxx LLC may
rely as to matters governed by the laws of states other than New York or Federal
laws on local counsel in such jurisdictions, provided that in each case Reitler
Xxxxx & Xxxxxxxxxx LLC shall state that they believe that they and the
Underwriter are justified in relying on such other counsel. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that (i) the Registration Statement, at the time it became effective
under the Act (including the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rules 430A and 430C under
the Act) and as of the Closing Date or the Option Closing Date, as the case may
be, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) the General Disclosure
Package, as of the Applicable Time, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (iii) the Prospectus, or any supplement thereto, on the date it
was filed pursuant to the Rules and Regulations and as of the Closing Date or
the Option Closing Date, as the case may be, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (except that such
counsel need express no view as to financial statements and schedules and other
financial data derived therefrom).
(c) The Underwriter shall have received from
Xxxxxxx XxXxxxxxx LLP, counsel for the Underwriter, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, such opinion or opinions,
dated the Closing Date and addressed to the Underwriter, with respect to the
issuance and sale of the Securities, the Registration Statement, the Statutory
Prospectus and the Prospectus (together with any supplement thereto) and other
related matters as the Underwriter may reasonably require, and the Company shall
have furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Underwriter shall have received, on each
of the date hereof, the Closing Date and, if applicable, the Option Closing
Date, a letter dated the date hereof, the Closing Date or the Option Closing
Date, as the case may be, in form and substance satisfactory
25
to the Underwriter, of Xxxxxx LLP confirming that they are an independent
registered public accounting firm with respect to the Company within the meaning
of the Act and the applicable Rules and Regulations and the PCAOB and stating
that in their opinion the financial statements and schedules examined by them
and included in the Registration Statement and the Prospectus comply in form in
all material respects with the applicable accounting requirements of the Act and
the related Rules and Regulations; and containing such other statements and
information as is ordinarily included in accountants' "comfort letters" to the
Underwriter with respect to the financial statements and certain financial and
statistical information contained in the Registration Statement and the
Prospectus.
(e) The Underwriter shall have received on the
Closing Date and, if applicable, the Option Closing Date, as the case may be, a
certificate or certificates of the Chairman and the Chief Financial Officer of
the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has
become effective under the Act and no stop order suspending
the effectiveness of the Registration Statement or no order
preventing or suspending the use of any Preliminary Prospectus
or the Prospectus has been issued, and no proceedings for such
purpose or pursuant to Section 8A of the Act have been
instituted or are, to his or her knowledge, contemplated or
threatened by the Commission;
(ii) The representations and warranties
of the Company contained in Section 1 hereof are true and
correct as of the Closing Date or the Option Closing Date, as
the case may be;
(iii) All filings required to have been
made pursuant to Rules 424, 430A or 430C under the Act have
been made as and when required by such rules;
(iv) He or she has carefully examined
the General Disclosure Package and, in his or her opinion, as
of the Applicable Time, the statements contained in the
General Disclosure Package did not contain any untrue
statement of a material fact, and such General Disclosure
Package did not omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) He or she has carefully examined
the Registration Statement and, in his or her opinion, as of
the effective date of the Registration Statement, the
Registration Statement and any amendments thereto did not
contain any untrue statement of a material fact and did not
omit to state a material fact necessary in order to make the
statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred
which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in
such supplement or amendment;
26
(vi) He or she has carefully examined
the Prospectus and, in his or her opinion, as of its date and
the Closing Date or the Option Closing Date, as the case may
be, the Prospectus and any amendments and supplements thereto
did not contain any untrue statement of a material fact and
did not omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and
(vii) Since the respective dates as of
which information is given in the Registration Statement and
Prospectus, there has not been any material adverse change or
any development involving a prospective material adverse
change in or affecting the business, management, properties,
assets, rights, operations, condition (financial or otherwise)
or prospects of the Company, whether or not arising in the
ordinary course of business.
(f) The Company shall have furnished to the
Underwriter such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Underwriter may reasonably have requested.
(g) The Firm Units and Option Units, if any,
have been duly listed, subject to notice of issuance, on the American Stock
Exchange.
(h) The NASD has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Underwriter and to Xxxxxxx
XxXxxxxxx LLP, counsel for the Underwriter.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriter hereunder may be terminated
by the Underwriter by notifying the Company of such termination in writing, by
telephone or facsimile at or prior to the Closing Date or the Option Closing
Date, as the case may be.
