Chart Acquisition Corp. C/o Chart Acquisition Group LLC 75 Rockefeller Center, 14th Floor New York, New York, 10019
Exhibit 10.4
Chart Acquisition Corp.
C/o Chart Acquisition Group LLC
00 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
C/o Chart Acquisition Group LLC
00 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
August 9, 2011
Chart Acquisition Group LLC
00 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
00 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
We are pleased to accept the offer
Chart Acquisition Group LLC (the “Subscriber” or “you”) has made to purchase 2,875,000 shares of common stock (the
“Shares”), $.0001 par value per share (the “Common Stock”), up to 375,000 of which are subject to complete or partial
forfeiture by you if the underwriters of the initial public offering (“IPO”) of Chart Acquisition Corp., a Delaware corporation (the
“Company”), do not fully exercise their over-allotment option (the “Over-allotment Option”). The terms (this
“Agreement”) on which the Company is willing to sell the Shares to the Subscriber, and the Company and the Subscriber’s
agreements regarding such Shares, are as follows:
1. Purchase of Common
Stock. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash, the Company hereby sells
and issues the Shares to the Subscriber, and the Subscriber hereby purchases the Shares from the Company, subject to forfeiture, on the terms and
subject to the conditions set forth in this Agreement. Concurrently with the Subscriber’s execution of this Agreement, the Company is delivering
to the Subscriber a certificate registered in the Subscriber’s name representing the Shares (the “Original Certificate”), receipt
of which the Subscriber hereby acknowledges.
2. Representations,
Warranties and Agreements.
2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby represents and
warrants to the Company and agrees with the Company as follows:
2.1.1. No Government
Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation or endorsement of
the offering of the Shares.
2.1.2. No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby do not
violate, conflict with or constitute a default under (i) the formation and governing documents of the Subscriber, (ii) any agreement, indenture or
instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement,
order, judgment or decree to which the Subscriber is subject.
2.1.3. Organization and
Authority. The Subscriber is a Delaware limited liability company, validly existing and in good standing under the laws of Delaware and possesses
all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by you, this
Agreement is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’
rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).
2.1.4. Experience,
Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the
investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares
have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption
from such registration is available. Subscriber has substantial experience in evaluating and investing in transactions of securities in companies
similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its
own interests. Subscriber must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration statement
under the Securities Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able to bear the economic risks of
an investment in the Shares and to afford a complete loss of Subscriber’s investment in the Shares.
2.1.5. Access to
Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask questions of and
receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and
prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained. In determining
whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge and understanding of the Company and its business
based upon Subscriber’s own due diligence investigation and the information furnished pursuant to this paragraph. Subscriber understands that no
person has been authorized to give any information or to make any representations which were not furnished pursuant to this Section 2 and Subscriber
has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its
operations and/or its prospects.
2.1.6. Regulation D
Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated hereby is being made in reliance on a
private placement exemption to “accredited investors” within the meaning of Section 501(a) of Regulation D under the Securities Act or
similar exemptions under state law.
2.1.7. Investment
Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and not for the account or
benefit of any other person, and not with a view towards the distribution or dissemination thereof and the Subscriber has no present arrangement to
sell the interest in the Shares to or through any person or entity. The Subscriber did not decide to enter into this Agreement as a result of any
general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.
2.1.8. Restrictions on
Transfer; Shell Company. Subscriber understands the Shares will be “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act and Subscriber understands that the certificates representing the Shares will contain a legend in respect of such restrictions. If in
the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise
transferred only pursuant to: (i) registration under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if
any transfer of its Shares or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to
deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not to resell the
Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to the Subscriber for the resale of
the Shares until one year following consummation of the initial business combination of the Company, despite technical compliance with the requirements
of Rule 144 and the release or waiver of any contractual transfer restrictions.
2.1.9. No Governmental
Consents. No governmental, administrative or other third party consents or approvals are required, necessary or appropriate on the part of
Subscriber in connection with the transactions contemplated by this Agreement.
