10,000,000 Units ASIA SPECIAL SITUATION ACQUISITION CORP. FORM OF UNDERWRITING AGREEMENT
Exhibit 1.1
10,000,000 Units
FORM OF UNDERWRITING AGREEMENT
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representative of the Underwriters
named on Schedule A hereto
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As Representative of the Underwriters
named on Schedule A hereto
Ladies and Gentlemen:
The undersigned, Asia Special Situation Acquisition Corp., a Cayman Islands company
(“Company”), hereby confirms its agreement with Maxim Group LLC (hereinafter referred to as “you,”
“Maxim” or the “Representative”) and with the other underwriters named on Schedule A hereto for
which Maxim is acting as Representative (the Representative and the other Underwriters being
collectively referred to herein as the “Underwriters” or, individually, an “Underwriter”) as
follows:
1. Purchase and Sale of Securities.
1.1 Firm Securities.
1.1.1 Purchase of Firm Units. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell, severally and not jointly, to the several Underwriters, an aggregate of 10,000,000
units (the “Firm Units”) of the Company at a purchase price (net of discounts and commissions, $.30
of which shall be deposited into the Trust Fund (as defined herein)) of $9.30 per Firm Unit. The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm
Units set forth opposite their respective names on Schedule A attached hereto and made a part
hereof at a purchase price (net of discounts and commissions, $.30 of which shall be deposited into
the Trust Fund) of $9.30 per Firm Unit. The Firm Units are to be offered initially to the public
(the “Offering”) at the offering price of $10.00 per Firm Unit. Each Firm Unit consists of one
share of the Company’s ordinary shares, par value $.0001 per share (the “Ordinary Shares”), and one
warrant to purchase one Ordinary Share (the “Warrant(s)”). The Ordinary Shares and the Warrants
included in the Firm Units will not be separately transferable until the earlier to occur of 10
business days following: (i) the expiration of the Over-allotment Option (as defined in Section 1.2
hereof), or (ii) the exercise of the Over-allotment Option in full. Maxim may decide to allow
continued trading of the Units following such separation. In no event will the Company allow
separate trading until the preparation of an audited balance
sheet of the Company reflecting receipt by the Company of the proceeds of the Offering and the
filing of such audited balance sheet with the Commission (as herein defined) on a Form 8-K or
similar form by the Company which includes such balance sheet. Each Warrant entitles its holder to
purchase one Ordinary Share for $7.50 per share during the period commencing on the later of (a)
the consummation by the Company of its “Business Combination” or (b) one year from the effective
date of the Registration Statement (“Effective Date”) and terminating on the four-year anniversary
of the Effective Date. As used herein, the term “Business Combination” shall mean any acquisition
by capital stock exchange, asset or stock acquisition or other similar business combination
consummated by capital stock exchange with, purchasing all or substantially all of the assets of,
or engaging in any other similar business combination, or control through contractual arrangements,
of one or more unidentified operating businesses that are either located in Asia, provide products
or services to customers located in Asia, or invest in Asia. The Company may enter into a Business
Combination with a company in any industry, although the Company’s initial focus will be on
acquiring an operating business in the leisure and hospitality or financial services industries,
that is located in or providing products or services to customers in China. The Company has the
right to redeem the Warrants (including the Representative’s Warrants) upon not less than thirty
(30) days written notice at a price of $0.01 per Warrant at any time after the Warrants become
exercisable; so long as the last sales price of the Ordinary Shares has been at least $14.25 for
any twenty (20) trading days within a thirty (30) trading day period ending on the third Business
Day prior to the day on which notice is given. As used herein, the term “Business Day” shall mean
any day other than a Saturday, Sunday or any day on which national banks in New York, New York are
not open for business.
1.1.2 Payment and Delivery. Delivery and payment for the Firm Units shall be made at
10:00 A.M., New York time, on the third Business Day following the Effective Date of the
Registration Statement (or the fourth Business Day following the Effective Date, if the
Registration Statement is declared effective after 4:30 p.m.) or at such earlier time as shall be
agreed upon by the Representative and the Company at the offices of the Representative or at such
other place as shall be agreed upon by the Representative and the Company. The closing of the
public offering contemplated by this Agreement is referred to herein as the “Closing” and the hour
and date of delivery and payment for the Firm Units is referred to herein as the “Closing Date.”
Payment for the Firm Units shall be made on the Closing Date at the Representative’s election by
wire transfer in Federal (same day) funds or by certified or bank cashier’s check(s) in New York
Clearing House funds. $100,000,000 ($114,250,000 if the Over-allotment Option (as defined in
Section 1.2) is exercised in full), or $10.00 per unit, of the proceeds received by the Company for
the Firm Units and from the Private Placement (as defined in Section 1.4) shall be deposited in the
trust fund established by the Company for the benefit of the public stockholders as described in
the Registration Statement (the “Trust Fund”) pursuant to the terms of an Investment Management
Trust Agreement (the “Trust Agreement”) which amount includes up to $3,000,000 ($0.30 per Firm
Unit; $3,450,000 if the Over-allotment Option is exercised in full) payable to the Representative
as contingent compensation upon consummation of a Business Combination. However, in the event the
Over-allotment Option (as defined below) is exercised in full, to the extent the funds held in the
Trust Fund are less than $10.00 per share, the first $750,000 in interest earned on the amount held
in the Trust Fund (net of taxes payable) will be used to cover such shortfall to bring the amount
held in the Trust Fund for the benefit of the public stockholders to an aggregate of $115,000,000
($10.00 per share). Any remaining proceeds
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(less commissions, expense allowance and actual expense payments or other fees payable
pursuant to this Agreement) shall be paid to the order of the Company upon delivery to the
Representative of certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Units (or through the facilities of the Depository Trust Company (the “DTC”))
for the account of the Underwriters. The Firm Units 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 Firm Units for delivery, at least one full Business Day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender of payment by the
Representative for all the Firm Units.
1.2 Over-Allotment Option.
1.2.1 Option Units. For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Units, the Underwriters are hereby granted, severally
and not jointly, an option to purchase up to an additional 1,500,000 units from the Company (the
“Over-allotment Option”). Such additional 1,500,000 units shall be identical in all respects to
the Firm Units and are hereinafter referred to as “Option Units.” The Firm Units and the Option
Units are hereinafter collectively referred to as the “Units,” and the Units, the Ordinary Shares
and the Warrants included in the Units and the Ordinary Shares issuable upon exercise of the
Warrants are hereinafter referred to collectively as the “Public Securities.” The purchase price
to be paid for the Option Units (net of discounts and commissions) will be $9.30 per Option Unit
(of which $.30 of such discounts and commissions shall be deposited in the Trust Fund pursuant to
Section 1.5). The Option Units are to be offered initially to the public at the offering price of
$10.00 per Option Unit.
1.2.2 Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1
hereof may be exercised by the Representative as to all (at any time) or any part (from time to
time) of the Option Units within 45 days after the Effective Date. The Underwriters will not be
under any obligation to purchase any Option Units prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to
the Company from the Representative, which must be confirmed in writing by overnight mail or
facsimile transmission setting forth the number of Option Units to be purchased and the date and
time for delivery of and payment for the Option Units, which will not be later than five Business
Days after the date of the notice or such other time as shall be agreed upon by the Company and the
Representative, at the offices of the Representative or at such other place or in such other manner
as shall be agreed upon by the Company and the Representative. If such delivery and payment for
the Option Units does not occur on the Closing Date, the date and time of the closing for such
Option Units will be as set forth in the notice (hereinafter the “Option Closing Date”). Upon
exercise of the Over-allotment Option, the Company will become obligated to convey to the
Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Units specified in such notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall be made on the Option
Closing Date at the Representative’s election by wire transfer in Federal (same day)
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funds or by certified or bank cashier’s check(s) in New York Clearing House funds, by deposit
of the sum of $9.30 per Option Unit (of which $.30 of the Underwriters discounts and commission
shall be deposited in the Trust Fund pursuant to Section 1.5) in the Trust Fund pursuant to the
Trust Agreement upon delivery to the Representative of certificates (in form and substance
satisfactory to the Underwriters) representing the Option Units (or through the facilities of DTC)
for the account of the Underwriters. The certificates representing the Option Units 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 or the Option Closing Date, as the case
may be, 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 full
Business Day prior to such Closing Date or Option Closing Date.
1.3 Representative’s Purchase Option.
1.3.1 Purchase Option. As additional consideration, the Company hereby agrees to
issue and sell to the Representative (and/or its designees) on the Effective Date an option
(“Representative’s Purchase Option”) for the purchase of an aggregate of 700,000 units (the
“Representative’s Units”) for an aggregate purchase price of $100.00. The Representative’s
Purchase Option shall be exercisable, in whole or in part, commencing on the later of the
consummation of a Business Combination or six months from the Effective Date and expiring on the
five-year anniversary of the Effective Date at an initial exercise price per Representative’s Unit
of $12.50, which is equal to one hundred and ten percent (125%) of the initial public offering
price of a Unit. The Representative’s Purchase Option, the Representative’s Units, the Ordinary
Shares and the Warrants included in the Representative’s Units (the “Representative’s Warrants”)
and the Ordinary Shares issuable upon exercise of the Representative’s Warrants are hereinafter
referred to collectively as the “Representative’s Securities.” The Public Securities and the
Representative’s Securities are hereinafter referred to collectively as the “Securities.”
Representative understands and agrees there are significant restrictions against transferring the
Representative’s Purchase Option during the first six months after the Effective Date, as set forth
in Section 3 of the Representative’s Purchase Option.
1.3.2 Delivery and Payment. Delivery and payment for the Representative’s Purchase
Option shall be made on the Closing Date. The Company shall deliver to the Representative and its
designees upon payment therefor, certificates for the Representative’s Purchase Option in the name
or names and in such authorized denominations as the Representative may request.
1.4 Private Placement to Ho Capital Management, LLC. Prior to the Effective Date, Ho
Capital Management, LLC, purchased from the Company pursuant to the Subscription Agreement (as
defined in Section 2.23.2 hereof) an aggregate of 5,725,000 warrants (the “Placement Warrants”)
which are identical to the Warrants, except that the Placement Warrants while held by Ho Capital
Management, LLC, or its permitted assigns, shall not be subject to redemption and shall be
exercisable on a cashless basis, at a purchase price of $1.00 per Placement Warrant in a private
placement that occurred immediately prior to the entering into of this Agreement (the “Private
Placement”). The Placement Warrants and the Ordinary
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Shares issuable upon exercise of the Placement Warrants are hereinafter referred to
collectively as the “Placement Securities.” There was no placement agent in the Private Placement
and no party shall be entitled to a placement fee or expense allowance from the sale of the
Placement Securities.