In such event, the Company and the Underwriter shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion
of the Units required to be delivered as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
27
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless the
Underwriter and BAI and each person who controls the
underwriter or BAI, if any, who controls the Underwriter
within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or any prospectus wrapper material
distributed in any jurisdiction in connection with the
reservation and sale of Directed Units for the DSP
Participants or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement
or alleged untrue statement, or omission or alleged omission
made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement,
in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter
specifically for use therein, it being understood and agreed
that the only such information furnished by the Underwriter
consists of the information described as such in Section 12
herein; and
(2) to reimburse the Underwriter and
each such controlling person upon demand for any legal or
other out-of-pocket expenses reasonably incurred by the
Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or
liability, action or proceeding or in responding to a subpoena
or governmental inquiry related to the offering of the
Securities, whether or not the Underwriter or controlling
person is a party to any action or proceeding. In the event
that it is finally judicially determined that the Underwriter
was not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Underwriter will
promptly return all sums that had been advanced pursuant
hereto.
(b) The Underwriter will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
28
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and will reimburse any legal or other expenses reasonably incurred
by the Company or any such director, officer, or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that the Underwriter will be
liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Underwriter specifically
for use therein, it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in
Section 12 herein. This indemnity agreement will be in addition to any liability
which the Underwriter may otherwise have.
(c) In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), (b) or (d) shall be available to
any party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a), (b) or (d). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. Notwithstanding the foregoing, it is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the Underwriter
in the case of parties indemnified pursuant to Section 8(a) or 8(d) and by the
Company in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
29
agrees to indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. In addition, the indemnifying party
will not, without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding of which indemnification may be sought hereunder
(whether or not any indemnified party is an actual or potential party to such
claim, action or proceeding) unless such settlement, compromise or consent (x)
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action 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.
(d) In connection with the offer and sale of the
Directed Units, the Company agrees, promptly upon a request in writing, to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses,
liabilities, claims, damages and expenses incurred by it as a result of the
failure of the DSP Participants to pay for and accept delivery of Directed Units
which, by 8:00 A.M. New York City time on the first business day after the date
of this Agreement, were subject to a properly confirmed agreement to purchase.
The Company agrees to indemnify and hold harmless BAI, its directors, officers,
employees and agents, and each person, if any, who controls BAI within the
meaning of the Securities Act or the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which BAI, or any such director,
officer, employee, agent or controlling person may become subject, which (i) is
caused by any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to DSP Participants in connection with the Directed Unit Program or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) is caused by the failure of any DSP Participant to pay for and
accept delivery of Directed Units that such DSP Participant agreed to purchase;
(iii) arises out of or is based upon the violation of any applicable laws or
regulations of foreign jurisdictions where Directed Units have been offered, or
(iv) is related to, arising out of, or in connection with the Directed Unit
Program, other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the
willful misconduct, bad faith or gross negligence of BAI. The indemnity
agreement set forth in this paragraph shall be in addition to any liabilities
that the Company may otherwise have. Notwithstanding anything contained herein
to the contrary, if indemnification may be sought pursuant to this Section 8(d),
then in addition to such separate counsel as may be provided for the indemnified
parties pursuant to this Section 8, the indemnifying party shall be liable for
the reasonable fees and expenses of not more than one separate firm (in addition
to one local counsel) for BAI, the directors, officers, employees and agents of
BAI, and all persons, if any, who control BAI within the meaning of either the
Securities Act or the Exchange Act for the defense of any losses, claims,
damages or liabilities arising out the Directed Unit Program.
(e) To the extent the indemnification provided
for in this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a), (b) or (d) above in respect of any losses,
claims, damages or liabilities (or
30
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault 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 on the one hand or the
Underwriter on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this Section 8(e) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8(e). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) the Underwriter shall
not be required to contribute any amount in excess of the underwriting discounts
and commissions applicable to the Securities purchased by the Underwriter, and
(ii) no person guilty of 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.
(f) In any proceeding relating to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
supplement or amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the jurisdiction of any court
having jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon it by any other contributing party
and consents to the service of such process and agrees that any other
contributing party may join it as an additional defendant in any such proceeding
in which such other contributing party is a party.
(g) Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section 8
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of
31
the Underwriter or any person controlling the Underwriter, the Company, its
directors or officers or any persons controlling the Company, (ii) acceptance of
any Securities and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriter, or any person controlling the
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telecopied and
confirmed as follows: if to the Underwriter, to Banc of America Securities LLC,
00 X. 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Syndicate
Manager, with a copy to Banc of America Securities LLC, 00 X. 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; if to the Company,
to Xxxxxxxxx Ventures Ltd., 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000, with a
copy to Reitler Xxxxx & Xxxxxxxxxx LLC, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxxx Xxxxxx Xxxxx.