2.2 Company’s
Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares, the Company hereby represents and warrants to the
Subscriber and agrees with the Subscriber as follows:
2.2.1 Organization and
Corporate Power. The Company is a Delaware corporation and is qualified to do business in every jurisdiction in which the failure to so qualify
would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.
2.2.2. No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not violate,
conflict with or constitute a default under (i) the Certificate of Incorporation or Bylaws of the Company, (ii) any agreement, indenture or instrument
to which the Company is a party or (iii) any law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or
decree to which the Company is subject.
2.2.3. Title to
Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Shares will be duly and validly issued, fully paid and
nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof the Subscriber will have or receive good title to the
Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder
and other agreements to which the Shares may be subject, (b) transfer restrictions under federal and state securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.
2.2.4. No Adverse
Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company which: (i) seek to
restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question the validity or
legality of any transactions or seeks to recover damages or to obtain other relief in connection with any transactions.
3. Forfeiture of
Shares.
3.1. Partial or No
Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the representative of the underwriters of the
Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that it shall forfeit any and all rights to such number of Shares
(up to an aggregate of 375,000 Shares and pro rata based upon the percentage of the Over-allotment Option exercised) such that immediately following
such forfeiture, the Subscriber (and all other initial shareholders prior to the IPO, if any) will own an aggregate number of Shares (not including
Shares issuable upon exercise of any warrants or any Common Stock purchased by Subscriber in the Company’s IPO or in the aftermarket) equal to 20%
of the issued and outstanding Common Stock immediately following the IPO.
3.2. Stock Price
Target. In the event the trading price of the Common Stock do not exceed certain price targets subsequent to the Company’s initial business
combination, Subscriber acknowledges and agrees that it shall forfeit any and all rights to a portion of the Shares as set forth
below:
(a) in the event the last
sale price of the Common Stock does not equal or exceed $11.50 per share (as adjusted for stock splits, share dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 24 months following the closing of the
Company’s initial business combination, Subscriber shall forfeit any and all rights to 312,250 of the Shares (or 359,375 of the Shares if the
Over-allotment Option is exercised in full) or ; and
(b) in the event the last
sale price of the Common Stock does not equal or exceed $13.50 per share (as adjusted for stock splits, share dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 60 months following the closing of the
Company’s initial business combination, Subscriber shall forfeit any and all rights to 312,250 of the Shares (or 359,375 of the Shares if the
Over-allotment Option is exercised in full), in addition to any Shares forfeited pursuant to Section 3.1 herein.
3.4. Termination of
Rights as Shareholder. If any of the Shares are forfeited in accordance with this Section 3, then after such time the Subscriber (or successor in
interest), shall no longer have any rights as a holder of such Shares, and the Company shall take such action as is appropriate to cancel such
Shares.
3.5. Share Certificates;
Stop Transfer Order. In the event an adjustment to the Original Certificate is required pursuant to this Section 3, then the Subscriber shall
return such Original Certificate to the Company or its designated agent as soon as practicable upon its receipt of notice from the Company advising
Subscriber of such adjustment, following which a new certificate (the “New Certificate”) shall be issued in such amount representing
the adjusted number of Shares held by the Subscriber. The New Certificate shall be returned to the Subscriber as soon as practicable.
4. Waiver of Liquidation
Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and all
right, title, interest or claim of any kind in or to any distributions by the Company from the Trust Account which will be established for the benefit
of the Company’s public shareholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust
Account”), in the event of a liquidation of the Company upon the Company’s failure to timely complete a Business Combination. For purposes of
clarity, in the event the Subscriber purchases Common Stock in the IPO or in the aftermarket, any additional Common Stock so purchased shall be
eligible to receive any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any Shares into
funds held in the Trust Account upon the successful completion of a Business Combination.
5. Restrictions on
Transfer.