1.5 Contingent Portion of Underwriters’ Discount. Representative, on behalf of itself
and the other Underwriters, agrees that 3.0% of the gross proceeds from the sale of the Firm Units
($3,000,000) and the Option Units (an aggregate of $3,450,000 if the Over-allotment Option is
exercised in full) (the “Contingent Discount”) will be deposited in and held in the Trust Fund and
payable to the Representative, on a pro rata basis in respect of any IPO Shares (defined in Section
7.6 hereof) which are not redeemed pursuant to Section 7.6 hereof upon the consummation of a
Business Combination. Representative, on behalf of itself and the other Underwriters, agrees the
several Underwriters shall forfeit any rights or claims to the Contingent Discount in respect of
any IPO Shares redeemed pursuant to Section 7.6 hereof. In addition, in the event the Company is
unable to consummate a Business Combination and Continental Stock Transfer & Trust Company (“CST”
or “Escrow Agent”), the trustee of the Trust Fund, commences liquidation of the Trust Fund as
provided in the Trust Agreement, the Representative, on behalf of itself and the other
Underwriters, agrees that (i) the several Underwriters shall forfeit any rights or claims to the
Contingent Discount; and (ii) the Contingent Discount, together with all other amounts on deposit
in the Trust Fund, and any accrued interest thereon (net of taxes payable), shall be distributed on
a pro-rata basis among the holders of the Ordinary Shares included in the Units sold in the
Offering.
1.6 Corporate Finance Fee. A corporate finance fee of 1.0% of the gross proceeds from
the offer and sale of the Units shall be paid by the Company to Maxim on the Closing Date and each
Option Closing Date, as applicable, less $65,000 (“Advance”) previously advanced to Maxim by the
Company.
2. Representations and Warranties of the Company. The Company represents and warrants to
the Underwriters as follows:
2.1 Filing of Registration Statement.
2.1.1 Pursuant to the Act. The Company has filed with the Securities and Exchange
Commission (the “Commission”) a registration statement and an amendment or amendments thereto, on
Form S-1 (File No. 333-145163), including any related preliminary prospectus (the “Preliminary
Prospectus”, including any prospectus that is included in the Registration Statement immediately
prior to the effectiveness of the Registration Statement), for the registration of the Public
Securities under the Act, which registration statement and amendment or amendments have been
prepared by the Company in conformity with the requirements of the Act, and the rules and
regulations (the “Regulations”) of the Commission under the Act. The conditions for use of Form
S-1 to register the Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied in all material respects. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time the registration
statement becomes effective (including the prospectus, financial statements, schedules, exhibits
and all other documents filed as a part
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thereof or incorporated therein and all information deemed to be a part thereof as of such
time pursuant to Rule 430A of the Regulations), is hereinafter called the “Registration Statement,”
and the form of the final prospectus dated the Effective Date included in the Registration
Statement (or, if applicable, the form of final prospectus containing information permitted to be
omitted at the time of effectiveness by Rule 430A of the Regulations filed with the Commission
pursuant to Rule 424 of the Regulations), is hereinafter called the “Prospectus.” For purposes of
this Agreement, “Time of Sale”, as used in the Act, means 5:00 p.m., New York City time, on the
date of this Agreement. If the Company has filed, or is required pursuant to the terms hereof to
file, a registration statement pursuant to Rule 462(b) under the Securities Act registering the
Securities (a “Rule 462(b) Registration Statement”), then, unless otherwise specified, any
reference herein to the term “Registration Statement” shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes
effective upon filing, no other document with respect to the Registration Statement has heretofore
been filed with the Commission. All of the Public Securities have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement
is filed, will be duly registered under the Securities Act with the filing of such Rule 462(b)
Registration Statement. The Registration Statement has been declared effective by the Commission
on the date hereof. If, subsequent to the date of this Agreement, the Company or the
Representative has determined that at the Time of Sale the Prospectus included an untrue statement
of a material fact or omitted a statement of material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, and have agreed
to provide an opportunity to purchasers of the Firm Units to terminate their old purchase contracts
and enter into new purchase contracts, the Prospectus will be deemed to include any additional
information available to purchasers at the time of entry into the first such new purchase contract.
2.1.2 Pursuant to the Exchange Act. The Company has filed with the Commission a Form
8-A (File Number 000- ) providing for the registration under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), of the Units, the Ordinary Shares and the Warrants. The
registration of the Units, Ordinary Shares and Warrants under the Exchange Act will be declared
effective by the Commission on or prior to the Effective Date.
2.2 No Stop Orders, Etc. Neither the Commission nor, to the best of the Company’s
knowledge, any state regulatory authority has issued any order or threatened to issue any order
preventing or suspending the use of any Preliminary Prospectus or has instituted or, to the best of
the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
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2.3 Disclosures in Registration Statement.
2.3.1 10b-5 Representation. At the time the Registration Statement became effective,
upon the filing or first use (within the meaning of the Regulations) of the Prospectus and at the
Closing Date and the Option Closing Date, if any, the Registration Statement and the Prospectus
contained or will contain all material statements that are required to be stated therein in
accordance with the Act and the Regulations, and did or will in all material respects conform to
the requirements of the Act and the Regulations. Neither the Registration Statement nor any
Preliminary Prospectus or the Prospectus, nor any amendment or supplement thereto, on their
respective dates, did or will contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein (in the
case of the Preliminary Prospectus and the Prospectus, in light of the circumstances under which
they were made), not misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement for the registration of the
Securities or any amendment thereto or pursuant to Rule 424(a) of the Regulations) or first used
(within the meaning of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission or first used (within the meaning of the Regulations), such
Preliminary Prospectus and any amendments thereof and supplements thereto complied or will have
been corrected in the Prospectus to comply in all material respects with the applicable provisions
of the Act and the Regulations and did not and will not contain an 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, in light of the circumstances under which they were made, not misleading.
The representation and warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriters by the Representative expressly for use in the
Registration Statement or Prospectus or any amendment therof or supplement thereto. It is
understood the statements set forth in the Prospectus under the heading “Underwriting” constitute,
for the purposes of this Agreement, information furnished by the Representative with respect to the
Underwriters.
2.3.2 Disclosure of Agreements. The agreements and documents described in the
Registration Statement, the Preliminary Prospectus and the Prospectus conform to the descriptions
thereof contained therein and there are no agreements or other documents required to be described
in the Registration Statement, the Preliminary Prospectus or the Prospectus or to be filed with the
Commission as exhibits to the Registration Statement, that have not been so described or filed.
Each agreement or other instrument (however characterized or described) to which the Company is a
party or by which its property or business is or may be bound or affected and (i) that is referred
to in the Registration Statement, Preliminary Prospectus or the Prospectus or attached as an
exhibit thereto, or (ii) is material to the Company’s business, has been duly and validly executed
by the Company, is in full force and effect in all material respects and is enforceable against the
Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities laws, and (z) that the
remedy of specific performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of
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the court before which any proceeding therefor may be brought, and none of such agreements or
instruments has been assigned by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in breach or default thereunder and, to the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or both, would constitute
a breach or default thereunder. To the Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a material violation of
any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental laws and regulations.
2.3.3 Prior Securities Transactions. 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 since the date of the Company’s formation,
except as disclosed in the Registration Statement.
2.3.4 Regulations. The disclosures in the Registration Statement, the Preliminary
Prospectus and the Prospectus concerning the effects of Federal, State and local regulation on the
Company’s business as currently contemplated fairly summarize, to the best of the Company’s
knowledge, such effects and do not omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.
2.4 Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Change. Except as contemplated in the Prospectus, since the
respective dates as of which information is given in the Registration Statement, any Preliminary
Prospectus and/or the Prospectus, except as otherwise specifically stated therein: (i) there has
been no material adverse change in the condition, financial or otherwise, or business prospects of
the Company; (ii) there have been no material transactions entered into by the Company, other than
as contemplated pursuant to this Agreement; (iii) no member of the Company’s board of directors or
management has resigned from any position with the Company and (iv) no event or occurrence has
taken place which materially impairs, or would likely materially impair, with the passage of time,
the ability of the members of the Company’s board of directors or management to act in their
capacities with the Company as described in the Registration Statement and the Prospectus.
2.4.2 Recent Securities Transactions, Etc. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the Registration Statement
and the Prospectus, and except as may otherwise be indicated or contemplated herein or therein, the
Company has not: (i) issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
2.5 Independent Accountants. To the best of the Company’s knowledge, Xxxxxxxxx, Xxxx
& Company, P.C. (“RKC”), whose report is filed with the Commission as part of the
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Registration Statement and included in the Registration Statement, the Preliminary Prospectus
and the Prospectus, are independent accountants as required by the Act and the Regulations and the
Public Company Accounting Oversight Board (including the rules and regulations promulgated by such
entity, the “PCAOB”). To the best of the Company’s knowledge, RKC is duly registered and in good
standing with the PCAOB. RKC has not, during the periods covered by the financial statements
included in the Registration Statement and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act.
2.6 Financial Statements; Statistical Data.
2.6.1 Financial Statements. The financial statements, including the notes thereto and
supporting schedules included in the Registration Statement, the Preliminary Prospectus and the
Prospectus fairly present the financial position and the results of operations of the Company at
the dates and for the periods to which they apply; and such financial statements have been prepared
in conformity with generally accepted accounting principles, consistently applied throughout the
periods involved; and the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. To the best of the Company’s knowledge, no
other financial statements or supporting schedules are required to be included or incorporated by
reference in the Registration Statement, the Preliminary Prospectus or the Prospectus. The
Registration Statement, the Preliminary Prospectus and the Prospectus disclose all material
off-balance sheet transactions, arrangements, obligations (including contingent obligations), and
other relationships of the Company 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. To the best of the Company’s knowledge, there are
no pro forma or as adjusted financial statements which are required to be included in the
Registration Statement and the Prospectus in accordance with Regulation S-X which have not been
included as so required.
2.6.2 Statistical Data. The statistical, industry-related and market-related data
included in the Registration Statement, the Preliminary 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.
2.7 Authorized Capital; Options, Etc. The Company had at the date or dates indicated
in the Registration Statement, the Preliminary Prospectus and the Prospectus, as the case may be,
duly authorized, issued and outstanding capitalization as set forth in the Registration Statement,
the Preliminary Prospectus and the Prospectus. Based on the assumptions stated in the Registration
Statement, the Preliminary Prospectus and the Prospectus, the Company will have on the Closing Date
the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by,
the Registration Statement, the Preliminary Prospectus and the Prospectus, on the Effective Date of
the Prospectus and on the Closing Date and the Option Closing Date, if any, there will be no
options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued
Ordinary Shares of the Company or any security convertible into shares of Ordinary Shares of the
Company, or any contracts or
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commitments to issue or sell Ordinary Shares or any such options, warrants, rights or
convertible securities.
