FIG Acquisition Corp. Warrant Purchase Agreement
EXHIBIT 10.4
THIS WARRANT PURCHASE AGREEMENT (the “Agreement”) is made as of [•], 2008 by and
between FIG Acquisition Corp., a Delaware corporation (the “Company”), and KBW, Inc. (the
“Purchaser”).
WHEREAS, the Company desires to commit to issue and sell, and the Purchaser desires to commit
to purchase and acquire, Private Placement Warrants (as defined herein) on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IT IS AGREED among the parties as follows for and in consideration of the
promises and mutual covenants set forth herein:
1. Purchase of Private Placement Warrants. Subject to and immediately prior to the
completion of the Company’s initial public offering (the “IPO”), the Purchaser hereby
agrees to subscribe for and purchase from the Company, and the Company hereby agrees to issue and
sell to the Purchaser, 5,500,000 warrants, reduced by the number of warrants purchased by certain
employees of KBW, Inc. or its subsidiaries or affiliates (each an “Private Placement
Warrant”), at a purchase price of $1.00 per Private Placement Warrant for an aggregate purchase
price of up to $5,500,000 (the “Purchase Price”). Each Private Placement Warrant shall
entitle the holder thereof to purchase one share of the common stock of the Company, par value
$0.0001 per share (the “Common Stock”) at an exercise price of $7.50, in accordance with
the terms set forth in the certificate evidencing the Private Placement Warrants, substantially in
the form attached hereto as Exhibit A, and shall be subject to the terms of a warrant
agreement, to be entered into by and between the Company and American Stock Transfer & Trust
Company, as warrant agent (the “Warrant Agreement”), upon execution thereof.
2. Closing. The closing of the purchase and sale of the Private Placement Warrants
hereunder, including payment for and delivery of the Private Placement Warrants, shall occur at the
offices of the Company or the Company’s legal counsel immediately prior to, and shall be subject
to, the completion of the IPO.
3. Payment of Purchase Price. The Purchase Price shall be tendered in full at the
Closing in immediately available funds.
4. Limitations on Transfer. The Purchaser shall not assign, hypothecate, donate,
encumber or otherwise dispose of any interest in the Private Placement Warrants (and the shares of
Common Stock issued upon exercise thereof) during the respective “Escrow Period” (as such
term is defined in a stock escrow agreement, substantially in the form attached hereto as
Exhibit B, the “Escrow Agreement”), except (i) as otherwise permitted in the Escrow
Agreement, (ii) in compliance with applicable securities laws and (iii) in compliance with the
Warrant Agreement.
5. Restrictive Legends. All certificates representing the Private Placement Warrants
shall have endorsed thereon legends in substantially the following forms (in addition to any other
legend which may be required by other agreements between the parties hereto):
(a) “THE SECURITIES EVIDENCED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO TRANSFER, SALE OR OTHER DISPOSITION OF THESE SECURITIES MAY BE MADE UNLESS
A REGISTRATION STATEMENT WITH RESPECT TO THESE SECURITIES HAS BECOME EFFECTIVE UNDER SAID
ACT, OR THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON
EXERCISE OF THE WARRANT) ARE SUBJECT TO FORFEITURE AND ADDITIONAL RESTRICTIONS ON TRANSFER
AND OTHER AGREEMENTS SET FORTH IN (I) THE WARRANT AGREEMENT DATED AS OF [•] BY AND BETWEEN
THE COMPANY AND THE WARRANT AGENT AND (II) THE STOCK ESCROW AGREEMENT DATED AS OF [•] BY AND
BETWEEN THE HOLDER, THE COMPANY AND THE ESCROW AGENT. COPIES OF SUCH AGREEMENTS MAY BE
OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
(b) Any legend required by appropriate blue sky officials.
6. Lock-Up Agreement. At or prior to the closing of the IPO, the Purchaser shall
enter into a lock-up agreement with the Company and the representative of the underwriters of the
IPO, Banc of America Securities LLC, pursuant to which, subject to certain limited exceptions, the
Purchaser shall not, without the prior written consent of Banc of America Securities LLC, directly
or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer, hedge or
establish an open “put equivalent position” or liquidate or decrease a “call equivalent position”
within the meaning of Rule 16a-1(h) of the Exchange Act, or otherwise dispose of or transfer, or
make any demand for, or exercise any right for the registration of any of the Private Placement
Warrants or the shares of Common Stock underlying such Private Placement Warrants, until after the
consummation of the Company’s initial business combination. These exceptions include transfers to
permitted transferees, who agree in writing to be bound by such transfer restrictions. However, if
(a) during the last 17 days of the applicable lock-up period described above, the Company issues an
earnings release or material news or a material event relating to the Company occurs or (b) before
the expiration of the applicable lock-up period described above, the Company announces that it will
release earnings results or becomes aware that material news or a material event will occur during
the 16-day period beginning on the last day of such applicable lock-up period, such applicable
lock-up period will be extended for 18 days beginning on the date of the issuance of the earnings
release or the occurrence or the material news or of the material event.
