UNIT SUBSCRIPTION AGREEMENT
This
UNIT
SUBSCRIPTION AGREEMENT (this “Agreement”)
is
made as of February 20, 2008, by and between Transformation Capital Corporation,
a Delaware corporation (the “Company”),
and
Xxxxxxx Xxxxxx, Xxxxxx Xxxxx Xx. and Xxxxxx Xxxxxx (the “Purchasers”).
WHEREAS,
the Company is proposing to file a registration statement (the “Registration
Statement”)
on
Form S-1 under the Securities Act of 1933, as amended (the “Securities
Act”)
with
the Securities and Exchange Commission in connection with a proposed initial
public offering (the “Initial
Public Offering”)
of
15,000,000 units (“Units”),
each
consisting of one share of common stock of the Company, par value $0.0001 per
share (“Common
Stock”),
and
one warrant to purchase one additional share of Common Stock for $7.50, and,
at
the election of the underwriters for the Initial Public Offering (the
“Underwriters”),
up to
an additional 2,250,000 Units to cover over-allotments, in each case subject
to
the terms and conditions set forth in the Registration Statement;
and
WHEREAS,
in order to capitalize the Company prior to the Initial Public Offering, the
Company desires to issue and sell, and the Purchasers desire to subscribe for,
purchase and acquire, certain Founder Units (as defined below) on the terms
and
conditions hereinafter set forth.
NOW,
THEREFORE, for and in consideration of the promises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Purchase
and Sale of Units. Each
Purchaser hereby, severally and not jointly, subscribes for and purchases from
the Company, and the Company hereby issues and sells to each Purchaser, the
number of units (the “Founder
Units”)
set
forth opposite their respective names in Schedule I hereto at a purchase price
of $0.0057971 per Founder Unit for an aggregate purchase price of
$25,000. Each Founder Unit consists of one share of Common Stock and
one warrant (a “Warrant”)
to
purchase one additional share of Common Stock for $7.50 in accordance with
the
terms of a warrant agreement (the “Warrant
Agreement”)
to be
entered into by and between the Company and Continental Stock Transfer &
Trust Company or such other warrant agent as may be selected by the Company
(the
“Warrant
Agent”),
which
Warrant Agreement shall contain such provisions with regard to the Warrants
as
are contained in the Registration Statement and such other terms as are typical
in warrant agreements of blank check companies. The Founder Units,
together with the underlying Common Stock and Warrants, are referred to herein
as the “Securities”.
2. Closing
of Purchase and Sale. The
closing of the purchase and sale of the Founder Units shall take place at the
offices of the Company immediately following the execution of this
Agreement. At the closing, the Company shall deliver to each
Purchaser a certificate evidencing the Founder Units purchased by such
Purchaser, registered in the Purchaser’s name, upon the payment of the aggregate
purchase price therefor in immediately available funds by delivery of a cashiers
check or by wire transfer to an account designated by the Company.
3. Redemption
of Units. If
and to the extent that the Underwriters do not exercise in full their option
to
purchase up to 2,250,000 Units to cover over-allotments (as described in the
Registration Statement) prior to the expiration or termination of such option,
the Purchasers shall forfeit and the Company shall redeem, for no consideration,
up to 562,500 Founder Units from the holders thereof on a pro rata basis in
an
amount sufficient to cause the number of shares of Common Stock underlying
the
outstanding Founder Units held by the Purchasers and their permitted transferees
to equal 20% of the Company’s then-outstanding Common Stock after giving effect
to the Initial Public Offering (without giving effect to any Units purchased
by
the Purchaser or any such transferees in the Initial Public Offering) and the
exercise, if any, of the Underwriters’ over-allotment option. The parties shall
give effect to this mandatory forfeiture and redemption of Founder Units within
ten business days following the earlier to occur of the expiration or
termination of the Underwriters’ over-allotment option. If the
Underwriters exercise their over-allotment option in full, the Founders and
their permitted transferees shall have no obligation to forfeit any of the
Founder Units and the Company shall have no right or obligation to redeem any
of
the Founder Units.
4. Restrictive
Legends. (a)
All certificates representing the Founder Units shall have endorsed thereon
the
following legends:
(a) “The
securities represented by this Certificate have not been registered under the
Securities Act of 1933, as amended. The securities may not be sold,
offered for sale, pledged or hypothecated in the absence of an effective
registration statement as to the securities under the Securities Act or an
opinion of counsel satisfactory to the Company that such registration statement
is not required.”
(b) “Some
of the securities represented by this Certificate may be subject to redemption
pursuant to Section 3 of the Unit Subscription Agreement, dated as of February
19, 2008, between the Company and the Purchasers
specified therein.”
(c) Any
legend required pursuant to the terms of the Warrant Agreement.
(d) Any
legend required by state securities or blue sky laws or
regulations.
(b) The
Company will cause any legends that may be required to be endorsed on the
certificates representing the Founder Units pursuant to the terms of this
Agreement after the date such certificates are issued to be so endorsed on
such
certificates (or to issue new certificates properly endorsed to the holders
thereof to replace the certificates then held by such holders), and the Founders
and their permitted transferees agree to take such actions as may be required
by
the Company to enable the Company to so endorse such certificates or to so
replace such existing certificates with new certificates properly
endorsed.
