Exhibit 10.19
SUPPLEMENTAL WARRANT PURCHASE AGREEMENT
WARRANT PURCHASE AGREEMENT (this "AGREEMENT"), dated as of February ____,
2007, is entered into by and among Xxxxxxxxx Ventures Ltd., a Delaware
corporation (the "COMPANY"), and Xxxxxxxxx Capital Partners LLC, a Delaware
limited liability company ("SPONSOR").
WHEREAS:
A. The Company has filed a registration statement (the "REGISTRATION
STATEMENT") for the initial public offering (the "IPO") of units (the "UNITS"),
each unit consisting of one share of the Company's Common Stock (a "SHARE") and
one four year warrant (the "WARRANTS") to purchase one Share at an exercise
price of $6.00 per Share exercisable on the later of the Company's completion of
a business combination and one year from the date of the IPO.
B. The Company and Sponsor are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) and by Regulation D ("REGULATION D") promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 Act"); and
C. Sponsor and the Company desire to enter into this Agreement whereby
Sponsor will acquire warrants to purchase 1,000,000 shares of the Company's
Common Stock (each a "SPONSOR WARRANT") for an aggregate purchase price of One
Million Dollars ($1,000,000) (the "SPONSOR PURCHASE PRICE"), each to purchase
one share of Common Stock (each a "WARRANT SHARE") on the terms and conditions
described herein.
NOW THEREFORE, the Company and Sponsor hereby agree as follows:
1. PURCHASE AND SALE OF SPONSOR WARRANTS.
(a) PURCHASE OF SPONSOR WARRANTS. On the Closing Date (as defined
below), the Company shall issue and sell to Sponsor and Sponsor shall purchase
from the Company the Sponsor Warrants for the Sponsor Purchase Price.
(b) FORM OF PAYMENT. On the Closing Date (as defined below), (i)
Sponsor shall pay the Sponsor Purchase Price for the Sponsor Warrants by wire
transfer of immediately available funds to the Company, in accordance with the
Company's written wiring instructions, against delivery of the Sponsor Warrants,
and (ii) immediately prior to the closing of the IPO, the Company shall deposit
the Sponsor Purchase Price into the trust account described in the Registration
Statement (the "TRUST ACCOUNT").
(c) CLOSING DATE. Subject to the satisfaction (or written waiver) of
the conditions thereto set forth in Section 6 and Section 7 below, the date and
time of the issuance and sale of the Sponsor Warrants pursuant to this Agreement
(the "CLOSING DATE") shall be no later than 12:00 noon, Eastern Standard Time on
the date (the "CLOSING DATE") that the Company enters into an underwriting
agreement with the underwriter for the IPO. The closing of the
transactions contemplated by this Agreement (the "CLOSING") shall occur on the
Closing Date at such location as may be agreed to by the parties.
2. SPONSOR REPRESENTATIONS AND WARRANTIES.
(a) Sponsor represents and warrants to the Company as follows:
(i) Sponsor is purchasing the Sponsor Warrants for its own
account and for investment purposes and not with the view towards distribution;
(ii) Sponsor acknowledges that the Sponsor Warrants, and the
Warrant Shares issued upon exercise of the Sponsor Warrants, will bear a legend
in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN OFFERED AND SOLD IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933 AS AMENDED (THE
"SECURITIES ACT"). ACCORDINGLY, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT AND MAY NOT
BE TRANSFERRED OTHER THAN PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
(iii) Sponsor understands that the Sponsor Warrants are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of Federal and State securities laws and that the Company is
relying upon the truth and accuracy of the representations, warranties and
agreement herein in order to determine the applicability of such exemptions and
the suitability of Sponsor to acquire the Sponsor Warrants;
(iv) Sponsor acknowledges that, in making the decision to
purchase the Sponsor Warrants, Sponsor has relied solely upon independent
investigations made by it and materials provided by the Company and not upon any
separate representations made by the Company with respect to the Company or the
Sponsor Warrants;
(v) Sponsor has had a reasonable opportunity to ask questions of
and receive answers from the Company concerning the Company and this offering
and all such questions, if any, have been answered to the full satisfaction of
Sponsor;
(vi) Sponsor has such knowledge and expertise in financial and
business matters that the undersigned is capable of evaluating the merits and
risks involved in an investment in the Sponsor Warrants; and
(vii) Each of Sponsor and its equity holders is an accredited
investor as such term is defined in Rule 501 of Regulation D.