5.1. Securities Law
Restrictions. In addition to any restrictions contained in that certain letter agreement (commonly known as an “Insider Letter”)
dated as of the closing of the IPO by and between Subscriber and the Company. Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise
dispose of all or any part of the Shares unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and
applicable state securities laws with respect to the Shares proposed to be transferred
shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws.
5.2 Restrictive
Legends. All certificates representing the Shares shall have endorsed thereon legends substantially as follows:
| “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.” |
| “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.” |
5.3. Additional Shares or
Substituted Securities. In the event of the declaration of a share dividend, the declaration of an extraordinary dividend payable in a form other
than Common Stock, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the
Company’s outstanding Common Stock without receipt of consideration, any new, substituted or additional securities or other property which are by
reason of such transaction distributed with respect to any Shares subject to this Section 5 or into which such Shares thereby become convertible shall
immediately be subject to this Section 5 and Section 3.3. Appropriate adjustments to reflect the distribution of such securities or property shall be
made to the number and/or class of Shares subject to this Section 5 and Section 3.3.
5.4 Registration
Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements of the Securities
Act and will become freely tradable only after certain conditions are met or they are registered pursuant to a Registration Rights Agreement to be
entered into with the Company prior to the closing of the IPO.
6. Other
Agreements.
6.1. Further
Assurances. Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary to carry out the
intent of this Agreement.
6.2. Notices. All
notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent
by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing,
(ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party
and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be
designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if
delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business
day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
6.3. Entire
Agreement. This Agreement, together with that certain letter agreement between Subscriber and the Company, substantially in the form filed as an
exhibit to the Registration Statement, embodies the entire agreement and understanding between the Subscriber and the Company with respect to the
subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
6.4. Modifications and
Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties
hereto.
6.5. Waivers and
Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a
waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such
waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.
6.6. Assignment. The
rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the other
party.
6.7. Benefit. All
statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the
benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement shall be construed to create any rights or
obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.
6.8. Governing Law.
This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of New York,
without giving effect to the conflict of law principles thereof.
6.9. Severability. In
the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and effect. In the event that such court shall deem any such provision, or portion thereof,
wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.
6.10. No Waiver of
Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of
dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The
election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or
demand on a party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action
in any circumstances without such notice or demand.
6.11. Survival of
Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any other agreement,
certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations made by or on
behalf of the parties.
6.12. No Broker or
Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant has acted on its
behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability on the other. Each of the
parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission or other compensation by any broker, finder,
financial consultant or similar agent claiming to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in
defending against any such claim.
6.13. Headings and
Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify
or affect the meaning or construction of any of the terms or provisions hereof.
6.14. Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature
shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such signature page were an original thereof.
6.15. Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or
disfavoring any party hereto because of the authorship of any provision of this Agreement. The words “include,”
“includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns
in
masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
6.16. Mutual
Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
7. Voting and Tender of
Shares. Subscriber agrees to vote the Shares in favor of a Business Combination that the Company negotiates and submits for approval to the
Company’s shareholders and shall not seek redemption with respect to such Shares. Additionally, the Subscriber agrees not to tender any Shares in
connection with a tender offer presented to the Company’s shareholders in connection with a Business Combination negotiated by the
Company.
8. Indemnification.
Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of
such party’s breach of any representation, warranty, covenant or agreement in this Agreement.
If the foregoing accurately sets forth
our understanding and agreement, please sign the enclosed copy of this Agreement and return it to us.
Very truly yours,
By: |
/s/ Xxxxxxx XxXxxxxxx Name: Xxxxxxx XxXxxxxxx Title: Chief Financial Officer |
Accepted and agreed this
August 9, 2011
August 9, 2011
CHART ACQUISITION GROUP LLC
a Delaware limited liability company
a Delaware limited liability company
By THE CHART GROUP L.P., a Delaware limited
partnership,
as the managing member of Chart Acquisition Group LLC
as the managing member of Chart Acquisition Group LLC
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xxxxxxxxxxx X. Xxxxx
Title: Manager
Title: Manager