5. Investment
Representations. In
connection with the purchase of the Securities, each of the Purchasers,
severally and not jointly, represents and warrants to the Company the
following:
(a) Such
Purchaser is familiar with the Company’s business plans and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. Such Purchaser
has been afforded the opportunity to ask questions of the executive officers
and
directors of the Company. Such Purchaser understands that its
investment in the Securities involves a high degree of risk. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to such
Purchaser’s acquisition of the Securities. Such Purchaser has such
knowledge and expertise in financial and business matters, knows of the high
degree of risk associated with investments generally and particularly
investments in the securities of companies in the development stage such as
the
Company, is capable of evaluating the merits and risks of an investment in
the
Securities, and is able to bear the economic risk of an investment in the
Securities in the amount contemplated hereunder. Such Purchaser
understands that there presently is no public market for the securities and
none
is anticipated to develop in the foreseeable future. Such Purchaser
can afford a complete loss of its investment in the Securities. Such
Purchaser is purchasing the Securities for investment for such Purchaser’s own
account only and not with a view to, or for resale in connection with, any
“distribution” thereof within the meaning of the Securities Act; provided,
however,
that
the Company acknowledges that certain of the Founder Units may ultimately be
purchased by certain directors of the Company and certain other permitted
transferees identified by the Purchasers to the Company; but further provided
that
such directors and/or such permitted transferees shall make the same
representations and warranties as are contained in this Agreement and any
agreement with the directors and/or such permitted transferees shall include
the
same terms and conditions as are contained in this Agreement.
(b) Such
Purchaser understands that the Securities have not been registered under the
Securities Act or any state securities law by reason of a specific exemption
therefrom, and that the Company is relying on the truth and accuracy of, and
such Purchaser’s compliance with, the representations and warranties and
agreements of such Purchaser set forth herein to determine the availability
of
such exemptions and the eligibility of such Purchaser to acquire such
Securities, including, but not limited to, the bona fide
nature
of such Purchaser’s investment intent as expressed herein.
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(c) Such
Purchaser further acknowledges and understands that the Securities must be
held
indefinitely unless the Securities are subsequently registered under the
Securities Act or an exemption from such registration is
available. Such Purchaser understands that the certificates
evidencing the Securities will be imprinted with a legend that prohibits the
transfer of the Securities unless the Securities are registered or such
registration is not required in the opinion of counsel for the
Company.
(d) Such
Purchaser represents that it is an “accredited investor” as that term is defined
in Rule 501 of Regulation D promulgated under the Securities Act.
(e) Such
Purchaser has all necessary power and authority to enter into this Agreement
and
to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by such Purchaser. This
Agreement constitutes the valid, binding and enforceable obligation of such
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter
in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or
in equity). The purchase by such Purchaser of the Securities does not
conflict with any material contract by which such Purchaser or its property
is
bound, or any laws or regulations or decree, ruling or judgment of any court
applicable to such Purchaser or its property.
(f) Such
Purchaser did not decide to enter into this Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502(c) of the
Securities Act.
(g) Such
Purchaser understands that no U.S. federal or state agency or any other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities, nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
6. Company
Representations and Warranties. In
connection with the issuance and sale of the Securities, the Company hereby
represents and warrants to the Purchasers the following:
(a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and the Company has all
necessary corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate action
necessary to be taken by the Company to authorize the execution, delivery and
performance of this Agreement and all other agreements and instruments delivered
by the Company in connection with the transactions contemplated hereby has
been
duly and validly taken and this Agreement has been duly executed and delivered
by the Company. This Agreement constitutes the valid, binding and
enforceable obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity). The issuance and sale
by the Company of the Securities does not conflict with the certificate of
incorporation or by-laws of the Company or any material contract by which the
Company or its property is bound, or any federal or state laws or regulations
or
decree, ruling or judgment of any United States or state court applicable to
the
Company or its property.
(b) The
Founder Units and the Common Stock and Warrants underlying the Founder Units
have been duly authorized and, when issued, delivered and paid for in accordance
with this Agreement, the Common Stock underlying such Founder Units will be
validly issued, fully paid and non-assessable and will be free and clear of
all
liens and claims. The shares of Common Stock issuable upon exercise
of the Warrants have been duly authorized and, when issued, delivered and paid
for in accordance with the terms of the Warrant Agreement, will be validly
issued, fully paid and non-assessable and will be free and clear of all liens
and claims.
7. Miscellaneous.
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(a) Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to the principles of conflicts of law
thereof.
(b) Further
Execution. The
parties agree to take all such further action as may reasonably be necessary
to
carry out and consummate this Agreement as soon as practicable, and to take
whatever steps may be necessary to obtain any governmental approval in
connection with or otherwise qualify the issuance of the Securities that are
the
subject of this Agreement.
(c) Amendment. This
Agreement may not be amended, modified or waived, in whole or in part, except
by
an agreement in writing signed by each of the parties hereto.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
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COMPANY:
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TRANSFORMATION
CAPITAL CORPORATION
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxx
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Title:
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President
and Chief Executive Officer
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PURCHASERS:
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Xxxxxxx
Xxxxxx
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxx
Xxxxx Xx.
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/s/
Xxxxxx Xxxxx Xx.
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Xxxxxx
Xxxxxx
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/s/
Xxxxxx Xxxxxx
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SCHEDULE
I
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Purchaser
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Number
of Founder
Units
to be Purchased
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Xxxxxxx
Xxxxxx
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1,437,500
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Xxxxxx
Xxxxx Xx.
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1,437,500
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Xxxxxx
Xxxxxx
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1,437,500
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Total
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4,312,500
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