7. Representations and Warranties of the Purchaser. In connection with the purchase
of the Private Placement Warrants, the Purchaser represents to the Company the following:
(a) The Purchaser is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated by the Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “Securities Act”), and is able to bear
the risk of an entire loss of its investment in the Private Placement Warrants;
(b) The Purchaser is aware of the Company’s business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Private Placement Warrants. The Purchaser is
purchasing the Private Placement Warrants for investment for the 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. The Purchaser has been afforded the opportunity
to ask questions of the executive
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officers and directors of the Company. The Purchaser understands that its investment
in the Private Placement Warrants involves a high degree of risk. The Purchaser has sought
such accounting, legal and tax advice as the Purchaser has considered necessary to make an
informed investment decision with respect to the Purchaser’s acquisition of the Private
Placement Warrants. The 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 Private
Placement Warrants, and is able to bear the economic risk of an investment in the Private
Placement Warrants in the amount contemplated hereunder. The Purchaser understands that the
Company is a blank check development stage company recently formed for the purpose of
consummating an initial business combination (as such term is defined in the Certificate of
Incorporation of the Company, as the same may be amended from time to time) and understands
that there is no assurance as to the future performance of the Company and that the Company
may never effectuate a business combination.
(c) The Purchaser understands that the Private Placement Warrants (and the shares of
Common Stock issuable upon exercise thereof) 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 the Purchaser’s compliance with, the
representations and warranties and agreements of Purchaser set forth herein to determine the
availability of such exemptions and the eligibility of Purchaser to acquire such Private
Placement Warrants, including, but not limited to, the bona fide nature of the Purchaser’s
investment intent as expressed herein.
(d) The Purchaser further acknowledges and understands that the Private Placement
Warrants (and the shares of Common Stock issuable upon exercise thereof) must be held
indefinitely, subject to any expiration, unless the Private Placement Warrants (and the
shares of Common Stock issuable upon exercise thereof) are subsequently registered under the
Securities Act or an exemption from such registration is available. The Purchaser
understands that the certificate evidencing the Private Placement Warrants (and the shares
of Common Stock issuable upon exercise thereof) will be imprinted with a legend which
prohibits the transfer of the Private Placement Warrants (and the shares of Common Stock
issuable upon exercise thereof) unless such Private Placement Warrants (and the shares of
Common Stock issuable upon exercise thereof) are registered or such registration is not
required in the opinion of counsel for the Company.
(e) The Purchaser is familiar with the provisions of Rule 144 under the Securities Act
(as in effect from time to time, “Rule 144”), which, in substance, permits limited
public resale of “restricted securities” acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions. Unless the Company registers the Private Placement
Warrants (and the shares of Common Stock issuable upon exercise thereof) under the
Securities Act, the Private Placement Warrants (and the shares of Common Stock issuable upon
exercise thereof) may be resold by the Purchaser only in certain limited circumstances
subject to the provisions of Rule 144, which requires, among other things: (i) the
availability of certain public information about the Company and (ii) the resale occurring
following the required holding period under Rule 144 after the Purchaser has purchased, and
made full payment of (within the meaning of Rule 144), the securities to be sold.
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(f) The Purchaser further understands that, at the time the Purchaser wishes to sell
the Private Placement Warrants, there may be no public market upon which to make such a
sale, and that, even if such a public market then exists, the Company may not be satisfying
the current public information requirements of Rule 144, and that, in such event, the
Purchaser would be precluded from selling the Private Placement Warrants (and the shares of
Common Stock issuable upon exercise thereof) under Rule 144 even if the minimum holding
period requirement had been satisfied. Notwithstanding Section 7(e) and this Section 7(f)
hereof, the Purchaser understands that, under current interpretations, the Purchaser may be
considered a promoter of the Company and understands that it is the position of the SEC that
promoters or affiliates of a blank check company and their transferees, both before and
after a business combination, would act as an “underwriter” under the Securities Act when
reselling the securities of a blank check company. Accordingly, the SEC believes that those
securities can be resold only through a registered offering and that Rule 144 would not be
available for those resale transactions despite technical compliance with the requirements
of Rule 144.