(b) NO GOVERNMENT RECOMMENDATION OR APPROVAL. Sponsor understands
that no Federal or State agency has passed on or made any recommendation or
endorsement of the Sponsor Warrants.
(c) STATUS OF SPONSOR WARRANTS. Sponsor acknowledges that:
(i) The Sponsor Warrants will be subject to a lock-up as
referred to in the Registration Statement. Subject to certain limited
exceptions, the Sponsor Warrants are not transferable until the closing of the
initial business combination as described in the Registration Statement.
(ii) In the event that the Company distributes to its public
shareholders the amount in the trust account as described in the Registration
Statement pursuant to the dissolution of the Company, Sponsor will lose its
entire investment as Sponsor shall have no right to participate in such
distribution.
(iii) In the event that a Registration Statement with respect to
the Shares underlying the Warrants, including the Warrant Shares underlying the
Sponsor Warrants, is not effective under the Securities Act or a current
Prospectus is not on file with the SEC, the Sponsor shall not be entitled to
exercise the Sponsor Warrants. For the avoidance of doubt, the Sponsor shall not
be entitled to exercise the Sponsor Warrants, unless the Warrants are currently
exercisable.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to Sponsor that:
(a) The execution, delivery and performance of this Agreement has
been or will be duly and validly authorized by the Company and will be a valid
and binding agreement of the Company, enforceable in accordance with its
respective terms, except to the extent that (i) the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect and affecting the rights of creditors generally,
(ii) the enforceability hereof is subject to general principles of equity or
(iii) the indemnification provisions hereof may be held to violate public
policy. The securities to be issued pursuant to the transactions contemplated by
this Agreement have been duly authorized and, when issued and paid for in
accordance with (x) this Agreement and (y) the certificates/instruments
representing such securities, will be valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except to the
extent that (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, (ii) the enforceability
thereof is subject to general principles of equity, or (iii) the indemnification
provisions thereof may be held to violate public policy. All corporate action
required to be taken for the authorization, issuance and sale of the Sponsor
Warrants has been duly and validly taken by the Company.
(b) The Warrant Shares issuable upon exercise of the Sponsor
Warrants, will be duly authorized and when issued and paid for in accordance
with this Agreement and proper exercise of such Sponsor Warrants, respectively,
and the certificates/instruments representing such Common Stock, will be validly
issued, fully-paid and non-assessable; and such securities are not and will not
be subject to the preemptive rights of any holder of any security of the
Company.
(c) The Company is organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware. The Company is duly
qualified or licensed and in good standing as a foreign corporation in each
jurisdiction in which the character of its operations requires such
qualification or licensing and where failure to so qualify would have a material
adverse effect on the Company. The Company has all requisite power and
authority, and all material and necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies (domestic and foreign) ("APPROVALS") to conduct its
business and the Company is doing business in material compliance with all such
Approvals except where the failure to have such Approvals would not have a
material adverse effect on the Company. The Company has all power and authority
to enter into this Agreement, to carry out the provisions and conditions hereof,
and all consents, authorizations, and approvals required in connection herewith
have been obtained or will be obtained prior to the Closing. No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required by the Company for the issuance of the securities except
for applicable federal and state securities laws.
4. COVENANTS.
(a) BEST EFFORTS. The parties shall use their best efforts to satisfy
timely each of the conditions described in Sections 6 and 7 of this Agreement.
(b) AUTHORIZATION AND RESERVATION OF WARRANT SHARES. The Company
shall at all times have authorized, and reserved for the purpose of issuance, a
sufficient number of shares of Common Stock to provide for the full exercise of
the outstanding Sponsor Warrants.