10. TERMINATION.
This Agreement may be terminated by the Underwriter by notice
to the Company (a) at any time prior to the Closing Date or any Option Closing
Date (if different from the Closing Date and then only as to Option Units) if
any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company, whether or not arising in
the ordinary course of business, (ii) any outbreak or escalation of hostilities
or declaration of war or national emergency or other national or international
calamity or crisis if the effect of such outbreak, escalation, declaration,
emergency, calamity or crisis on the financial markets of the United States
would, in the Underwriter's judgment, make it impracticable or inadvisable to
market the Units or to enforce contracts for the sale of the Units, (iii) any
material change in economic or political conditions, if the effect of such
change on the financial markets of the United States would, in the Underwriter's
judgment, make it impracticable or inadvisable to market the Units or to enforce
contracts for the sale of the Units or (iv) suspension of trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange, (v) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in the
Underwriter's opinion materially and adversely affects or may materially and
adversely affect the business or operations of the Company, (vi) the declaration
of a banking moratorium by United States or New York State authorities, (vii)
any downgrading, or placement on any watch list for possible downgrading, in the
rating of any of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Exchange Act); (viii) the suspension of trading of the Company's common
stock by the American Stock Exchange, the
32
Commission, or any other governmental authority or, (ix) the taking of any
action by any governmental body or agency in respect of its monetary or fiscal
affairs which in the Underwriter's reasonable opinion has a material adverse
effect on the securities markets in the United States; or
(b) as provided in Section 6 of this Agreement.
11. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriter and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Securities from the Underwriter
shall be deemed a successor or assign merely because of such purchase.
12. INFORMATION PROVIDED BY UNDERWRITER.
The Company and the Underwriter acknowledge and agree that the
only information furnished or to be furnished by the Underwriter to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus consists of the information set forth in the third and tenth
paragraphs under the caption "Underwriting" in the Prospectus.
13. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of the
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, and (c) delivery of and payment for the Securities
under this Agreement.
The Company acknowledges and agrees that the Underwriter in
providing investment banking services to the Company in connection with the
offering, including in acting pursuant to the terms of this Agreement, has acted
and is acting as an independent contractor and not as a fiduciary and the
Company does not intend the Underwriter to act in any capacity other than as an
independent contractor, including as a fiduciary or in any other position of
higher trust.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, including, without
limitation, Section 5-1401 of the New York General Obligations Law.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
33
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the Underwriter in accordance with its terms.
Very truly yours,
XXXXXXXXX VENTURES LTD.
By___________________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BANC OF AMERICA SECURITIES LLC
By: Banc of America Securities LLC
By _____________________________________
Authorized Officer
By _____________________________________
Authorized Officer
34
SCHEDULE I
PRICE AND OTHER TERMS OF THE OFFERING CONVEYED ORALLY
35
EXHIBIT A
Xxxxxxxxx Ventures Ltd.
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to the Final Prospectus of Xxxxxxxxx Ventures Ltd. (the
"Company"), dated ___, 2007 (the "Prospectus"). Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the
Prospectus.
We have read the Prospectus and understand that Company has established the
Trust Account, initially in an amount of $___ for the benefit of the Public
Stockholders and that Company may disburse monies from the Trust Account only
(i) to the Public Stockholders in the event of the redemption of their shares or
the liquidation of Company or (ii) to Company after it consummates an initial
Business Combination.
For and in consideration of Company agreeing to evaluate the undersigned for
purposes of consummating an initial Business Combination 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 (the "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 Company and will not seek
recourse against the Trust Account for any reason whatsoever.
___________________________________________
Print Name of Target Business
___________________________________________
Authorized Signature of Target Business
EXHIBIT B
Xxxxxxxxx Ventures Ltd.
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to the Final Prospectus of Xxxxxxxxx Ventures Ltd. (the
"Company"), dated ___, 2007 (the "Prospectus"). Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the
Prospectus.
We have read the Prospectus and understand that Company has established the
Trust Account, initially in an amount of $___ for the benefit of the Public
Stockholders and that Company may disburse monies from the Trust Account only:
(i) to the Public Stockholders in the event of the redemption of their shares or
the liquidation of Company; or (ii) to Company after it consummates an initial
Business Combination.
For and in consideration of Company engaging 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 (the "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 Company and will not seek
recourse against the Trust Account for any reason whatsoever.
___________________________________
Print Name of Vendor
___________________________________
Authorized Signature of Vendor