(g) The Purchaser has all necessary power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. All action necessary to be taken by
the Purchaser to authorize the execution, delivery and performance of this Agreement and all
other agreements and instruments delivered by Purchaser in connection with the transactions
contemplated hereby has been duly and validly taken, and this Agreement has been duly
executed and delivered by the Purchaser. Subject to the terms and conditions of this
Agreement, this Agreement constitutes the valid, binding and enforceable obligation of the
Purchaser, enforceable in accordance with its terms, except as enforceability may be limited
by (i) 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); and (ii) the applicability of the federal
and state securities laws and public policy as to the enforceability of the indemnification
provisions of this Agreement. The purchase of the Private Placement Warrants does not
conflict with the organizational documents of the Purchaser or with any material contract by
which the Purchaser or its property is bound, or any laws or regulations or decree, ruling
or judgment of any court applicable to the Purchaser or its property. The principal place
of business of the Purchaser is as set forth on the signature page hereto.
(h) The 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.
(i) The Purchaser understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any recommendation or
endorsement of the Private Placement Warrants or the fairness or suitability of the
investment in the Private Placement Warrants, nor have such authorities passed upon or
endorsed the merits of the offering of the Private Placement Warrants.
8. Registration Rights Agreement. At or prior to the closing of the IPO, the company
and the Purchaser shall enter into a mutually satisfactory registration rights agreement having the
terms described in the Registration Statement.
9. Indemnification. The Purchaser hereby agrees to indemnify and hold harmless the
Company and the Company’s officers, directors, stockholders, employees, agents, and attorneys
against any and all losses, claims, demands, liabilities and expenses (including reasonable legal
or other expenses
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incurred by each such person in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to such person or whether incurred by the
indemnified party in any action or proceeding between the indemnitor and indemnified party or
between the indemnified party and any third party) to which any such indemnified party may become
subject, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact made by the
Purchaser and contained herein, or (b) arise out of or are based upon any breach by the Purchaser
of any representation, warranty or agreement made by the Purchaser contained herein.
10. Miscellaneous.
(a) Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed facsimile, if sent during normal business hours of the
recipient, and if not sent during normal business hours of the recipient, then on the next
business day, (iii) five (5) calendar days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one (1) business day after deposit
with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the other party hereto at such
party’s address hereinafter set forth on the signature page hereof, or at such other address
as such party may designate by a 10 days’ advance written notice to the other party hereto.
(b) Successors and Assigns. This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on transfer herein
set forth, be binding upon the Purchaser and its successors and assigns.
(c) Attorneys’ Fees; Specific Performance. The Purchaser shall reimburse the
Company for all costs incurred by the Company in enforcing the performance of, or protecting
its rights under, any part of this Agreement, including reasonable costs of investigation
and attorneys’ fees.
(d) Governing Law; Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of law
thereof. The parties agree that any action brought by any party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and does hereby,
submit to the jurisdiction and venue of, the appropriate state or federal court for the
district encompassing the Company’s principal place of business.
(e) Further Execution. The parties agree to take all such further action(s) as
may be reasonably 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.
(f) Entire Agreement; Amendment. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and supersedes and
merges all prior agreements or understandings, whether written or oral. This Agreement may
not be amended, modified or revoked, in whole or in part, except by an agreement in writing
signed by each of the parties hereto.
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(g) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were
so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with
its terms.
(h) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one
instrument.
(i) Survival. The representations and warranties contained herein will survive
the delivery of, and the payment for, the Private Placement Warrants.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant Purchase Agreement as of the
day and year first above written.
| FIG ACQUISITION CORP. | ||||||
| By: | ||||||
| Name: | Xxxxx X. Xxxx | |||||
| Title: | Chief Executive Officer | |||||
| Address: | 000 Xxxxxxx Xxxxxx | |||||
| Xxx Xxxx, XX 00000 | ||||||
| KBW, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Address: | 000 Xxxxxxx Xxxxxx | |||||
| Xxx Xxxx, XX 00000 | ||||||
Signature Page to the Warrant Purchase Agreement
EXHIBIT A
FORM OF WARRANT CERTIFICATE
EXHIBIT B
STOCK ESCROW AGREEMENT
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