2.8 Valid Issuance of Securities, Etc.
2.8.1 Outstanding Securities. All issued and outstanding securities of the Company
(including, without limitation, the Placement Securities) have been duly authorized and validly
issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with
respect thereto, and are not subject to personal liability by reason of being such holders; 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 Public
Securities conform to all statements relating thereto contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus. Subject to the disclosure contained in the Registration
Statement, the Preliminary Prospectus and the Prospectus with respect to the Placement Securities,
the offers and sales of the outstanding Ordinary Shares were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky laws or, based in part on
the representations and warranties of the purchasers of such Ordinary Shares, exempt from such
registration requirements.
2.8.2 Securities Sold Pursuant to this Agreement. The Securities have been duly
authorized and reserved for issuance and when issued and paid for, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject to personal liability
by reason of being such holders; the Securities are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual rights granted by the
Company; and all corporate action required to be taken for the authorization, issuance and sale of
the Securities has been duly and validly taken. The Securities conform in all material respects to
all statements with respect thereto contained in the Registration Statement, the Preliminary
Prospectus and the Prospectus, as the case may be. When issued, the Representative’s Purchase
Option, the Representative’s Warrants and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment of the respective
exercise prices therefor, the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s Purchase Option, the Representative’s
Warrants and the Warrants are enforceable against the Company in accordance with their respective
terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally; (ii) as enforceability of any
indemnification or contribution provision may be limited under federal and state securities laws;
and (iii) that the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The Ordinary Shares issuable upon exercise of the
Representative’s Purchase Option, the Representative’s Warrants and the Warrants have been reserved
for issuance upon the exercise of the Representative’s Purchase Option, the Representative’s
Warrants and the Warrants, respectively, and, when issued in accordance with the terms of such
securities, will be duly and validly authorized, validly issued, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal liability by reason of being such
holders.
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2.8.3 Placement Warrants. The Placement Warrants constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment of the respective
exercise prices therefor, the number and type of securities of the Company called for thereby in
accordance with the terms thereof, and such Placement Warrants are enforceable against the Company
in accordance with their respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii)
as enforceability of any indemnification or contribution provision may be limited under federal and
state securities laws; and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought. The Ordinary Shares issuable upon
exercise of the Placement Warrants have been reserved for issuance upon the exercise of the
Placement Warrants and, when issued in accordance with the terms of the Placement Warrants, will be
duly and validly authorized, validly issued, fully paid and non-assessable, and the holders thereof
are not and will not be subject to personal liability by reason of being such holders.
2.8.4 No Integration. Subject to the disclosure contained in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus with respect to the Placement
Securities, 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 or the
Regulations with the offer and sale of the Public Securities pursuant to the Registration
Statement.
2.9 Registration Rights of Third Parties. Except as set forth in the Registration
Statement, the Preliminary Prospectus or 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.
2.10 Validity and Binding Effect of Agreements. This Agreement, the Warrant Agreement
(as defined in Section 2.22 hereof), the Trust Agreement, the Service Agreement (as defined in
Section 3.7.2 hereof), the Subscription Agreement (as defined in Section 2.23.2 hereof) and the
Escrow Agreement (as defined in Section 2.23.3 hereof) have been duly and validly authorized by the
Company and constitute valid and binding agreements of the Company, enforceable against the Company
in accordance with their respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii)
as enforceability of any indemnification or contribution provision may be limited under the federal
and state securities laws; and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
2.11 No Conflicts, Etc. The execution, delivery, and performance by the Company of
this Agreement, the Warrant Agreement, Representative’s Purchase Option, the Trust Agreement, the
Service Agreement, the Subscription Agreement and the Escrow Agreement, the consummation by the
Company of the transactions herein and therein contemplated and the
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compliance by the Company with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i) result in a breach of, or conflict
with any of the terms and provisions of, or constitute a default under, or result in the creation,
modification, termination or imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any agreement or instrument to which the Company is
a party except pursuant to the Trust Agreement; (ii) result in any violation of the provisions of
the Amended and Restated Memorandum and Articles of Association of the Company; or (iii) to the
best of the Company’s knowledge, violate any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over
the Company or any of its properties or business.
2.12 No Defaults; Violations. No material default exists in the due performance and
observance of any term, covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which
the Company is a party or by which the Company may be bound or to which any of the properties or
assets of the Company is subject. The Company is not in violation of any term or provision of its
Amended and Restated Memorandum and Articles of Association or in violation of any material
franchise, license, permit, or, to the best of the Company’s knowledge, applicable law, rule,
regulation, judgment or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or businesses.
2.13 Corporate Power; Licenses; Consents.
2.13.1 Conduct of Business. The Company has all requisite corporate power and
authority, and has all necessary authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and bodies that it needs as of the date
hereof to conduct its business for the purposes described in the Registration Statement, the
Preliminary Prospectus and the Prospectus. The disclosures in the Registration Statement and the
Prospectus concerning the effects of federal, state and local regulation on this Offering and the
Company’s business purpose as currently contemplated are correct in all material respects and do
not omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.
Since its formation, the Company has conducted no business and has incurred no liabilities other
than in connection with and in furtherance of the Offering.
2.13.2 Transactions Contemplated Herein. The Company has all corporate power and
authority to enter into this Agreement and to carry out the provisions and conditions hereof, and
all consents, authorizations, approvals and orders required in connection therewith have been
obtained. No consent, authorization or order of, and no filing with, any court, government agency
or other body is required for the valid issuance, sale and delivery, of the Securities and the
consummation of the transactions and agreements contemplated by this Agreement, the Warrant
Agreement, Representative’s Purchase Option, the Trust Agreement, the Service Agreement, the
Subscription Agreement and the Escrow Agreement and as contemplated by the Prospectus, except with
respect to applicable federal and state securities laws and the rules and regulations promulgated
by the National Association of Securities Dealers, Inc. (the “NASD”).
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2.14 D&O Questionnaires. All information contained in the questionnaires (the
“Questionnaires”) completed by each of the Company’s stockholders immediately prior to the Offering
(the “Initial Stockholders”) and each of the Company’s officers and directors and provided to the
Underwriters as an exhibit to his or her Insider Letter (as defined in Section 2.23.1) 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 each Initial Stockholder, officer or director, to
become inaccurate and incorrect.
2.15 Litigation; Governmental Proceedings. There is no action, suit, proceeding,
inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the best
of the Company’s knowledge, threatened against, or involving the Company or, to the best of the
Company’s knowledge, any Initial Stockholder which has not been disclosed in the Registration
Statement, the Questionnaires, the Preliminary Prospectus and the Prospectus.
2.16 Good Standing. The Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the Cayman Islands and is duly qualified to
do business and is in good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of business requires such qualification, except where
the failure to qualify would not have a material adverse effect on the Company.
2.17 No Contemplation of a Business Combination. Prior to the date hereof, neither
the Company, its officers and directors, advisors, Sponsor nor the Initial Stockholders had, and as
of the Closing, the Company and such officers and directors, advisors, Sponsor and Initial
Stockholders will not have had: (a) any specific Business Combination under consideration or
contemplation or (b) any substantive interactions or discussions with any target business regarding
a possible Business Combination.
2.18 Transactions Affecting Disclosure to NASD.
2.18.1 Except as described in the Preliminary Prospectus and/or the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s,
consulting or origination fee by the Company or any Initial Stockholder with respect to the sale of
the Securities hereunder or any other arrangements, agreements or understandings of the Company or,
to the Company’s knowledge, any Initial Stockholder that may affect the Underwriters’ compensation,
as determined by the National Association of Securities Dealers, Inc. (the “NASD”).
2.18.2 The Company has not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) 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 NASD member; or (iii) to any person or entity that has
any direct or indirect affiliation or association with any NASD member, within the twelve months
prior to the Effective Date, other than payments to Maxim.
2.18.3 No officer, director, or beneficial owner of any class of the Company’s
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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,
a person associated, or affiliated with a member of the NASD.
2.18.4 No Company Affiliate is an owner of stock or other securities of any member of the NASD
(other than securities purchased on the open market).
2.18.5 No Company Affiliate has made a subordinated loan to any member of the NASD.
2.18.6 No proceeds from the sale of the Public Securities (excluding underwriting
compensation) or the Placement Securities will be paid to any NASD member, or any persons
associated or affiliated with a member of the NASD, except as specifically authorized herein and in
the Subscription Agreement.
2.18.7 Except with respect to Maxim, 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 NASD rules) of such an underwriter within the
180-day period prior to the initial filing date of the Registration Statement.
2.18.8 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 of the NASD.
2.18.9 No NASD member intending to participate in the Offering has a conflict of interest with
the Company. For this purpose, a “conflict of interest” exists when a member of the NASD and its
associated persons, parent or affiliates in the aggregate beneficially own 10% or more of the
Company’s outstanding subordinated debt or common equity, or 10% or more of the Company’s preferred
equity. “Members participating in the Offering” include managing agents, syndicate group members
and all dealers which are members of the NASD.
2.18.10 Except with respect to Maxim in connection with the Offering, the Company has not
entered into any agreement or arrangement (including, without limitation, any consulting agreement
or any other type of agreement) during the 180-day period prior to the initial filing date of the
Registration Statement, which arrangement or agreement provides for the receipt of any item of
value and/or the transfer of any warrants, options, or other securities from the Company to an NASD
member, any person associated with a member (as defined by NASD rules), any potential underwriters
in the Offering and any related persons.
2.19 Foreign Corrupt Practices Act. Neither the Company nor any of the Initial
Stockholders or any other person acting on behalf of the Company has, directly or indirectly, given
or agreed to give any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any governmental agency or instrumentality of any
government (domestic or foreign) or any political party or candidate for office (domestic or
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foreign) or any political party or candidate for office (domestic or foreign) or other person
who was, is, or may be in a position to help or hinder the business of the Company (or assist it in
connection with any actual or proposed transaction) that (i) might subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not
given in the past, might have had a material adverse effect on the assets, business or operations
of the Company as reflected in any of the financial statements contained in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus or (iii) if not continued in the
future, might adversely affect the assets, business, operations or prospects of the Company. The
Company’s internal accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.
2.20 Patriot Act. Neither the Company nor, to the Company’s knowledge, any officer,
director or Initial Stockholder has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money
Laundering Control Act of 1986, as amended, or (iii) 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.
2.21 Officers’ Certificate. Any certificate signed by any duly authorized officer of
the Company and delivered to Representative or to Representative’s counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.22 Warrant Agreement. The Company has entered into a warrant agreement with respect
to the Warrants, the Representative’s Warrants and the Placement Warrants with CST substantially in
the form filed as an exhibit to the Registration Statement (the “Warrant Agreement”), providing
for, among other things, the payment of a warrant solicitation fee as contemplated by Section 3.9
hereof.
2.23 Agreements With Initial Stockholders.
2.23.1 Insider Letters. The Company has caused to be duly executed legally binding
and enforceable agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally, (ii) as
enforceability of any indemnification, contribution or noncompete provision may be limited under
the federal and state securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought) annexed as exhibits to
the Registration Statement (the “Insider Letter”), pursuant to which each of the Initial
Stockholders of the Company agree to certain matters, including but not limited to, certain matters
described as being agreed to by them under the “Proposed Business” Section of the Prospectus.
2.23.2 Subscription Agreement. Ho Capital Management, LLC has executed and delivered
an agreement, annexed as an exhibit to the Registration Statement (the “Subscription Agreement”),
pursuant to which it has purchased an aggregate of 5,725,000 Placement Warrants
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in the Private Placement. Pursuant to the Subscription Agreement all of the proceeds from the
sale of the Placement Warrants will be deposited by the Company in the Trust Fund in accordance
with the terms of the Trust Agreement prior to the Closing.
2.23.3 Escrow Agreement. The Company has caused the Initial Stockholders to enter
into an escrow agreement (the “Escrow Agreement”) with the Escrow Agent substantially in the form
filed as an exhibit to the Registration Statement whereby the Ordinary Shares owned by the Initial
Stockholders (not including any Ordinary Shares underlying the Placement Warrants which any of them
may have purchased) will be held in escrow by the Escrow Agent, until the third anniversary of the
Effective Date. During such escrow period, the Initial Stockholders shall be prohibited from
selling or otherwise transferring such shares (except (a) to spouses and children of Initial
Stockholders and trusts established for their benefit, (b) after a Business Combination in a
transaction whereby all the outstanding shares of the Company are exchanged or converted into cash
or another entity’s securities and (c) as otherwise set forth in the Escrow Agreement) unless
approved by the Company’s public stockholders, but will retain the right to vote such shares. The
Escrow Agreement shall not be amended, modified or otherwise changed without the prior written
consent of Maxim, such consent not to be unreasonably withheld.
2.24 Investment Management Trust Agreement. The Company has entered into the Trust
Agreement with respect to certain proceeds of the Offering and the Private Placement substantially
in the form filed as an exhibit to the Registration Statement.
2.25 Covenants Not to Compete. No Initial Stockholder of the Company is subject to
any noncompetition agreement or non-solicitation agreement with any employer or prior employer
which could materially affect his ability to be an Initial Stockholder, employee, officer or
director of the Company.
2.26 Investments. No more than 45% of the “value” (as defined in Section 2(a)(41) of
the Investment Company Act of 1940 (“Investment Company Act”)) of the Company’s total assets
consist of, and no more than 45% of the Company’s net income after taxes is derived from,
securities other than “Government Securities” (as defined in Section 2(a)(16) of the Investment
Company Act).
2.27 Subsidiaries. The Company does not own an interest in any corporation,
partnership, limited liability company, joint venture, trust or other business entity.
2.28 Related Party Transactions. No relationship, direct or indirect, exists between
or among any of the Company or any Company Affiliate, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any Company Affiliate, on the other hand, which
is required by the Act, the Exchange Act or the Regulations to be described in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus which is not so described and 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, the
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Preliminary Prospectus and/or 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.
2.29 No Influence. The Company has not offered, or caused the Underwriters to offer,
the Firm Units to any person or entity with the intention of unlawfully influencing: (a) a customer
or supplier of the Company or any Company Affiliate 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.
2.30 Definition of “Knowledge”. As used in herein, the term “knowledge of the
Company” (or similar language) shall mean the knowledge of the officers and directors of the
Company who are named in the Prospectus, with the assumption that such officers and directors shall
have made reasonable and diligent inquiry of the matters presented.
3. Covenants of the Company. The Company covenants and agrees as follows:
3.1 Amendments to Registration Statement. The Company will deliver to the
Representative, prior to filing, any amendment or supplement to the Registration Statement or
Prospectus proposed to be filed after the Effective Date and not file any such amendment or
supplement to which the Representative shall reasonably object in writing.
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is required to be delivered under
the Act, the Company will use all reasonable efforts to comply with all requirements imposed upon
it by the Act, the Regulations and the Exchange Act and by the regulations under the Exchange Act,
as from time to time in force, so far as necessary to permit the continuance of sales of or
dealings in the Public Securities in accordance with the provisions hereof and the Prospectus. If
at any time when a Prospectus relating to the Public Securities is required to be delivered under
the Act, any event shall have occurred as a result of which, in the opinion of counsel for the
Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes
an untrue statement of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, or if it is necessary during such period to amend the Registration
Statement or amend or supplement the Prospectus to comply with the Act, the Company will notify the
Representative promptly and prepare and file with the Commission, subject to Section 3.1 hereof, an
appropriate amendment to the Registration Statement or amendment or supplement to the Prospectus
(at the expense of the Company) so as to correct such statement or omission or effect such
compliance.
3.2.2 Filing of Final Prospectus. The Company will file the Prospectus (in form and
substance satisfactory to the Representative) with the Commission pursuant to the requirements of
Rule 424 of the Regulations.
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3.2.3 Exchange Act Registration. For a period of five years from the Effective Date,
or until such earlier time upon which the Company is required to be liquidated, the Company will
use its best efforts to maintain the registration of the Units, Ordinary Shares and Warrants under
the provisions of the Exchange Act. The Company will not deregister the Units under the Exchange
Act without the prior written consent of Maxim.
3.2.4 Xxxxxxxx-Xxxxx Compliance. As soon as it is legally required to do so, the
Company shall take all actions necessary to obtain and thereafter maintain material compliance with
each applicable provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated thereunder and related or similar rules and regulations promulgated by any other
governmental or self regulatory entity or agency with jurisdiction over the Company.
3.3 Blue Sky Filing. 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 Public 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. 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 by the laws of such jurisdiction.
3.4 Delivery to Underwriters of Prospectuses. The Company will deliver to each of the
several Underwriters, without charge, from time to time during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act such number of copies of each
Preliminary Prospectus and Prospectus and all amendments and supplements to such documents as such
Underwriters may reasonably request and, as soon as the Registration Statement or any amendment or
supplement thereto becomes effective, deliver to Representative two original executed Registration
Statements, including exhibits, and all post-effective amendments thereto and copies of all
exhibits filed therewith or incorporated therein by reference and all original executed consents of
certified experts.
3.5 Effectiveness and Events Requiring Notice to the Representative. The Company will
use its best efforts to cause the Registration Statement to remain effective and will notify the
Representative immediately and confirm the notice in writing: (i) of the effectiveness of the
Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, or any post-effective
amendment thereto or preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of
the issuance by any state securities commission of any proceedings for the suspension of the
qualification of the Public Securities for offering or sale in any jurisdiction or of the
initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and
delivery to the Commission for filing of any amendment or supplement to the Registration Statement
or Prospectus; (v) of the receipt of any comments or request for any additional information from
the Commission; and (vi) of the happening of any event during the period described in Section 3.4
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hereof that, in the judgment of the Company, makes any statement of a material fact made in
the Registration Statement, the Preliminary Prospectus and/or the Prospectus untrue or that
requires the making of any changes in the Registration Statement, the Preliminary Prospectus and/or
the Prospectus in order to make the statements therein, (with respect to the Prospectus in light of
the circumstances under which they were made), not misleading. If the Commission or any state
securities commission shall enter a stop order or suspend such qualification at any time, the
Company will make every reasonable effort to obtain promptly the lifting of such order.
3.6 Review of Financial Statements. Until the earlier of five years from the
Effective Date, or until such earlier date upon which the Company is required to be liquidated, the
Company, at its expense, shall cause its regularly engaged independent certified public accountants
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 of quarterly financial information to stockholders.
3.7 Affiliated Transactions.
3.7.1 Business Combinations. The Company will not consummate a Business Combination
with any entity which is affiliated with any Initial Stockholder, officer, director or advisor of
the Company.
3.7.2 Administrative Services. The Company has entered into an agreement (the
“Service Agreement”) with Ho Capital Management LLC, (the “Affiliate”) in the form filed as an
exhibit to the Registration Statement pursuant to which the Affiliate will make available to the
Company general and administrative services including office space, utilities, receptionist and
secretarial support for the Company’s use for $7,500 per month.
3.7.3 Compensation. Except as set forth in this Section 3.7, the Company shall not
pay any Initial Stockholder or any of their affiliates any fees or compensation from the Company,
for services rendered to the Company prior to, or in connection with, this Offering or the
consummation of a Business Combination; provided that the Initial Stockholders shall be entitled to
reimbursement from the Company for their out-of-pocket expenses incurred on the Company’s behalf,
which includes an aggregate of $___ in loans which were made to the Company prior to the effective
date of the Registration Statement and expenses incurred by them in connection with seeking and
consummating a Business Combination as described in the Registration Statement.
3.8 Secondary Market Trading. In the event that the Company’s securities are not
listed on the American Stock Exchange, Nasdaq Stock Market or the New York Stock Exchange, then the
Company will immediately apply to be included in Standard & Poor’s Service Manuals for a period of
five years from the consummation of a Business Combination. The Company shall also take such other
action as may be reasonably requested by the Representative to obtain a secondary market trading
exemption in such other states as may be requested by the Representative.
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3.9 Warrant Solicitation Fees. The Company hereby engages Maxim, on a non-exclusive
basis, as its agent for the solicitation of the exercise of the Warrants. The Company will (i)
assist Maxim with respect to such solicitation, if requested by Maxim, and (ii) at Maxim’s request,
provide Maxim, and direct the Company’s transfer and warrant agent to provide to Maxim, at the
Company’s cost, lists of the record and, to the extent known, beneficial owners of, the Warrants.
Commencing one year from the Effective Date, the Company will pay Maxim five percent (5%) of the
exercise price of the Warrants, payable on the date of such exercise, on the terms provided for in
the Warrant Agreement, only if permitted under the rules and regulations of the NASD and only to
the extent that an investor who exercises his Warrants specifically designates, in writing, that
Maxim solicited his exercise. Maxim may engage sub-agents in its solicitation efforts. The
Company agrees to disclose the arrangement to pay such solicitation fees to Maxim in any prospectus
used by the Company in connection with the registration of the Ordinary Shares underlying the
Warrants.
3.10 Financial Public Relations Firm. Promptly after the execution of a definitive
agreement for a Business Combination, the Company shall retain a financial public relations firm
reasonably acceptable to the Representative for a term to be agreed upon by the Company and the
Representative.
3.11 Reports to the Representative.
3.11.1 Periodic Reports, Etc. For a period of five years from the Effective Date or
until such earlier time upon which the Company is required to be liquidated, the Company will
furnish to the Representative (Attn: Xxxxxxxx Xxxxxx, Head of Investment Banking) and its counsel
copies of such financial statements and other periodic and special reports as the Company from time
to time furnishes generally to holders of any class of its securities, and promptly furnish to the
Representative: (i) a copy of each periodic report the Company shall be required to file with the
Commission; (ii) a copy of every press release and every news item and article with respect to the
Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K or
Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five copies of each
Registration Statement; and (v) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company as the Representative may from
time to time reasonably request; provided that the Representative shall sign, if requested by the
Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the
Representative and its counsel in connection with the Representative’s receipt of such information.
Documents filed with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“XXXXX”) shall be deemed to have been delivered to the Representative pursuant to
this section.
3.11.2 Transfer Sheets. For a period of five years following the Effective Date or
until such earlier time upon which the Company is required to be liquidated, the Company shall
retain a transfer and warrant agent acceptable to the Representative (the “Transfer Agent”) and
during the two (2) year period following the Closing Date, will furnish to the Underwriters at the
Company’s sole cost and expense such transfer sheets of the Company’s securities as the
Representative may request, including the daily and monthly consolidated transfer sheets of the
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Transfer Agent and DTC. Continental Stock Transfer & Trust Company is an acceptable Transfer
Agent to the Underwriters.
3.11.3 Trading Reports. In the event that the Public Securities are subsequently
quoted on the NASD 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, such reports
published by the NASD or the Pink Sheets, LLC relating to price trading of the Public Securities,
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.
3.12 Disqualification of Form S-1. For a period equal to seven years from the date
hereof, the Company will not take any action or actions which may prevent or disqualify the
Company’s use of Form S-1 (or other appropriate form) for the registration of the Warrants and the
Representative’s Warrants under the Act.
3.13 Payment of Expenses.
3.13.1 General Expenses Related to the Offering. The Company hereby agrees to pay on
each of the Closing Date and the Option Closing Date, if any, to the extent not paid at Closing
Date, all expenses incident to the performance of the obligations of the Company under this
Agreement, including, but not limited to: (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the Registration Statement, the
Preliminary Prospectus and/or the final Prospectus and the printing and mailing of this Agreement
and related documents, including the cost of all copies thereof and any amendments thereof or
supplements thereto supplied to the Underwriters in quantities as may be required by the
Underwriters; (ii) the printing, engraving, issuance and delivery of the Units, the Ordinary Shares
and the Warrants included in the Units and the Representative’s Purchase Option, including any
transfer or other taxes payable thereon; (iii) a one-time fee of $5,000 payable to the
Representative’s counsel for the preparation of a “Blue Sky” survey; (iv) filing fees incurred in
registering the Offering with the NASD (including all COBRADesk fees); (v) costs of placing
“tombstone” advertisements in The Wall Street Journal, The New York Times and a
third publication to be selected by the Representative not to exceed $20,000 in the aggregate; (vi)
fees and disbursements of the transfer and warrant agent; (vii) the Company’s expenses associated
with “due diligence” meetings arranged by the Representative (none of which will be received or
paid on behalf of an underwriter and related person); (viii) the preparation, binding and delivery
of leather bound volumes in form and style reasonably satisfactory to the Representative and
transaction lucite cubes or similar commemorative items in a style and quantity as reasonably
requested by the Representative; (ix) all costs and expenses associated with “road show” marketing
and “due diligence” trips for the Company’s management to meet with prospective investors,
including without limitation, all travel, food and lodging expenses associated with such trips; (x)
all costs associated with an independent third-party background investigation of each of the
Company’s officers, directors and Initial Stockholders (in an amount not to exceed $___,000); and
(xi) all other reasonable costs and expenses incident to the performance of its
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obligations hereunder which are not otherwise specifically provided for in this Section
3.13.1. The Representative may deduct from the net proceeds of the Offering payable to the Company
on the Closing Date, or the Option Closing Date, if any, the expenses set forth above to be paid by
the Company to the Representative and others, as agreed to by the Company in writing. If the
Offering is not consummated for any reason whatsoever, except as a result of the Representative’s
or any Underwriter’s breach or default with respect to any of its obligations described in this
Agreement, then the Company shall reimburse the Representative in full for their out of pocket
accountable expenses actually incurred by the Representative, including, without limitation, its
legal fees (less any amounts previously paid). Additionally, upon any such termination, the
Representative shall return to the Company any portion of the Advance (as defined below) in excess
of its out of pocket accountable expenses actually incurred by the Representative, including,
without limitation, its legal fees.
3.13.2 Fee on Business Combination. Upon consummation of a Business Combination, the Company
and the Underwriters agree that in addition to the expenses payable pursuant to Section 3.13.1, the
Company will pay to the Representative the Contingent Discount as set forth in Section 1.5 above.
3.13.3 Fee on Termination of Offering. Notwithstanding anything contained herein to
the contrary, upon termination of the Offering, except as a result of the Representatives’ or any
underwriter’s breach or default with respect to any of its material obligations pursuant to this
Agreement, the Company shall: (A) reimburse Maxim for, or otherwise pay and bear, the expenses and
fees to be paid and borne by the Company as provided for in Paragraph 3.13.1 above, as applicable,
and (B) reimburse Maxim for the full amount of its accountable out-of pocket expenses actually
incurred to such date (which shall include, but shall not be limited to, all fees and disbursements
of Maxim’s counsel, travel, lodging and other “road show” expenses, mailing, printing and
reproduction expenses, and any expenses incurred by Maxim in conducting its due diligence), less
the amounts previously paid and any amounts previously paid to Maxim in reimbursement for such
expenses. If applicable, and solely in the event of a termination of this Offering, Maxim shall
refund to the Company any portion of the Advance previously received by Maxim which is in excess of
the accountable out-of-pocket expenses actually incurred to such date by Maxim.
3.14 Application of Net Proceeds. The Company will apply the net proceeds from the
Offering received by it in a manner consistent with the application described under the caption
“Use of Proceeds” in the Prospectus.
3.15 Delivery of Earnings Statements to Security Holders. The Company will make
generally available to its security holders as soon as practicable, but not later than the first
day of the fifteenth full calendar month following the Effective Date, an earnings statement (which
need not be certified by independent public or independent certified public accountants unless
required by the Act or the Regulations, but which shall satisfy the provisions of Rule 158(a) under
Section 11(a) of the Act) covering a period of at least twelve consecutive months beginning after
the Effective Date.
3.16 Notice to NASD.
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3.16.1 Business Combination. In the event any person or entity (regardless of any
NASD 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, the Company will provide the
following to the NASD and Representative prior to the consummation of the Business Combination:
(i) complete details of all services and copies of agreements governing such services; and (ii)
justification as to why the person or entity providing the merger and acquisition services should
not be considered an “underwriter and related person” with respect to the Company’s initial public
offering, as such term is defined in Rule 2710 of the NASD’s Conduct Rules. The Company also
agrees that proper disclosure of such arrangement or potential arrangement will be made in the
proxy statement which the Company will file for purposes of soliciting stockholder approval for the
Business Combination.
3.16.2 Broker/Dealer. In the event the Company intends to register as a
broker/dealer, merge with or acquire a registered broker/dealer, or otherwise become a member of
NASD, it shall promptly notify the NASD.
3.17 Stabilization. Neither the Company, nor, to its knowledge, any of its employees,
directors or stockholders (without the consent of Maxim) has taken or will take, directly or
indirectly, any action designed to or that has constituted 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 Units.
3.18 Internal Controls. The Company will maintain 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 generally
accepted accounting principles 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.
3.19 Accountants. For a period of five years from the Effective Date or until such
earlier time upon which the Company is required to be liquidated, the Company shall retain RKC or
other independent public accountants reasonably acceptable to Maxim.
3.20 Form 8-K. The Company shall, on the date hereof, retain its independent public
accountants 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 and the Private Placement, as well as the proceeds from the exercise of the Over-Allotment
if such exercise has occurred on the date of the Prospectus. Within three (3) trading days of the
Effective Date, the Company will file a Current Report on Form 8-K with the Commission, which
Report shall contain the Company’s Audited Financial Statements.
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3.21 NASD. The Company shall advise the NASD if it is aware that any 5% or greater
stockholder of the Company becomes an affiliate or associated person of an NASD member
participating in the distribution of the Company’s Public Securities.
3.22 Corporate Proceedings. All corporate proceedings and other legal matters
necessary to carry out the provisions of this Agreement and the transactions contemplated hereby
shall have been done to the reasonable satisfaction to counsel for the Underwriters.
3.23 Investment Company. The Company shall cause the proceeds of the Offering to be
held in the Trust Fund to be invested only in “government securities” with specific maturity dates
or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act as set forth in the Trust Agreement and disclosed in 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
be engaged in a business other than that of investing, reinvesting, owning, holding or trading
securities.
3.24 Business Combination Announcement. Within five (5) Business Days following the
consummation by the Company of a Business Combination, the Company shall cause an announcement
(“Business Combination Announcement”) to be placed, at its cost, in The Wall Street Journal, The
New York Times and a third publication to be selected by Maxim announcing the consummation of the
Business Combination and indicating that Maxim was the managing underwriter in the Offering
(subject to an aggregate maximum amount of $10,000). The Company shall supply Maxim with a draft
of the Business Combination Announcement and provide Maxim with a reasonable advance opportunity to
comment thereon. The Company will not place the Business Combination Announcement without the
final approval of Maxim, which approval will not be unreasonably withheld.
3.25 Press Releases. The Company agrees it will not issue press releases or engage in
any other publicity, without Maxim’s prior written consent (not to be unreasonably withheld), for a
period of forty (40) days after the Closing Date.
3.26 Key-Man Insurance. Prior to the consummation of the Business Combination, the
Company will obtain key person life insurance with an insurer rated at least AA or better in the
most recent addition of “Best’s Life Reports” in the aggregate amount of $2,000,000 on the life of
Xx. Xxxxxx Xx. Such insurance shall be maintained in full force and effect for a period of three
years from the consummation of the Business Combination. The Company shall be the sole beneficiary
of such policy.
3.27 Electronic Prospectus. The Company shall cause to be prepared and delivered to
the Representative, at its expense, within one (1) Business Day from the effective date of this
Agreement, an Electronic Prospectus to be used by the Underwriters in connection with the Offering.
As used herein, the term “Electronic Prospectus” means a form of prospectus, and any amendment or
supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an
electronic format, satisfactory to the Representative, that may be transmitted electronically by
the other Underwriters to offerees and purchasers of the Units for at least the
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period during which a Prospectus relating to the Units is required to be delivered under the
Securities Act; (ii) it shall disclose the same information as the paper prospectus and prospectus
filed pursuant to XXXXX, except to the extent that graphic and image material cannot be
disseminated electronically, in which case such graphic and image material shall be replaced in the
electronic prospectus with a fair and accurate narrative description or tabular representation of
such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Representative, that will allow recipients thereof to store
and have continuously ready access to the prospectus at any future time, without charge to such
recipients (other than any fee charged for subscription to the Internet as a whole and for on-line
time). The Company hereby confirms that it has included or will include in the Prospectus filed
pursuant to XXXXX or otherwise with the Commission and in the Registration Statement at the time it
was declared effective an undertaking that, upon receipt of a request by an investor or his or her
representative within the period when a prospectus relating to the Units is required to be
delivered under the Securities Act, the Company shall transmit or cause to be transmitted promptly,
without charge, a paper copy of the Prospectus.
3.28 Reservation of Shares. The Company will reserve and keep available that maximum
number of its authorized but unissued securities which are issuable upon exercise of the Warrants
and the Representative’s Purchase Option, Representative’s Warrants and the Placement Warrants
outstanding from time to time.
3.29 Board Advisor. The Company agrees that it will, upon completion of the
proposed public offering contemplated herein, for a period of no less than two (2) years, engage
a designee of the Representative as an advisor (“Advisor”) to its Board of Directors where such
Advisor shall attend meetings of the Board, receive all notices and other correspondence and
communications sent by the Company to members of its Board of Directors provided, that such
Advisor shall not be entitled to any compensation, other than reimbursement for all costs
incurred in attending such meetings including, food, lodging, and transportation. The Company
further agrees that, during said two (2) year period, it shall schedule no less than four (4)
formal and “in person” meetings of its Board of Directors in each such year at which meetings
such Advisor shall be permitted to attend as set forth herein; said meetings shall be held
quarterly each year and ten (10) days advance notice of such meetings shall be given to the
Advisor. Further, during such two (2) year period, the Company shall give notice to the
Representative with respect to any proposed acquisitions, mergers, reorganizations or other
similar transactions. The Company shall indemnify and hold such Advisor harmless against any and
all claims, actions, damages, costs and expenses, and judgments arising solely out of the
attendance and participation of such Advisor at any such meeting described herein, and, if the
Company maintains a liability insurance policy affording coverage for the acts of its officers
and directors, it shall, if possible, include such Advisor as an insured under such policy.
3.30 Right of First Refusal. For a period of thirty-six (36) months from the date
hereof, the Company grants the Representative the right of first refusal to act as lead
underwriter or placement agent or minimally as a co-manager or co-placement agent with at least
50% of the economics; or, in the case of a three-handed deal 33% of the economics, for any and
all future public and private equity and debt offerings, excluding ordinary course of business
financings such as bank lines of credit, accounts receivable factoring and financing generated by
the Company or any successor to or any subsidiary of the Company.
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3.31 Private Placement Proceeds. Immediately upon establishment of the Trust Fund and
prior to the Closing, the Company shall deposit $5,725,000 of the proceeds from the Private
Placement in the Trust Fund and shall provide Maxim with evidence of the same.
3.32 No Amendment to Charter without Supermajority Approval.
(i) The Company covenants and agrees it will not amend or modify paragraphs 168 to 173 of its
Amended and Restated Memorandum and Articles of Association without the prior approval of holders
of 95% or more of the Company’s outstanding Ordinary Shares.
(ii) The Company acknowledges that the purchasers of the Firm Units and Option Units in this
Offering shall be deemed to be third party beneficiaries of Section 3.32 of this Agreement.
(iii) The Underwriters specifically acknowledge that they may not waive this Section 3.32
under any circumstances.
3.33 Financial Printer. The Company shall retain a financial printer, reasonably
acceptable to the Representative, for the purpose of facilitating the Company’s XXXXX filings and
the printing of the Preliminary Prospectus and Prospectus.
4. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters to
purchase and pay for the Units, as provided herein, shall be subject to the continuing accuracy of
the representations and warranties of the Company as of the date hereof and as of each of the
Closing Date and the Option Closing Date, if any, to the accuracy of the statements of officers of
the Company made pursuant to the provisions hereof and to the performance by the Company of its
obligations hereunder and to the following conditions:
4.1 Regulatory Matters.
4.1.1 Effectiveness of Registration Statement. The Registration Statement shall have
become effective not later than 5:00 P.M., New York time, on the date of this Agreement or such
later date and time as shall be consented to in writing by Representative, and, at each of the
Closing Date and the Option Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for the purpose shall have been
instituted or shall be pending or contemplated by the Commission and any request on the part of the
Commission for additional information shall have been complied with to the reasonable satisfaction
of R&P.
4.1.2 NASD Clearance. By the Effective Date, the Representative shall have received
clearance from the NASD as to the amount of compensation allowable or payable to the Underwriters
as described in the Registration Statement.
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4.1.3 American Stock Exchange Listing. Prior to the Effective Date, the Company shall
have received written notice of approval from the American Stock Exchange (“AMEX”) as to the
listing of its Securities in connection with the Offering on the AMEX.
4.1.4 No Commission Stop Order. At each of the Closing Date and the Option Closing
Date, the Commission has not issued any order or threatened to issue any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such an order.
4.1.5 No Blue Sky Stop Orders. No order suspending the sale of the Units in any
jurisdiction designated by Representative pursuant to Section 3.3 hereof shall have been issued on
either the Closing Date or the Option Closing Date, and no proceedings for that purpose shall have
been instituted or shall be contemplated.
4.2 Company Counsel Matters.
4.2.1 Closing Date Opinion of Counsel. On the Closing Date, the Representative shall
have received the favorable opinion of Xxxxxxx Xxxx LLP (“HR”), counsel to the Company, dated the
Closing Date, addressed to the Representative and in form and substance satisfactory to the
Representative to the effect that:
(i) The Company has been duly organized and is validly existing as a corporation and is in
good standing under the laws of its state of incorporation, with full power and authority to own
its properties and conduct its business as described in the Registration Statement, the Preliminary
Prospectus and the Prospectus.
(ii) All issued and outstanding securities of the Company (including, without limitation, the
Placement Securities) have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive rights of any
stockholder of the Company arising by operation of law or under the Amended and Restated
Certificate of Incorporation or Bylaws of the Company. Except with respect to the Placement
Securities which are not covered by this opinion, the offers and sales of the outstanding Ordinary
Shares were at all relevant times either registered under the Act and, to our knowledge, the
applicable state securities or Blue Sky Laws or exempt from such registration requirements. The
authorized capital stock of the Company is as set forth in the Preliminary Prospectus and the
Prospectus. The Units, the Ordinary Shares and the Warrants conform to the descriptions thereof
contained in the Registration Statement, the Preliminary Prospectus and the Prospectus.
(iii) The Securities have been duly authorized and, when issued and paid for, will be validly
issued, fully paid and non-assessable; the holders thereof are not and will not be subject to
personal liability by reason of being such holders. The Securities are not and will not be subject
to the preemptive rights of any holders of any security of the Company arising by operation of law
or under the Amended and Restated Certificate of Incorporation or Bylaws
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of the Company or, to such counsel’s knowledge, similar rights that entitle or will entitle
any person to acquire any security from the Company upon issuance or sale thereof. When issued,
the Representative’s Purchase Option, the Representative’s Warrants and the Warrants will
constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof
and payment therefor, the number and type of securities of the Company called for thereby and such
Warrants, the Representative’s Purchase Option and the Representative’s Warrants, when issued, in
each case, will be enforceable against the Company in accordance with their respective terms,
except: (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (b) as enforceability of any indemnification or
contribution provision may be limited under the United States and state securities laws; and (c)
that the remedy of specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. The certificates representing the Securities are in due and proper form.
A sufficient number of Ordinary Shares have been reserved for issuance upon exercise of the
Representative’s Purchase Option, the Warrants and the Representative’s Warrants. The Ordinary
Shares underlying the Representative’s Purchase Option, the Warrants and Representative’s Warrants
will, upon exercise of the Representative’s Purchase Option, the Warrants and the Representative’s
Warrants and payment of the exercise price thereof, be duly and validly issued, fully paid and
non-assessable and will not have been issued in violation of or subject to, to such counsel’s
knowledge, preemptive or similar rights that entitle or will entitle any person to acquire, to such
counsel’s knowledge, any securities from the Company upon issuance thereof.
(iv) The Placement Warrants constitute valid and binding obligations of the Company to issue
and sell, upon exercise thereof and payment therefor, the number and type of securities of the
Company called for thereby, and such Placement Warrants are enforceable against the Company in
accordance with their respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii)
as enforceability of any indemnification or contribution provision may be limited under federal and
state securities laws; and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought. A sufficient number of Ordinary Shares
have been reserved for issuance upon exercise of the Placement Warrants. The Ordinary Shares
underlying the Placement Warrants will, upon exercise thereof and payment of the exercise price
therefor, be duly and validly issued, fully paid and non-assessable and will not have been issued
in violation of or subject to, to such counsel’s knowledge, preemptive or similar rights that
entitle or will entitle any person to acquire any securities from the Company upon issuance
thereof.
(v) The Company has full corporate right, power and authority to execute and deliver this
Agreement, the Warrant Agreement, the Service Agreement, the Trust Agreement, the Subscription
Agreement, the Escrow Agreement and the Representative’s Purchase Option and to perform its
obligations thereunder, and all corporate action required to be taken for the due and proper
authorization, execution and delivery of this Agreement, the Warrant Agreement, the Service
Agreement, the Trust Agreement, the Subscription Agreement,
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the Escrow Agreement and the Representative’s Purchase Option has been duly and validly taken.
(vi) This Agreement, the Warrant Agreement, the Service Agreement, the Trust Agreement, the
Subscription Agreement, the Escrow Agreement and the Representative’s Purchase Option have each
been duly and validly authorized and, when executed and delivered by the Company, will constitute
the valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, except: (a) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally; (b) as
enforceability of any indemnification or contribution provisions may be limited under the United
States and state securities laws; and (c) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(vii) The execution, delivery and performance of this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Escrow Agreement, the Trust Agreement, the Subscription
Agreement and the Service Agreement, the issuance and sale of the Securities, the consummation of
the transactions contemplated hereby and thereby, and compliance by the Company with the terms and
provisions hereof and thereof, do not and will not, with or without the giving of notice or the
lapse of time, or both, (a) to such counsel’s knowledge, conflict with, or result in a breach of,
any of the terms or provisions of, or constitute a default under, or result in the creation or
modification of any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company pursuant to the terms of, any mortgage, deed of trust, note, indenture, loan,
contract, commitment or other agreement or instrument filed as an exhibit to the Registration
Statement, (b) result in any violation of the provisions of the Amended and Restated Certificate of
Incorporation or the By-Laws of the Company, or (c) to such counsel’s knowledge, violate any
statute or any judgment, order or decree, rule or regulation applicable to the Company of any
court, domestic or foreign, or of any federal, state or other regulatory authority or other
governmental body having jurisdiction over the Company, its properties or assets.
(viii) The Registration Statement, each Preliminary Prospectus and the Prospectus and any
post-effective amendments or supplements thereto (other than the financial statements included
therein, as to which no opinion need be rendered) each as of their respective dates complied as to
form in all material respects with the requirements of the Act and Regulations. The Securities and
each agreement filed as an exhibit to the Registration Statement conform in all material respects
to the description thereof contained in the Registration Statement, the Preliminary Prospectus and
the Prospectus.
(ix) The Registration Statement is effective under the Act. To such counsel’s knowledge, no
stop order suspending the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or threatened under the Act or
applicable state securities laws.
- 29 -
(x) To such counsel’s knowledge, there is no action, suit or other proceeding before or by any
court of governmental agency or body, domestic or foreign, now pending, or threatened against the
Company that is required to be described in the Registration Statement that is not so described.
(xi) No consent, approval, authorization, order, registration, filing, qualification, license
or permit of or with any court or any judicial, regulatory or other legal or governmental agency or
body is required for the execution, delivery and performance by the Company of the Underwriting
Agreement or consummation by the Company of the transactions contemplated by the Underwriting
Agreement, the Registration Statement, Preliminary Prospectus and the Prospectus, except for (1)
such as may be required under state securities or blue sky laws in connection with the purchase and
distribution of the Units by the Underwriters (as to which such counsel need express no opinion),
(2) such as have been made or obtained under the Securities Act and (3) such as are required by the
NASD.
(xii) The statements under the captions “Description of Securities” and “Taxation” of the
Registration Statement, insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings.
The opinion of counsel shall further include a statement to the effect that counsel has
participated in conferences with officers, directors and other representatives of the Company,
representatives of the independent public accountants for the Company and representatives of the
Underwriters at which the contents of the Registration Statement, Preliminary Prospectus, the
Prospectus and related matters were discussed and although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, Preliminary Prospectus and the Prospectus (except as
otherwise set forth in this opinion), no facts have come to the attention of such counsel which
lead them to believe that either the Registration Statement, Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, as of the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial and statistical data included
in the Registration Statement, Preliminary Prospectus or the Prospectus). The opinion of counsel
shall state that such counsel is not opining as to the Placement Securities with respect to any
rights to rescind or the effect any exercise of such rights will have on any other securities of
the Company or on the Offering.
4.2.2 Option Closing Date Opinion of Counsel. On each Option Closing Date, if any,
the Representative shall have received the favorable opinion of HR, dated each Option Closing Date,
addressed to the Representative and in form and substance reasonably satisfactory to counsel to the
Representative, confirming as of each Option Closing Date, the statements made by HR in its opinion
delivered on the Closing Date.
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4.2.3 Reliance. In rendering such opinion, such counsel may rely: (i) as to matters
involving the application of laws other than the laws of the United States and jurisdictions in
which they are admitted, to the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory
to the Representative) of other counsel reasonably acceptable to the Representative, familiar with
the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on
certificates or other written statements of officers of the Company and officers of departments of
various jurisdiction having custody of documents respecting the corporate existence or good
standing of the Company, provided that copies of any such statements or certificates shall be
delivered to the Underwriters’ counsel if requested. The opinion of counsel for the Company and
any opinion relied upon by such counsel for the Company shall include a statement to the effect
that it may be relied upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
4.3 Cold Comfort Letter. At the time this Agreement is executed, and at each of the
Closing Date and the Option Closing Date, if any, the Representative shall have received a letter,
addressed to the Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in clause (iii) below) to
the Representative and to R&P from RKC dated, respectively, as of the date of this Agreement and as
of the Closing Date and the Option Closing Date, if any:
(i) Confirming that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during the periods
covered by the financial statements included in the Registration Statement, the Preliminary
Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act;
(ii) Stating that in their opinion the financial statements of the Company included in the
Registration Statement, the Preliminary Prospectus and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act and the published
Regulations thereunder;
(iii) Stating that, on the basis of a limited review which included a reading of the latest
available minutes of the stockholders and board of directors and the various committees of the
board of directors, consultations with officers and other employees of the Company responsible for
financial and accounting matters and other specified procedures and inquiries, nothing has come to
their attention which would lead them to believe that: (a) the unaudited financial statements of
the Company included in the Registration Statement, the Preliminary Prospectus and the Prospectus
do not comply as to form in all material respects with the applicable accounting requirements of
the Act and the Regulations or are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of the audited
financial statements of the Company included in the Registration Statement, Preliminary Prospectus
and the Prospectus; (b) at a date not later than five days prior to the Effective Date, Closing
Date or Option Closing Date, as the case may be, there was any change in the capital stock or
long-term debt of the Company, or any decrease in the stockholders’ equity of the Company as
compared with amounts shown in the [ ], 2007
- 31 -
balance sheet included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, other than as set forth in or contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus, or, if there was any decrease, setting forth the amount
of such decrease, and (c) during the period from [ ], 2007 (balance sheet date) to a
specified date not later than five days prior to the Effective Date, Closing Date or Option Closing
Date, as the case may be, there was any decrease in revenues, net earnings or net earnings per
Ordinary Share, in each case as compared with the corresponding period in the preceding year and as
compared with the corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement, the Preliminary Prospectus and the Prospectus, or, if
there was any such decrease, setting forth the amount of such decrease;
(iv) Stating they have compared specific dollar amounts, numbers of shares, percentages of
revenues and earnings, statements and other financial information pertaining to the Company set
forth in the Registration Statement, the Preliminary Prospectus and the Prospectus in each case to
the extent that such amounts, numbers, percentages, statements and information may be derived from
the general accounting records, including work sheets, of the Company and excluding any questions
requiring an interpretation by legal counsel, with the results obtained from the application of
specified readings, inquiries and other appropriate procedures (which procedures do not constitute
an examination in accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(v) Stating they have not, since inception, provided the Company’s management with any written
communication in accordance with Statement on Auditing Standards No. 60 “Communication of Internal
Control Structure Related Matters Noted in an Audit,”; and
(vi) Statements as to such other matters incident to the transaction contemplated hereby as
Representative may reasonably request.
4.4 Officers’ Certificates.
4.4.1 Officers’ Certificate. At each of the Closing Date and the Option Closing Date,
if any, the Representative shall have received a certificate of the Company signed by the Chairman
of the Board or the President and the Secretary or Assistant Secretary of the Company, dated the
Closing Date or the Option Closing Date, as the case may be, respectively, to the effect that the
Company has performed all covenants and complied with all conditions required by this Agreement to
be performed or complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in Section 4.5 hereof have been
satisfied as of such date and that, as of the Closing Date and the Option Closing Date, as the case
may be, the representations and warranties of the Company set forth in Section 2 hereof are true
and correct. In addition, the Representative will have received such other and further
certificates of officers of the Company as the Representative may reasonably request.
4.4.2 Secretary’s Certificate. At each of the Closing Date and the Option Closing
Date, if any, the Representative shall have received a certificate of the Company signed
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by the Secretary or Assistant Secretary of the Company, dated the Closing Date or the Option
Date, as the case may be, respectively, certifying: (i) that the Amended and Restated Memorandum
and Articles of Association of the Company are true and complete, have not been modified and are in
full force and effect; (ii) that the resolutions relating to the public offering contemplated by
this Agreement are in full force and effect and have not been modified; (iii) all correspondence
between the Company or its counsel and the Commission; and (iv) as to the incumbency of the
officers of the Company. The documents referred to in such certificate shall be attached to such
certificate.
4.5 No Material Changes. Prior to and on each of the Closing Date and the Option
Closing Date, if any: (i) there shall have been no material adverse change or development involving
a prospective material adverse change in the condition or prospects or the business activities,
financial or otherwise, of the Company from the latest dates as of which such condition is set
forth in the Registration Statement and Prospectus; (ii) no action suit or proceeding, at law or in
equity, shall have been pending or threatened against the Company or any Initial Stockholder before
or by any court or federal or state commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may materially adversely affect the business, operations,
prospects or financial condition or income of the Company, except as set forth in the Registration
Statement, the Preliminary Prospectus and Prospectus; (iii) no stop order shall have been issued
under the Act and no proceedings therefor shall have been initiated or threatened by the
Commission; and (iv) the Registration Statement, the Preliminary Prospectus and the Prospectus and
any amendments or supplements thereto shall contain all material statements which are required to
be stated therein in accordance with the Act and the Regulations and shall conform in all material
respects to the requirements of the Act and the Regulations, and neither the Registration
Statement, the Preliminary Prospectus nor the Prospectus nor any amendment or supplement thereto
shall contain any untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made), not misleading.
4.6 Delivery of Agreements.
4.6.1 Effective Date Deliveries. On the Effective Date, the Company shall have
delivered to the Representative executed copies of the Escrow Agreement, the Trust Agreement, the
Warrant Agreement, the Service Agreement, all of the Insider Letters and the Subscription
Agreement.
4.6.2 Closing Date Deliveries. On the Closing Date, the Company shall have delivered
to the Representative and its designees executed copies of the Representative’s Purchase Option.
4.7 Blue Sky Survey. On the Closing Date, the Representative shall have received the
Blue Sky Survey from R&P.
5. Indemnification.
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5.1 Indemnification of Underwriters.