5. REGISTRATION RIGHTS. Sponsor (and its assignees and transferees) shall
be granted demand registrations pursuant to a Registration Rights Agreement
reasonably acceptable to Sponsor and the Company.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of the
Company hereunder to issue and sell the Sponsor Warrants to Sponsor at the
Closing is subject to the satisfaction, at or before the Closing Date of each of
the following conditions thereto, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion:
(a) Sponsor shall have executed this Agreement and delivered the same
to the Company.
(b) Sponsor shall have delivered the Sponsor Purchase Price in
accordance with Section 1(b) above.
(c) The representations and warranties of Sponsor shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and Sponsor shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by
Sponsor at or prior to the Closing Date.
(d) No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
7. CONDITIONS TO THE SPONSOR'S OBLIGATION TO PURCHASE. The obligation of
Sponsor hereunder to purchase the Sponsor Warrants at the Closing is subject to
the satisfaction, at or before the Closing Date of each of the following
conditions, provided that these conditions are for Sponsor's sole benefit and
may be waived by Sponsor at any time in its sole discretion:
(a) The Company shall have executed this Agreement and delivered the
same to Sponsor.
(b) The Company shall have delivered to Sponsor duly executed
certificates for the Sponsor Warrants (in such denominations as Sponsor shall
request) in accordance with Section 1(b) above.
(c) The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.
(d) No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(e) No event shall have occurred which could reasonably be expected
to have a material adverse effect on the Company.
(f) The Company shall have executed an Underwriting Agreement with
the underwriter for the IPO.
8. GOVERNING LAW; MISCELLANEOUS.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK
CITY, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE
THAT SERVICE OF PROCESS UPON A PARTY MAILED BY REGISTERED FIRST CLASS MAIL SHALL
BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY
SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A
FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY
OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING
UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
REASONABLE ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH
SUCH DISPUTE.
(b) COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. In the event that any provision of this Agreement
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and supercede all prior agreements,
including without limitation the
Unit Purchase Agreement, and, except as specifically set forth herein or
therein, neither the Company nor Sponsor makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.
(f) NOTICES. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company: Xxxxxxxxx Ventures Ltd.
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
With a copy to: Reitler Xxxxx & Xxxxxxxxxx LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Facsimile: 000-000-0000
If to Sponsor: Xxxxxxxxx Capital Partners LLC
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
Each party shall provide notice to the other party of any change in address.
(g) WAIVER OF CLAIMS; INDEMNIFICATION. Sponsor hereby waives any and
all rights to assert any present or future claims, including any right of
rescission, against the Company and Banc of America Securities LLC (the
"UNDERWRITER") with respect to its purchase of the Sponsor Warrants and those
warrants to purchase 4,000,000 shares of the Company's Common Stock (the "Prior
Sponsor Warrants") pursuant to a Warrant Puchase Agreement dated as of September
5, 2006, and agrees to indemnify and hold the Company and the Underwriter in the
IPO harmless from all losses, damages or expenses that relate to claims or
proceedings brought against the Company, or such Underwriter by Sponsor of the
Sponsor Warrants and the prior Sponsor Warrants or its transferees, assigns or
any subsequent holder of the Sponsor Warrants and the prior Sponsor Warrants.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns, provided,
however, that Sponsor shall not have the right to assign any of its rights
hereunder to purchase Sponsor Warrants to any other person.
(i) THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person; provided that Section 8(g) is intended to benefit the
Underwriter and shall be enforceable against Sponsor by the Underwriter.
(j) FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(k) NO STRICT CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
(l) FURTHER AGREEMENT. Sponsor agrees to enter into an agreement or
execute a letter confirming the voting obligations and other restrictions
pertaining to the Sponsor Warrants upon request of the Underwriter for the IPO.
* * *
IN WITNESS WHEREOF, the undersigned Sponsor and the Company have caused
this Agreement to be duly executed as of the date first above written.
XXXXXXXXX VENTURES LTD.
By: ___________________________
Name:
Title:
XXXXXXXXX CAPITAL PARTNERS, LLC
By: __________________________
Name:
Title:
