Hicks Acquisition Company II, Inc. 20,000,000 Units1 Common Stock Warrants UNDERWRITING AGREEMENT
Exhibit 1.1
Xxxxx Acquisition Company II, Inc.
20,000,000
Units1
Common Stock
Warrants
Common Stock
Warrants
Citigroup Global Markets Inc.
As Representative of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxx Acquisition Company II, Inc., a corporation organized under the laws of Delaware (the
“Company”), proposes to sell to the several underwriters named in Schedule I hereto (the
“Underwriters”), for whom you (the “Representative”) are acting as sole
representative, 20,000,000 units (the “Units”) of the Company (said units to be issued and
sold by the Company being hereinafter called the “Underwritten Securities”). The Company
also proposes to grant to the Underwriters an option to purchase up to 3,000,000 additional units
to cover over-allotments, if any (the “Option Securities”; the Option Securities, together
with the Underwritten Securities, being hereinafter called the “Securities”). To the
extent there are no additional Underwriters listed on Schedule I other than you, the term
Representative as used herein shall mean you, as Underwriter, and the term Underwriter shall mean
either the singular or plural as the context requires. Certain capitalized terms used herein and
not otherwise defined are defined in Section 20 hereof.
Each Unit consists of one share of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”), and one warrant to purchase one share of Common Stock (the
“Warrant(s)”). The shares of Common Stock and Warrants included in the Units will not
trade separately until the 52nd day following the date of the Prospectus (unless the
Representative informs the Company of its decision to allow earlier separate trading), subject to
(a) the Company’s preparation of an audited balance sheet reflecting the receipt by the Company of
the proceeds of the offering of the Securities, (b) the filing of such audited balance sheet
with the Commission on a Form 8-K or similar form by the Company which includes such audited
balance sheet and (c) the Company having issued a press release announcing when such separate trading will begin. Each Warrant entitles its holder, upon exercise, to purchase one share of Common
Stock for $12.00 during the period commencing on the later of 30 days after the completion of an
initial “Business Combination” or 12 months from the date of the consummation of the
Offering (as defined below) and terminating on the five-year anniversary of the date of the
completion of such initial Business Combination or earlier upon Liquidation. As used herein, the
term “Business Combination” (as described more fully in the Registration Statement) shall
mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses.
The Company has entered into an Investment Management Trust Agreement, effective as of
___, 2010, with Continental Stock Transfer & Trust Company (“CST&T”), as
trustee, in
| 1 | Plus an option to purchase from the Company, up to 3,000,000 additional Units to cover over-allotments. |
substantially the form filed as an exhibit to the Registration Statement (the “Trust
Agreement”), pursuant to which certain proceeds of the Offering will be deposited and held in a
trust account (the “Trust Account”) for the benefit of the Company, the Underwriters and
the holders of the Underwritten Securities and the Option Securities, if and when issued.
The Company has entered into a Warrant Agreement, effective as of ___, 2010, with
respect to the Warrants and the Sponsor Warrants (each as defined herein) with CST&T, as warrant
agent, in substantially the form filed as an exhibit to the Registration Statement (the
“Warrant Agreement”), pursuant to which CST&T will act as warrant agent in connection with
the issuance, registration, transfer, exchange, redemption, and exercise of the Warrants and
Sponsor Warrants.
The Company has entered into a Securities Purchase Agreement, effective as of June 15, 2010
(the “Founder’s Purchase Agreement”), with HH-HACII, L.P., a Delaware limited partnership
(the “Sponsor”) pursuant to which the Sponsor has purchased an aggregate of 3,285,714
shares of Common Stock (the “Founder’s Shares”), for an aggregate purchase price of
$25,000. Subsequent to purchasing the Founder’s Shares, the Sponsor transferred an aggregate of
32,856 Founder’s Shares to Xxxxxxx X. Xxxxxxxxxx and Xxxxxxx X. Xxxxx (together with the Sponsor,
the “Initial Stockholders”). The Founder’s Shares are substantially similar to the Common
Stock included in the Units except as described in the Prospectus.
The Company has entered into a Sponsor Warrants Purchase Agreement, dated as of June 23, 2010
(the “Warrant Subscription Agreement”), with the Sponsor, pursuant to which the Sponsor has
agreed to purchase an aggregate of 6,666,667 warrants, each entitling the holder to purchase one
share of Common Stock (the “Sponsor Warrants”), for $0.75 per Sponsor Warrant. The Sponsor
Warrants are substantially similar to the Warrants included in the Units, except as described in
the Prospectus.
The Company has entered into a Registration Rights Agreement, dated as of ___,
2010, with the Sponsor and the other parties thereto, 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’s Shares and the Sponsor
Warrants and the shares of Common Stock underlying the Sponsor Warrants.
The Company has caused to be duly executed and delivered letters by the Sponsor, the Initial
Stockholders, Xxxxxx X. Xxxxx (the “Founder”) and each of the Company’s officers and
directors, each in substantially the form filed as an exhibit to the Registration Statement (the
“Insider Letters”).
The Company has entered into a letter agreement, dated as of June 23, 2010 (the “Services
Agreement”), with Xxxxx Holdings Operating, LLC, pursuant to which the Company will pay to
Xxxxx Holdings Operating, LLC, subject to the terms of the Services Agreement, an aggregate monthly
fee of $10,000 for general and administrative services, including office space, utilities and
secretarial support from the date hereof until the earlier of (i) the consummation of a Business
Combination or (ii) the Liquidation.
1. Representations and Warranties. The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission the Registration Statement (file
number 333-167809) on Form S-1, including the related Preliminary Prospectus, for registration
under the Act of the offering and sale of the Securities. Such Registration Statement, including
any amendments thereto filed prior to the Execution Time, has become effective. The Company may
have filed one or more amendments thereto, including the related Preliminary
Prospectus, each of which has previously been furnished to you. The Company will file with
the Commission the Prospectus in accordance with Rule 424(b). As filed, such Prospectus shall
contain all information required by the Act and, except to the extent the Representative shall
agree in writing to a modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will
be included or made therein. The Company has complied to the Commission’s satisfaction with all
requests of the Commission for additional or supplemental information.
(b) On the Effective Date, the Registration Statement did, and when the Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date
on which Option Securities are purchased, if such date is not the Closing Date (a “settlement
date”), the Prospectus (and any supplement thereto) will, comply in all material respects with
the applicable requirements of the Act; on the Effective Date and at the Execution Time, the
Registration Statement did not and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, the Prospectus (together with any supplement thereto)
will not include any untrue statement of a material fact or 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 the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Underwriter through the
Representative specifically for inclusion in the Registration Statement or the Prospectus (or any
supplement thereto), it being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section 8(b) hereof.
(c) The Statutory Prospectus does not contain any untrue statement of a material fact or omit
to state any 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 the information contained in or omitted from the Statutory
Prospectus based upon and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any Underwriter
consists of the information described as such in Section 8(b) hereof.
(d) The Company has filed with the Commission a Form 8-A (file number ___- ) providing
for the registration under the Exchange Act of the Securities, which registration is currently
effective on the date hereof. The Securities have been authorized for quotation, subject to
official notice of issuance and evidence of satisfactory distribution, on the OTC Bulletin Board,
and the Company knows of no reason or set of facts which is likely to adversely affect such
authorization.
(e) The Commission has not issued any order or, to the Company’s knowledge, threatened to
issue any order preventing or suspending the effectiveness of the Registration Statement or the
use of any Preliminary Prospectus, the Prospectus or any part thereof, and has not instituted or,
to the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
(f) (i) At the time of filing the Registration Statement and (ii) as of the Execution Time
(with such date being used as the determination date for purposes of this clause (ii)), the
Company was and is an Ineligible Issuer (as defined in Rule 405).
(g) The Company has not prepared or used a Free Writing Prospectus.
(h) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be, and to operate its properties
and conduct its business as described in the Statutory Prospectus and the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification.
(i) There are no subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X.
(j) There is no franchise, contract or other document of a character required to be described
in the Registration Statement 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 Relationships and Related Party Transactions,” and “Description of
Securities” 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. There are no business relationships or related party transactions
involving the Company or any other person required by the Act to be described in the Registration
Statement or Prospectus that have not been described as required.
(k) The Company’s authorized equity capitalization is as set forth in the Statutory
Prospectus and the Prospectus.
(l) All issued and outstanding securities of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable; and none of such securities were
issued in violation of the preemptive rights of any holders of any security of the Company or
similar contractual rights granted by the Company. The offers and sales of the outstanding Common
Stock and Warrants were at all relevant times either registered under the Act, the applicable
state securities and blue sky laws or, based in part on the representations and warranties of the
purchasers of such shares of Common Stock and Warrants, 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 the 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.
(m) The Securities have been duly authorized and when executed by the Company and
countersigned and issued and delivered against payment by the underwriters pursuant to this
Agreement, will be validly issued.
(n) The Common Stock included in the Units has been duly authorized and, when executed by the
Company and countersigned, and issued and delivered against payment for the Securities by the
Underwriters pursuant to this Agreement, will be validly issued, fully paid and non-assessable.
(o) The Warrants included in the Units, when executed, authenticated, issued and delivered in
the manner set forth in the Warrant Agreement against payment for the Securities by the
Underwriters pursuant to this Agreement, will be 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.
(p) The shares of Common Stock issuable upon exercise of the Warrants included in the Units
have been duly authorized and, when 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.
(q) The certificates for the Common Stock are in valid and proper form.
(r) Except as set forth in the Statutory Prospectus and the Prospectus, no holders of any
securities of the Company or any rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to register any such securities of
the Company under the Act or to include any such securities in a registration statement to be
filed by the Company.
(s) No securities of the Company have been sold by the Company or by or on behalf of, or for
the benefit of, any person or persons controlling, controlled by, or under common control with the
Company from its inception through and including the date hereof, except as disclosed in the
Registration Statement.
(t) Neither the Company nor any of its affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “integrated” pursuant to the Act with the
offer and sale of the Underwritten Securities pursuant to the Registration Statement.
(u) The Founder’s Shares are duly authorized, validly issued, fully paid and non-assessable.
(v) The Sponsor Warrants, when delivered upon the consummation of this offering, will be duly
executed, authenticated and issued, 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.
(w) This 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.
(x) 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.
(y) 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.
(z) The Founder’s Purchase Agreement has been duly authorized, executed and delivered by the
Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor,
enforceable against the Company and the Sponsor, respectively, 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.
(aa) The Warrant Subscription Agreement has been duly authorized, executed and delivered by
the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor,
enforceable against the Company and the Sponsor, respectively, 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.
(bb) 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.
(cc) 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.
(dd) Each of the Insider Letters executed by the Company, the Initial Stockholders, the
Founder and, to the Company’s knowledge, each executive officer and director of the Company, has
been duly authorized, executed and delivered by the Company, the Initial Stockholders, the Founder
and, to the Company’s knowledge, each such executive officer and director, respectively, and is a
valid and binding agreement of the Company, the Initial Stockholders, the Founder and, to the
Company’s knowledge, each such executive officer and director, respectively, enforceable against
the Company, the Initial Stockholders, the Founder and, to the Company’s knowledge, each such
executive officer and director, respectively, 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.
(ee) The Company is not and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Statutory Prospectus and the
Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940,
as amended.
(ff) No consent, approval, authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions contemplated herein or in the Trust
Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant
Subscription Agreement, the Services Agreement, the Registration Rights Agreement, or the
Insider Letters, except for the registration under the Act and the Exchange Act of the Securities
and such as may be required under state securities or blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Statutory Prospectus and the Prospectus.
(gg) The Company is not in violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject, or (iii) any (x) statute, law, rule,
regulation, or (y) judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Company; except in
the case of clauses (ii) and (iii) above for any such conflict, breach or violation that would
not, individually or in the aggregate, be reasonably expected to have a material adverse effect on
the financial condition, prospects, earnings, business or properties of the Company, taken as a
whole, whether or not arising from transactions in the ordinary course of business (a
“Material Adverse Effect”).
(hh) Neither the issue and sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof or of the Trust
Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant Subscription
Agreement, the Services Agreement, the Registration Rights Agreement, or the Insider Letters will
conflict with, result in a breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, (i) the charter or by-laws of
the Company, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is subject, or (iii) any statute,
law, rule, or regulation, judgment, order or decree applicable to the Company of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties.
(ii) No holders of securities of the Company have rights to the registration of such
securities under the Registration Statement.
(jj) The historical financial statements and schedules of the Company included in the
Statutory Prospectus, the Prospectus and the Registration Statement present fairly the financial
condition, results of operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The summary financial data
set forth under the caption “Summary Financial Data” in the Statutory Prospectus,
Prospectus and Registration Statement fairly present, on the basis stated in the Statutory
Prospectus, Prospectus and Registration Statement, the information included therein. The Company
is not party to any off-balance sheet transactions, arrangements, obligations (including
contingent obligations), or other relationships with unconsolidated entities or other persons that
may have a material current or future effect on the Company’s financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures, capital resources, or
significant components of revenues or expenses. The statistical, industry-related and
market-related data included in the Registration Statement, the Statutory Prospectus 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.
(kk) No action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company, the Sponsor or the Founder, or the property of
any of them is pending or, to the knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby by the Company or (ii) could
reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated
in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(ll) The Company owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(mm) KPMG LLP (“KPMG”), who have certified certain financial statements of the
Company and delivered their report with respect to the audited financial statements and schedules
included in the Registration Statement, Statutory Prospectus and the Prospectus, is a registered
public accounting firm that is independent with respect to the Company within the meaning of the
Act and the applicable published rules and regulations thereunder.
(nn) The Company maintains effective “disclosure controls and procedures” (as defined under
Rule 13a-15(e) under the Exchange Act to the extent required by such rule).
(oo) There are no transfer taxes or other similar fees or charges under Federal law or the
laws of any state, or any political subdivision thereof, required to be paid in connection with
the execution and delivery of this Agreement or the issuance or sale by the Company of the
Securities.
(pp) The Company has filed all tax returns that are required to be filed by it or has
requested extensions thereof (except in any case in which the failure so to file would not have a
Material Adverse Effect) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect, except as set forth in or contemplated in
the Registration Statement, Statutory Prospectus and the Prospectus (exclusive of any supplement
thereto).
(qq) 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 license, certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, except as set forth in or contemplated in the Statutory Prospectus and
the Prospectus (exclusive of any supplement thereto).
(rr) None of the Company, the Initial Stockholders, the Founder, or any director, officer,
agent, employee or affiliate of the Company is aware of or has taken any action, directly or
indirectly, that would result in a violation by the Company or, to the knowledge of the Company,
such other persons, of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA; and the Company, the Initial
Stockholders, the Founder and, to the knowledge of the Company, its affiliates have conducted the
businesses of the Company in compliance with the FCPA
and have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
(ss) The operations of the Company are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements and the money laundering
statutes and the rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (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 best knowledge of the Company, threatened.
(tt) None of the Company, the Initial Stockholders, the Founder or any director, officer,
agent or affiliate of the Company is currently subject to any 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 sanctions
administered by OFAC.
(uu) None of the Company, the Initial Stockholders, the Founder or any officer or director of
the Company has violated: (a) the Bank Secrecy Act, as amended, (b) the Money Laundering Laws, or
(c) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated
under any such law, or any successor law.
(vv) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, the Company (i) does not have any material lending or other relationship with any bank
or lending affiliate of any of the Underwriters and (ii) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of any of the Underwriters.
(ww) All information contained in the questionnaires (the “Questionnaires”) completed
by the Initial Stockholders, the Founder and, to the knowledge of the Company, the Company’s other
officers and directors and provided to the Underwriters as an exhibit to his or her Insider Letter
is true and correct and the Company has not become aware of any information which would cause the
information disclosed in the Questionnaires completed by the Initial Stockholders, the Founder and
the Company’s other officers and directors to become inaccurate and incorrect.
(xx) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, prior to the date hereof, the Company has not identified any acquisition target and
has not, nor, to its knowledge, has anyone on its behalf, initiated any substantive discussions
with an entity that the Company will acquire in its initial Business Combination.
(yy) Except as described in the Registration Statement, 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, the Initial Stockholders, or the Founder with respect to the sale of the
Securities hereunder or any other arrangements, agreements or understandings of the Company, the
Initial Stockholders, the Founder or any officer or director of the Company or their respective
affiliates, that may affect the Underwriters’ compensation, as determined by the Financial
Industry Regulatory Authority (“FINRA”).
(zz) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, the Company has not made any direct or indirect payments (in cash, securities or any
other “item of value” as defined in Rule 5110(c)(3) of FINRA’s Conduct Rules): (i) to 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 person that has been accepted by FINRA as a member of FINRA (a
“Member”); or (iii) to any person or entity that has any direct or indirect affiliation or
association with any Member, within the twelve months prior to the Effective Date, other than
payments to the Underwriters pursuant to this Agreement.
(aaa) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, during the period beginning 180 days prior to the initial filing of the Registration
Statement and ending on the Effective Date, no Member and/or any person associated or affiliated
with a Member has provided any investment banking, financial advisory and/or consulting services
to the Company.
(bbb) Except as disclosed in the FINRA Questionnaires provided to the Representative, no
officer, director, or beneficial owner of any class of the Company’s securities (whether debt or
equity, registered or unregistered, regardless of the time acquired or the source from which
derived) (any such individual or entity, a “Company Affiliate”) is a Member or a person
associated or affiliated with a Member.
(ccc) No Company Affiliate is an owner of stock or other securities of any Member (other than
securities purchased on the open market).
(ddd) No Company Affiliate has made a subordinated loan to any Member.
(eee) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, no proceeds from the sale of the Underwritten Securities (excluding underwriting
compensation as disclosed in the Registration Statement, Statutory Prospectus and the Prospectus)
will be paid by the Company to any Member, or any persons associated or affiliated with a Member.
(fff) The Company has not issued any warrants or other securities, or granted any options,
directly or indirectly to anyone who is a potential underwriter in the Offering or a related
person (as defined by FINRA rules) of such an underwriter within the 180-day period prior to the
initial filing date of the Registration Statement.
(ggg) No person to whom securities of the Company have been privately issued within the
180-day period prior to the initial filing date of the Registration Statement has any relationship
or affiliation or association with any Member.
(hhh) No Member intending to participate in the Offering has a conflict of interest with the
Company. For this purpose, a “conflict of interest” means, if at the time of the Member’s
participation in the Offering, any of the following applies: (A) the securities are to be issued
by the Member; (B) the Company controls, is controlled by or is under common control with the
Member or the Member’s associated persons; (C) at least 5% of the net offering proceeds, not
including underwriting compensation, are intended to be: (i) used to reduce or retire the balance
of a loan or credit facility extended by the Member, its affiliates and its associated persons, in
the aggregate; or (ii) otherwise directed to the Member, its affiliates and associated persons, in
the aggregate; or (D) as a result of the Offering and any transactions contemplated at the time of
the Offering: (i) the Member will
be an affiliate of the Company; (ii) the Member will become publicly owned; or (iii) the
Company will become a Member or form a broker-dealer subsidiary.
(iii) The Company has not taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(jjj) The Company does not own an interest in any corporation, partnership, limited liability
company, joint venture, trust or other entity.
(kkk) No relationship, direct or indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director, officer, shareholder, special
advisor, customer or supplier of the Company or any affiliate of the Company, on the other hand,
which is required by the Act or the Exchange Act to be described in the Registration Statement,
Statutory Prospectus or the Prospectus which is not described as required. There are no
outstanding loans, advances (except normal advances for business expenses in the ordinary course
of business) or guarantees of indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement, Statutory Prospectus and the Prospectus. The Company has
not extended or maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or officer of the Company.
(lll) The Company has not offered, or caused the Underwriters to offer, the Underwritten
Securities to any person or entity with the intention of unlawfully influencing: (a) a customer or
supplier of the Company or any affiliate of the Company to alter the customer’s or supplier’s
level or type of business with the Company or such affiliate or (b) a journalist or publication to
write or publish favorable information about the Company or any such affiliate.
(mmm) Upon delivery and payment for the 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 3a51-1 under the Exchange Act.
(nnn) The Securities have been authorized for quotation on the OTC Bulletin Board.
Any certificate signed by any officer of the Company and delivered to the Representative or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company,
at a purchase price of $[___] per Unit, the amount of the Underwritten Securities set forth
opposite such Underwriter’s name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 3,000,000 Option Securities at the same purchase price
per share as the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time on or before the
45th day after the date of the
Prospectus upon written notice by the Representative to the Company setting forth the number
of Option Securities as to which the several Underwriters are exercising the option and the
settlement date. The number of Option Securities to be purchased by each Underwriter shall be
based upon the same percentage of the total number of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as the Representative in its absolute discretion shall make to eliminate any
fractional shares.
(c) In addition to the discount from the public offering price represented by the Purchase
Price set forth in the first sentence of Section 2(a) of this Agreement, the Company hereby agrees
to pay to the Underwriters a deferred discount of $0.25 per Unit (including both Underwritten
Securities and Option Securities) purchased hereunder (the “Deferred Discount”). The
Deferred Discount will be payable from amounts on deposit in the Trust Account if and when the
Company consummates a Business Combination. The Underwriters hereby agree that if no Business
Combination is consummated within the time period provided in the Trust Agreement and the funds
held under the Trust Agreement are distributed to the holders of the Common Stock sold pursuant to
this Agreement (the “Public Stockholders”), (i) the Underwriters will forfeit any rights
or claims to the Deferred Discount and (ii) the trustee under the Trust Agreement is authorized to
distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and
the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised
on or before the third Business Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on ___, 2010, or at such time on such later date not more than three Business
Days after the foregoing date as the Representative shall designate, which date and time may be
postponed by agreement between the Representative and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being herein called the
“Closing Date”). Delivery of the Securities shall be made to the Representative for the
respective accounts of the several Underwriters against payment by the several Underwriters through
the Representative of the purchase price thereof by wire transfer payable in same-day funds to an
account specified by the Company and to the Trust Account as described below in this Section 3.
Delivery of the Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company (“DTC”) unless the Representative shall
otherwise instruct.
(a) Payment for the Underwritten Securities shall be made as follows: $[ ] of the
proceeds received by the Company for the Underwritten Securities together with $[ ] of
Deferred Discount, shall be deposited in the Trust Account pursuant to the terms of the Trust
Agreement and $[ ] shall be paid to the order of the Company upon delivery to the
Representative of certificates (in form and substance satisfactory to the Representative)
representing the Underwritten Securities (or through the facilities of DTC) for the account of the
Underwriters. The Underwritten Securities shall be registered in such name or names and in such
authorized denominations as the Representative may request in writing at least two Business Days
prior to the Closing Date. The Company will permit the Representative to examine and package the
Underwritten Securities for delivery, at least one Business Day prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Underwritten Securities except upon tender
of payment by the Representative for all the Underwritten Securities.
(b) Payment for the Option Securities shall be made as follows: $[___] per Option Security
shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery
to the Representative of certificates (in form and substance satisfactory to the Representative)
representing the Option Securities (or through the facilities of DTC) for the account of the
Underwriters. The certificates representing the Option Securities to be delivered will be in such
denominations and registered in such names as the Representative requests not less than two
Business Days prior to the Closing Date and will be made available to the Representative for
inspection, checking and packaging at the aforesaid office of the Company’s transfer agent or
correspondent not less than one Business Day prior to such Closing Date.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day
prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the
Company) to the Representative, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified
by the Representative (which shall be within three Business Days after exercise of said option) for
the respective accounts of the several Underwriters, against payment by the several Underwriters
through the Representative of the purchase price thereof to the Trust Account as described above in
Section 3(b). If settlement for the Option Securities occurs after the Closing Date, the Company
will deliver to the Representative on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters propose
to offer the Securities for sale to the public as set forth in the Prospectus (the
“Offering”).
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for your review prior to filing
and will not file any such proposed amendment, supplement or Rule 462(b) Registration Statement to
which you reasonably object. The Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed in a form approved by the Representative with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such timely filing. The Company will
promptly advise the Representative (i) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (ii) when, prior to termination
of the offering of the Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iii) of any request by the Commission or its staff for any amendment
of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any notice objecting
to its use or the institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the issuance of any such stop
order or the occurrence of any such suspension or objection to the use of the Registration
Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such occurrence or objection, including,
if necessary, by filing an amendment to the Registration Statement or a new registration statement
and using its best efforts to have such amendment or new registration statement declared effective
as soon as practicable.
(b) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event
occurs as a result of which the Statutory Prospectus would include any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein in the
light of
the circumstances under which they were made at such time not misleading, the Company will
(i) notify promptly the Representative so that any use of the Statutory Prospectus may cease until
it is amended or supplemented; (ii) amend or supplement the Statutory Prospectus to correct such
statement or omission; and (iii) supply any amendment or supplement to you in such quantities as
you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered
under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), any event occurs as a result of which the Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, the Company promptly will (i) notify the Representative of any such event;
(ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement or omission or effect such
compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders
and to the Representative an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The Company will not make any offer relating to the Units that constitutes or would
constitute a Free Writing Prospectus or a portion thereof required to be filed by the Company with
the Commission or retained by the Company under Rule 433 of the Securities Act.
(f) The Company will furnish to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of
each Preliminary Prospectus, the Prospectus and any supplement thereto as the Representative may
reasonably request. The Company will pay the expenses of printing or other production of all
documents relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of the Securities for sale
under the laws of such jurisdictions as the Representative may designate and will maintain such
qualifications in effect so long as required for the distribution of the Securities; provided that
in no event shall the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(h) Except as set forth in Section 5(v), the Company will not, without the prior written
consent of the Representative, offer, sell, contract to sell, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act with respect to, any other Units, shares of Common Stock, Warrants or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock or publicly
announce an intention to effect any such transaction during the period commencing on the date
hereof and ending 180 days after the date of this Agreement; provided, however,
that the Company may (1) issue and sell the Sponsor Warrants, (2) issue and sell the Option
Securities on exercise of the option provided for in Section 2(b) hereof and (3) register with the
Commission pursuant to the Registration Rights Agreement, in accordance with the terms of the
Registration Rights Agreement, the resale of the Founder’s Shares and the Sponsor Warrants.
(i) The Company will not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(j) The Company agrees to pay the costs and expenses relating to the following matters:
(i) the preparation, printing or reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the
Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus, the Prospectus and all
amendments or supplements to any of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the quotation of the Securities on the
OTC Bulletin Board; (vi) the printing and delivery of a blue sky memorandum and the Secondary
Market Trading Survey (as defined in Section 5(ff) hereof), any registration or qualification of
the Securities for offer and sale under the securities or blue sky laws of the several states
(including filing fees and fees for counsel for the Underwriters relating to such memorandum,
survey, registration and qualification in an aggregate amount previously agreed upon between the
Company and the Representative); (vii) any filings required to be made with FINRA (including
filing fees and the reasonable and documented fees and expenses of counsel for the Underwriters
relating to such filings); (viii) the transportation and other expenses incurred by or on behalf
of the Company in connection with presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Company’s accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (x) all other costs and expenses
incident to the performance by the Company of its obligations hereunder.
(k) For a period commencing on the Effective Date and ending at
least five (5) years from the date of the consummation of the Business Combination or until such earlier
time at which the Liquidation occurs, 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, except after giving effect to a going
private transaction after the completion of a Business Combination
The Company will not deregister the Units, Common Stock or Warrants under the Exchange Act
(except in connection with a going private transaction after the completion of a Business
Combination) without the prior written consent of the Representative.
(l) The Company shall, on the date hereof, retain its independent registered public
accounting firm to audit the financial statements of the Company as of the Closing Date (the
“Audited Financial Statements”) reflecting the receipt by the Company of the proceeds of
the initial public offering. As soon as the Audited Financial Statements become available, the
Company shall immediately file a Current Report on Form 8-K with the Commission, which Report
shall contain the Company’s Audited Financial Statements. Additionally, upon the Company’s receipt
of the proceeds from the exercise of all or any portion of the option provided for in Section 2(b)
hereof, the Company
shall immediately file a Current Report on Form 8-K with the Commission, which report shall
disclose the Company’s sale of the Option Securities and its receipt of the proceeds therefrom.
(m) For a period commencing on the Effective Date and ending at least five (5) years from the date of the consummation of the Business Combination or until such earlier
time at which the Liquidation occurs or the Common Stock and warrants cease to be publicly traded, the Company, at its expense, shall cause its regularly
engaged independent registered public accounting firm to review (but not audit) the Company’s
financial statements for each of the first three fiscal quarters prior to the announcement of
quarterly financial information, the filing of the Company’s Form 10-Q quarterly report and the
mailing, if any, of quarterly financial information to stockholders.
(n) For a period commencing on the Effective Date and ending at least five (5) years from the date of the consummation of the Business
Combination or until such earlier time at which the Liquidation occurs or the Common Stock and
Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(o) In no event will the fees payable under the Services Agreement be more than $10,000 per
month in the aggregate.
(p) Other than payments made pursuant to the terms of the Services Agreement and except as
set forth in this subsection, the Company shall not pay the Initial Stockholders, the Founder or
any of the Company’s executive officers, directors or any of their respective affiliates any fees
or compensation for services rendered to the Company prior to, or in connection with, the
consummation of a Business Combination; provided however, that such officers,
directors and affiliates (i) may receive reimbursement for out-of-pocket expenses incurred by them
in connection with activities on the Company’s behalf to the extent that such expenses do not
exceed the amount of available proceeds not deposited in the Trust Account and the amount of
interest income that may be released from the Trust Account as described in the Registration
Statement and (ii) may be repaid loans as described in the Registration Statement.
(q) The Company will apply the net proceeds from the offering received by it in a manner
consistent with the applications described under the caption “Use of Proceeds” in the
Statutory Prospectus and the Prospectus.
(r) For a period of 90 days following the Effective Date, in the event any person or entity
(regardless of any FINRA 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, or has
provided or will provide any investment banking, financial, advisory and/or consulting services to
the Company, the Company agrees that it shall provide to FINRA, the Representative and its counsel
prior to the consummation of the Business Combination: (i) the identity of the person or entity
providing any such services; (ii) complete details of all such services and copies of all
agreements governing such services; and (iii) justification as to why the value received by any
person or entity for such services is not underwriting compensation for the Offering. The Company
also agrees that proper disclosure of such arrangement or potential arrangement will be made in
the tender offer materials or proxy statement, as applicable, which the Company may file in
connection with the Business Combination for purposes of offering redemption of shares held by its
stockholders or for soliciting stockholder approval, as applicable.
(s) The Company shall advise FINRA, the Representative and its counsel if it is aware that
any 5% or greater stockholder of the Company becomes an affiliate or associated person of a Member
participating in the distribution of the Company’s Securities.
(t) The Company shall cause the proceeds of the Offering to be held in the Trust Account to
be invested only in United States government treasury bills with a maturity of 180 days or less or
in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act
as set forth in the Trust Agreement and disclosed in the Statutory Prospectus and the Prospectus.
The Company will otherwise conduct its business in a manner so that it will not become subject to
the Investment Company Act. Furthermore, once the Company consummates a Business Combination, it
will not be required to register as an investment company under the Investment Company Act.
(u) During the period prior to the Company’s initial Business Combination, the Company may
instruct the trustee under the Trust Agreement that up to an aggregate of $3.0 million of interest
income (after appropriate reserve for payment of taxes) be released to the Company solely for the
purposes described in the Registration Statement. After an aggregate of $3.0 million is released
to the Company, any interest income earned on the amounts held in the Trust Account (net of taxes
payable thereon) will remain in the Trust Account until the earlier of the consummation of the
Company’s initial Business Combination or the Liquidation, except as otherwise provided in this
Section 5(u) or Section 5(v). The amount of interest income permitted to be released from the
Trust Account to the Company may be increased by up to $450,000, if the Underwriters’
over-allotment option is exercised in full. If the Underwriters’ over-allotment option is not
exercised in full, but is exercised in part, the amount of interest income permitted to be
released from the Trust Account shall be increased proportionally in relation to the proportion of
the over-allotment option which was exercised by the Underwriters. Moreover, the amount of
interest income that the Company may instruct the trustee under the Trust Agreement to release to
the Company may be further increased, to the extent that there is any interest accrued in the
Trust Account not required to pay income taxes on interest income earned on the balance then in
the Trust Account or franchise taxes, by up to an additional $100,000 if the proceeds of the
Offering held outside of the Trust Account and the funds otherwise released to the Company to
cover its operating expenses in accordance with this Section 5(u) are not sufficient to cover the
costs and expenses associated with implementing the Company’s plan of dissolution.
(v) If the Company seeks stockholder approval of the initial Business Combination, prior to
the consummation thereof, the Company may instruct the trustee under the Trust Agreement that
amounts necessary to purchase up to 15% of the shares of Common Stock sold as part of the Units in
the Offering (the “Public Shares”) (3,000,000 shares, or 3,450,000 shares if the
Underwriters’ over-allotment option is exercised in full) be released to the Company from the
Trust Account at any time commencing after the filing of a preliminary proxy statement for the
initial Business Combination and ending on the record date for the stockholder meeting to approve
such initial Business Combination (such purchases being referred to herein as “Open Market
Purchases”). Such Open Market Purchases (i) may be made only in open market transactions at
times when the Company is not in possession of material non-public information, (ii) may not be
made during a restricted period under Regulation M under the Exchange Act and (iii) shall comply
with Rule 10b-18 under the Exchange Act, at prices (inclusive of commissions) not to exceed an
amount equal to (A) the aggregate amount then on deposit in the Trust Account divided by (B) the
total number of Public Shares then outstanding.
(w) 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 Warrants and Sponsor Warrants
outstanding from time to time.
(x) Prior to the consummation of a Business Combination or the Liquidation, 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.
(y) The Company’s independent directors will review on a quarterly basis all payments made to
the Sponsor, to the Company’s officers or directors, or to the Company’s or any of such other
persons’ respective affiliates.
(z) The Company agrees that it will use commercially reasonable efforts to prevent the
Company from becoming subject to Rule 419 under the Act prior to the consummation of any Business
Combination, including, but not limited to, using its best efforts to prevent any of the Company’s
outstanding securities from being deemed to be a “xxxxx stock” as defined in Rule 3a-51-1 under
the Exchange Act during such period.
(aa) To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will
maintain “disclosure controls and procedures” (as defined under Rule 13a-15(e) under the Exchange
Act) and 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 in order to permit preparation of financial statements
in accordance 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.
(bb) As soon as legally required to do so, the Company and its directors and officers, in
their capacities as such, shall take all actions necessary to comply with any provision of the
Xxxxxxxx-Xxxxx Act, including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(cc) The Company shall not take any action or omit to take any action that would cause the
Company to be in breach or violation of its Amended and Restated Certificate of Incorporation, as
amended, or Bylaws, as amended.
(1) The Company will seek to have all vendors, service providers (other than
independent accountants), prospective target business or other entities with which it does
business enter into agreement waiving any right, title, interest or claim of any kind in or
to any monies held in the Trust Account for the benefit of the Public Stockholders.
(2) The Company may consummate the initial Business Combination and conduct redemptions
of shares of Common Stock for cash upon consummation of such Business Combination without a
stockholder vote pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, including
the filing of tender offer documents with the Commission. Such tender offer documents will
contain substantially the same financial and other information about the initial Business
Combination and the redemption rights as is required under the Commission’s proxy rules and
will provide each stockholder of the Company with the opportunity prior to the consummation
of the initial Business Combination to redeem the shares of Common Stock held by such
stockholder for an amount of cash equal to (A) the aggregate amount then on deposit in the
Trust Account as of the commencement of such tender offer plus
interest accrued from the date of the commencement of such tender offer until two business days prior to the consummation of the Business Combination less franchise and income takes payable, divided by (B) the total number of
Public Shares then outstanding (the “ Tender Redemption Price”).
If, however, the Company elects not to file such tender offer documents, a stockholder
vote is required by law in connection with the initial Business Combination, or the Company
decides to hold a stockholder vote for business or other legal reasons, the Company will
submit such Business Combination to the Company’s stockholders for their approval
(“Business Combination Vote”). With respect to the initial Business Combination
Vote, if any, the Initial Stockholders have agreed to vote all of their Founder’s Shares in accordance with
the majority of the votes cast by the Public Stockholders and to vote any other shares of
Common Stock purchased during or after the Offering in favor of the Company’s initial
Business Combination. If the Company seeks stockholder approval of the initial Business
Combination, the Company will offer to each Public Stockholder holding shares of Common
Stock the right to have its shares redeemed in conjunction with a proxy solicitation
pursuant to the proxy rules of the Commission at a per share redemption price (the
“Vote Redemption Price”, and collectively with the Tender Redemption Price, the “Redemption Price”) equal to (I) the aggregate amount then on deposit in the Trust
Account as of two business days prior to the consummation of the Business Combination less franchise and income taxes payable, divided by (II) the total number of Public Shares
then outstanding. If the Company seeks stockholder approval of the initial Business
Combination, the Company may proceed with such Business Combination only if a majority of
the shares voted are voted to approve such Business Combination.
If, after seeking and receiving such stockholder approval, the Company elects to so proceed,
it will redeem shares, at the Redemption Price, from those Public Stockholders who
affirmatively requested such redemption. Only Public Stockholders holding shares of Common
Stock who properly exercise their redemption rights, in accordance with the applicable
tender offer or proxy materials related to such Business Combination, shall be entitled to
receive distributions from the Trust Account in connection with 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 in connection therewith. In the event that the
Company does not effect a Business Combination by twenty-one (21) months from the date of
the consummation of the Offering, the Company will (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible, redeem 100% of the Public
Shares then outstanding at a per share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account (including (a) the proceeds held in the Trust Account
from the Offering and the sale of the Sponsor Warrants that are not released for Open Market
Purchases, (b) the amount held in the Trust Account representing the Deferred Discount and
(c) any interest income earned on the funds held in the Trust
Account, less franchise and income taxes payable and less up to $100,000 of such net interest to pay dissolution expenses,
that are not released to the Company to cover its operating expenses in accordance with
Section 5(u)), divided by the number of Public Shares then outstanding, together with the
contingent right to receive, following the Company’s dissolution, a pro rata share
of the balance of the Company’s net assets that would otherwise
be payable to holders of the Common Stock under Delaware law, if any, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining
stockholders and of the Company’s board of directors, dissolve and liquidate, subject in
each case to the Company’s obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. Only Public Stockholders holding shares of
Common Stock included in the Securities shall be entitled to receive such redemption amounts
and the Company shall pay no such redemption amounts or any distributions in liquidation
with respect to any other shares of capital stock of the Company.
(3) In the event that the Company desires or is required by an applicable law or
regulation to cause an announcement (“Business Combination Announcement”) to be
placed in The Wall Street Journal, The New York Times or any other news or media publication
or outlet
or to be made via a public filing with the Commission announcing the consummation of
the Business Combination that indicates that the Underwriters were the underwriters in the
Offering, the Company shall supply the Representative with a draft of the Business
Combination Announcement and provide the Representative with a reasonable advance
opportunity to comment thereon, subject to the agreement of the Underwriters to keep
confidential such draft announcement in accordance with the Representative’s standard
policies regarding confidential information.
(dd) Upon the consummation of the initial Business Combination, the Company will pay to the
Representative, on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred
Discount will be made out of the proceeds of this offering held in the Trust Account. The
Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds
held in the Trust Account representing the Deferred Discount. If the Company fails to consummate
its initial Business Combination within twenty one (21) months from the date of the consummation
of the Offering, the Deferred Discount will not be paid to the Representative and will, instead,
be included in the Liquidation distribution of the proceeds held in the Trust Account made to the
Public Stockholders. In connection with any such Liquidation, the Underwriters forfeit any rights
or claims to the Deferred Discount, including any accrued interest thereon.
(ee) During such time as the Securities, Common Stock and Warrants are quoted on the OTC
Bulletin Board (or any successor trading market such as the Bulletin Board Exchange) or the Pink
Sheets, LLC (or similar publisher of quotations) and no other automated quotation system, the
Company shall provide to the Representative, at its expense, to the extent reasonably available,
such reports published by FINRA or the Pink Sheets, LLC relating to price and trading of the
Securities, Common Stock and Warrants, as the Representative shall reasonably request. In addition
to the requirements of the preceding sentence, for a period of two (2) years from the Closing
Date, the Company, at its expense, shall provide the Representative a subscription to the
Company’s weekly Depository Transfer Company Security Position Reports.
(ff) The Company shall engage Xxxxxxx XxXxxxxxx LLP to deliver to the Representative on or
before the Effective Date, a written report detailing those states in which the Securities, Common
Stock and Warrants may be traded in non-issuer transactions under the Blue Sky laws of the fifty
(50) States (the “Secondary Market Trading Survey”).
(gg) The Company will endeavor in good faith, in cooperation with the Representative, at or
prior to the time the Registration Statement becomes effective, to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in any jurisdiction
where, as a result thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. Until the earliest of (i)
the date on which all Underwriters shall have ceased to engage in market-making activities in
respect of the Securities, (ii) the date on which the Securities are listed or quoted, as the case
may be, on the New York Stock Exchange, the NYSE American Stock Exchange or the Nasdaq Stock
Market (or any successor to such entities) and (iii) the date of the liquidation of the Company
(the period from the Effective Date to such earliest date, the “Blue Sky Compliance
Period”), in each jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary or advisable, use
all reasonable efforts to file and make such statements or reports at such times as are or may be
required to qualify the Securities for offering and sale under the securities laws of such
jurisdiction.
(hh) During the Blue Sky Compliance Period, the Company shall promptly take such action as
may be reasonably requested by the Representative to maintain secondary market trading in such
other states as may be reasonably requested by the Representative.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be,
shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) The Prospectus, and any supplement thereto, have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, counsel
for the Company, to have furnished to the Representative their opinion, dated the Closing Date and
addressed to the Representative in the form attached as Exhibit A hereto.
(c) The Representative shall have received from Xxxxxxx XxXxxxxxx LLP, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date and addressed to the
Representative, with respect to the issuance and sale of the Securities, the Registration
Statement, the Statutory Prospectus, the Prospectus (together with any supplement thereto) and
other related matters as the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Representative a certificate of the Company,
signed by the Chief Executive Officer and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement each Preliminary Prospectus, the Prospectus and any amendment
or supplement thereto, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and
correct on and as of the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement or any
notice objecting to its use has been issued and no proceedings for that purpose have been
instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the Statutory
Prospectus and the Prospectus (exclusive of any supplement thereto), there has been no
Material Adverse Effect, except as set forth in or contemplated in the Statutory Prospectus
and the Prospectus (exclusive of any supplement thereto).
(e) The Company shall have requested and caused KPMG to have furnished to the Representative,
at the Execution Time and at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the Representative,
confirming that they are a registered public accounting firm that is independent with respect
to the Company within the meaning of the Act and the Exchange Act and the applicable rules and
regulations adopted by the Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company as of ___, 2010 and for the period
___, 2010 (inception) to ___, 2010, in accordance with Statement on Auditing
Standards No. 100 and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules
included in the Registration Statement, the Statutory Prospectus and the Prospectus and
reported on by them comply as to form with the applicable accounting requirements of the Act
and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial statements made
available by the Company; if any; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 100, of the unaudited interim
financial information as of ___, 2010 and for the period ___, 2010
(inception) to ___, 2010; carrying out certain specified procedures (but not an
audit in accordance with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings, if any, of the stockholders, directors and audit,
governance and nominating committees of the Company; and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to ___, 2010, nothing
came to their attention which caused them to believe that:
(1) any unaudited financial statements included in the Registration Statement, the
Statutory Prospectus and the Prospectus do not comply as to form with applicable accounting
requirements of the Act and with the related rules and regulations adopted by the Commission
with respect to registration statements on Form S-1; and said unaudited financial statements
are not in conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included in the
Registration Statement, the Statutory Prospectus and the Prospectus; and
(2) with respect to the period subsequent to ___, 2010, there were any
changes, at a specified date not more than five days prior to the date of the letter, in the
long-term debt of the Company or capital stock of the Company or decreases in the
stockholders’ equity of the Company as compared with the amounts shown on the ___,
2010 balance sheet included in the Registration Statement, the Statutory Prospectus and the
Prospectus, except in all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary by the Representative;
(iii) they have performed certain other specified procedures as a result of which they
determined that certain information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration Statement, the Statutory
Prospectus and the Prospectus, including the information set forth under the captions
“Dilution” and “Capitalization” in the Statutory Prospectus and the
Prospectus, agrees with the accounting records of the Company, excluding any questions of
legal interpretation.
References to the Prospectus in this paragraph (e) include any supplement thereto at the date
of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is
given in the Registration Statement (exclusive of any amendment thereof), the Statutory Prospectus
and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (e) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or affecting the financial
condition, earnings, business or properties of the Company, whether or not arising from
transactions in the ordinary course of business, except as set forth in or contemplated in the
Statutory Prospectus and the Prospectus (exclusive of any supplement thereto) the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representative, so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof), the Statutory Prospectus and the Prospectus (exclusive of
any supplement thereto).
(g) Prior to the Closing Date, the Company shall have furnished to the Representative such
further information, certificates and documents as the Representative may reasonably request.
(h) FINRA shall not have raised any objection with respect to the fairness or reasonableness
of the underwriting or other arrangements of the transactions contemplated hereby.
(i) The Securities shall have been authorized for quotation on the OTC Bulletin Board, and
satisfactory evidence of such actions shall have been provided to the Representative.
(j) On the Effective Date, the Company shall have delivered to the Representative executed
copies of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the
Warrant Subscription Agreement, the Services Agreement and each of the Insider Letters.
(k) On or before the Effective Date, the Representative shall have received the Secondary
Market Trading Survey from Xxxxxxx XxXxxxxxx LLP.
(l) No order preventing or suspending the sale of the Units in any jurisdiction designated by
the Representative pursuant to Section 5(gg) hereof shall have been issued as of the Closing Date,
and no proceedings for that purpose shall have been instituted or shall have been threatened.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the Representative. Notice of
such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of
Xxxxxxx XxXxxxxxx LLP, counsel for the Underwriters, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
unless otherwise indicated herein, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in
Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through the Representative on
demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each Underwriter, each
person who controls any Underwriter within the meaning of either the Act or the Exchange Act and
each affiliate of each Underwriter against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus or in any amendment thereof
or supplement thereto, or arise out of or are based upon 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, and agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; 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 any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Underwriter through the Representative specifically for
inclusion therein, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described in the last sentence of Section 8(b) hereof.
This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representative specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges that the statements
set forth (i) in the last paragraph of the cover page regarding delivery of the Securities and
(ii) under the heading “Underwriting”, (w) the list of Underwriters and their respective
participation in the sale of the Securities, (x) the sentences related to concessions and
reallowances, (y) the paragraph related to stabilization, syndicate covering transactions and
penalty bids and (z) the sections related to state blue sky information, in the Preliminary
Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in the Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying
party’s choice at the indemnifying party’s expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provided, however, that
such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action, suit or
proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company
and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively “Losses”) to which the Company and one
or more of the Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the Underwriters on the other
from the offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any reason, the
Company and the Underwriters severally shall contribute 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 of the Underwriters on the other in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to
the total underwriting discounts and commissions, in each case as set forth on the cover page of
the Prospectus. Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation which does not take account of the
equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For
purposes of this Section 8, each person who controls an Underwriter within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall
have the same rights to contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate amount of Securities set forth
opposite the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however, that
in the event that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule I hereto, the remaining Underwriters shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five
Business Days, as the Representative shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s
Units, Common Stock or Warrants shall have been suspended by the Commission, the Company shall not
have obtained authorization for quotation of the Common Stock, Warrants, or Units on the OTC
Bulletin Board or successor trading market, or trading in securities generally on the New York
Stock Exchange or quotation on the OTC Bulletin Board (or successor trading market) shall have been
suspended or limited or minimum prices shall have been established on such exchange or trading
market, (ii) a banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment of the
Representative, impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Statutory Prospectus or the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representative, will be mailed, delivered or telefaxed to the
Citigroup Global Markets Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: General Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
(000) 000-0000 and confirmed to it at 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
attention of Xxxxxx X. Xxxxxx and mailed, delivered or telefaxed to (000) 000-0000 and confirmed to
the Company’s counsel at Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxxxxxxxx.
13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
14. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale
of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on
the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the
Company and (c) the Company’s engagement of the Underwriters in connection with the offering and
the process leading up to the offering is as independent contractors and not in any other capacity.
Furthermore, the Company agrees that it is solely responsible for making its own judgments in
connection with the offering (irrespective of whether any of the Underwriters has advised or is
currently advising the Company on related or other matters). The Company agrees that it will not
claim that the Underwriters have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Company, in connection with such transaction or the
process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of them, with respect to
the subject matter hereof.
16. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.
17. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.
18. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
19. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
20. Definitions. The terms that follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by law to
close in New York City.
“Commission” shall mean the Securities and Exchange Commission.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or
becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule
405.
“Liquidation” shall mean the distributions of the Trust Account to the Public
Stockholders in connection with the redemption of shares of Common Stock held by the Public
Stockholders pursuant to the terms of the Company’s Amended and Restated Certificate of
Incorporation, as amended, if the Company fails to consummate a Business Combination.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in
paragraph 1(a) above and any preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information.
“Prospectus” shall mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time.
“Registration Statement” shall mean the registration statement referred to in
paragraph 1(a) above, including exhibits and financial statements and any prospectus and prospectus
supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time
and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Registration Statement, as the case may be.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule
405”, “Rule 415”, “Rule 424”, “Rule 430A” and “Rule 433” refer
to such rules under the Act.
“Rule 430A Information” shall mean information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
“Rule 462(b) Registration Statement” shall mean a registration statement and any
amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the
registration statement referred to in Section 1(a) hereof.
“Statutory Prospectus” shall mean (i) the Preliminary Prospectus dated ___,
2010, relating to the Securities and (ii) the Time of Delivery Information, if any, set forth on
Schedule II hereto.
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If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
| Very truly yours, Xxxxx Acquisition Company II, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Citigroup Global Markets Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
| Number of Underwritten Securities | |||
Underwriters |
to be Purchased | ||
| Citigroup Global Markets Inc. Deutsche Bank Securities Inc. |
|||
Total |
20,000,000 | ||
SCHEDULE II
TIME OF DELIVERY INFORMATION
EXHIBIT A