5.1.1 General. Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each of the Underwriters and each dealer selected by Representative
that participates in the offer and sale of the Units (each a “Selected Dealer”) and each of their
respective directors, officers and employees and each person, if any, who controls any such
Underwriter (“controlling person”) within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or threatened, or any claim
whatsoever, whether arising out of any action between any of the Underwriters and the Company or
between any of the Underwriters and any third party or otherwise) to which they or any of them may
become subject under the Act, the Exchange Act or any other federal, state or local statute, law,
rule, regulation or ordinance or at common law or otherwise or under the laws, rules and regulation
of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement
of a material fact contained in (i) any Preliminary Prospectus, the Registration Statement, or the
Prospectus (as from time to time each may be amended and supplemented); (ii) in any post-effective
amendment or amendments or any new registration statement and prospectus in which is included
securities of the Company issued or issuable upon exercise of the Representative’s Purchase Option;
or (iii) any application or other document or written communication (in this Section 5 collectively
called “application”) executed by the Company or based upon written information furnished by the
Company in any jurisdiction in order to qualify the Units under the securities laws thereof or
filed with the Commission, any state securities commission or agency, the AMEX, the OTC Bulletin
Board or Nasdaq or any securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, unless such statement or
omission was made in reliance upon and in conformity with written information furnished to the
Company with respect to an Underwriter by or on behalf of such Underwriter expressly for use in any
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereof. With respect to any untrue statement or omission or alleged untrue statement
or omission made in the Preliminary Prospectus, the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter to the extent that any loss, liability, claim,
damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability, claim or damage at or prior to the
written confirmation of sale of the Securities to such person as required by the Act and the
Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the Company with its
obligations under Section 3.4 hereof. The Company agrees promptly to notify the Representative of
the commencement of any litigation or proceedings against the Company or any of its officers,
directors or controlling persons in connection with the issue and sale of the Securities or in
connection with the Preliminary Prospectus, the Registration Statement, or the Prospectus.
5.1.2 Procedure. If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company pursuant to Section
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5.1.1, such Underwriter shall promptly notify the Company in writing of the institution of
such action and the Company shall assume the defense of such action, including the employment and
fees of counsel (subject to the reasonable approval of such Underwriter) and payment of actual
expenses. Such Underwriter or controlling person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless: (i) the employment of such counsel at the expense of
the Company shall have been authorized in writing by the Company in connection with the defense of
such action; (ii) the Company shall not have employed counsel to have charge of the defense of such
action; or (iii) such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to those available to
the Company (in which case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events the reasonable fees
and expenses of not more than one additional firm of attorneys selected by the Underwriter and/or
controlling person shall be borne by the Company. Notwithstanding anything to the contrary
contained herein, if the Underwriter or controlling person shall assume the defense of such action
as provided above, the Company shall have the right to approve the terms of any settlement of such
action which approval shall not be unreasonably withheld.
5.2 Indemnification of the Company. Each Underwriter, severally and not jointly,
agrees to indemnify and hold harmless the Company, its directors, officers and employees and agents
who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in the foregoing
indemnity from the Company to the several Underwriters, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement thereto,
or in any application, in reliance upon, and in strict conformity with, written information
furnished to the Company with respect to such Underwriter by or on behalf of the Underwriter
expressly for use in such Preliminary Prospectus, the Registration Statement, or the Prospectus, or
any amendment or supplement thereto or in any such application, which furnished written
information, it is expressly agreed, consists solely of the information described in the last
sentence of Section 2.3.1. In case any action shall be brought against the Company or any other
person so indemnified based on any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties
given to the Company, and the Company and each other person so indemnified shall have the rights
and duties given to the several Underwriters by the provisions of Section 5.1.2.
5.3 Contribution.
5.3.1 Contribution Rights. In order to provide for just and equitable contribution
under the Act in any case in which (i) any person entitled to indemnification under this Section 5
makes claim for indemnification pursuant hereto but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification in
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such case, or (ii) contribution under the Act, the Exchange Act or otherwise may be required
on the part of any such person in circumstances for which indemnification is provided under this
Section 5, then, and in each such case, the Company and the Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to the initial offering
price appearing thereon and the Company is responsible for the balance; provided, that, no person
guilty of a 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.
Notwithstanding the provisions of this Section 5.3.1, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Public
Securities underwritten by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay in respect of such
losses, liabilities, claims, damages and expenses. For purposes of this Section, each director,
officer and employee of an Underwriter or the Company, as applicable, and each person, if any, who
controls an Underwriter or the Company, as applicable, within the meaning of Section 15 of the Act
shall have the same rights to contribution as the Underwriters or the Company, as applicable.
5.3.2 Contribution Procedure. Within fifteen days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made against another party
(“contributing party”), notify the contributing party of the commencement thereof, but the omission
to so notify the contributing party will not relieve it from any liability which it may have to any
other party other than for contribution hereunder. In case any such action, suit or proceeding is
brought against any party, and such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled
to participate therein with the notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding effected by such party seeking
contribution on account of any settlement of any claim, action or proceeding effected by such party
seeking contribution without the written consent of such contributing party. The contribution
provisions contained in this Section are intended to supersede, to the extent permitted by law, any
right to contribution under the Act, the Exchange Act or otherwise available. The Underwriters’
obligations to contribute pursuant to this Section 5.3 are several and not joint.
6. Default by an Underwriter.
6.1 Default Not Exceeding 10% of Firm Units or Option Units. If any Underwriter or
Underwriters shall default in its or their obligations to purchase the Firm Units or the Option
Units, if the over-allotment option is exercised, hereunder, and if the number of the Firm Units or
Option Units with respect to which such default relates does not exceed in the aggregate 10% of the
number of Firm Units or Option Units that all Underwriters have agreed to purchase
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hereunder, then such Firm Units or Option Units to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
6.2 Default Exceeding 10% of Firm Units or Option Units. In the event that the
default addressed in Section 6.1 above relates to more than 10% of the Firm Units or Option Units,
Representative may in its discretion arrange for itself or for another party or parties to purchase
such Firm Units or Option Units to which such default relates on the terms contained herein. If,
within one Business Day after such default relating to more than 10% of the Firm Units or Option
Units, Representative does not arrange for the purchase of such Firm Units or Option Units, then
the Company shall be entitled to a further period of one Business Day within which to procure
another party or parties satisfactory to the Company and Representative to purchase said Firm Units
or Option Units on such terms. In the event Representative does not arrange for the purchase of
the Firm Units or Option Units to which a default relates as provided in this Section 6, this
Agreement may be terminated by the Company without liability on the part of the Company (except as
provided in Sections 3.13 and 5 hereof) or the several Underwriters (except as provided in Section
5 hereof); provided, however, that if such default occurs with respect to the Option Units, this
Agreement will not terminate as to the Firm Units; and provided further that nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other several Underwriters and to
the Company for damages occasioned by its default hereunder.
6.3 Postponement of Closing Date. In the event the Firm Units or Option Units to
which the default relates are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties as aforesaid, Representative or the Company shall have the
right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any
event exceeding five Business Days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement, the Preliminary Prospectus and/or the Prospectus, as the
case may be, or in any other documents and arrangements, and the Company agrees to file promptly
any amendment to, or to supplement, the Registration Statement, the Preliminary Prospectus and/or
the Prospectus, as the case may be, that in the opinion of counsel for the Underwriters may thereby
be made necessary. The term “Underwriter” as used in this Agreement shall include any party
substituted under this Section 6 with like effect as if it had originally been a party to this
Agreement with respect to such Securities.
7. Additional Covenants.
7.1 Additional Shares or Options. The Company hereby agrees that until the Company
consummates a Business Combination, it shall not issue any Ordinary Shares or any options or other
securities convertible into Ordinary Shares, or any shares of Preferred Stock which participate in
any manner in the Trust Fund or which vote as a class with the Ordinary Shares on a Business
Combination.
7.2 Trust Fund Waiver Acknowledgments. The Company hereby agrees that it will not
commence its due diligence investigation of any operating business or businesses which the Company
seeks to acquire (each, a “Target Business”) or obtain the services of any vendor unless and until
such Target Business or vendor acknowledges in writing, whether through a letter of intent,
memorandum of understanding or other similar document (and subsequently
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acknowledges the same in any definitive document replacing any of the foregoing), that (a) it
has read the Prospectus and understands that the Company has established the Trust Fund, initially
in an amount of $100,000,000 (which includes $3,000,000 of deferred underwriting discounts and
which does not give effect to any exercise of the Over-allotment Option) for the benefit of the
Public Stockholders and that, except for a portion of the interest earned on the amounts held in
the Trust Fund, the Company may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event of the redemption of their shares or the dissolution and liquidation of
the Trust Fund as part of the Company’s plan of dissolution and liquidation or (ii) to the Company
after it consummates a Business Combination and (b) for and in consideration of the Company (1)
agreeing to evaluate such Target Business for purposes of consummating a Business Combination with
it or (2) agreeing to engage the services of the vendor, as the case may be, such Target Business
or vendor agrees that it does not have any right, title, interest or claim of any kind in or to any
monies of the Trust Fund (“Claim”) and waives any Claim it may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever. The foregoing letters shall
substantially be in the form attached hereto as Exhibit A and B, respectively.
Furthermore, each officer and director of the Company shall execute a waiver letter in the form
attached hereto as Exhibit C.
7.3 Insider Letters. The Company shall not take any action or omit to take any action
which would cause a breach of any of the Insider Letters executed between each Initial Stockholder,
officer or director and Maxim or the Subscription Agreement and will not allow any amendments to,
or waivers of, such Insider Letters or the Subscription Agreement without the prior written consent
of Maxim.
7.4 Amended and Restated Memorandum and Articles of Association. 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 Memorandum and Articles of Association. Subject to Section
3.32, prior to the consummation of a Business Combination, the Company will not amend its Amended
and Restated Memorandum and Articles of Association, without the prior written consent of Maxim.
7.5 Blue Sky Requirements. The Company shall provide counsel to the Representative
with ten copies of all proxy information and all related material filed with the Commission in
connection with a Business Combination concurrently with such filing with the Commission. In
addition, the Company shall furnish any other state in which its initial public offering was
registered, such information as may be requested by such state.
7.6 Acquisition/Liquidation Procedure. (a) The Company agrees: (i) that, prior to the
consummation of any Business Combination, it will submit such transaction to the Company’s
stockholders for their approval (“Business Combination Vote”) even if the nature of the acquisition
is such as would not ordinarily require stockholder approval under applicable state law; and (ii)
that, in the event that the Company does not effect a Business Combination within 18 months from
the consummation of this Offering (subject to extension for an additional six-month period or any
extension upon the prior consent of holders of 95% or more of the Company’s outstanding Ordinary
Shares, each as described in the Prospectus)(the “Termination
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Date”), the Company shall take all action necessary to dissolve the Corporation and liquidate
the Trust Account to holders of IPO Shares as soon as reasonably practicable, in accordance with
Cayman Islands Law. Upon liquidation of the Trust Account, the Company will distribute to all
holders of IPO Shares (defined below) an aggregate sum equal to $10.00 per unit (plus a portion of
the interest earned, but net of (i) taxes payable on interest earned, and (ii) up to $2,000,000 of
interest income released to the Company to fund its working capital), plus a pro rata share of any
remaining net assets, subject to any valid claims by the Company’s creditors that are not covered
by amounts held in the Trust Fund or the indemnities provided by the Company’s Sponsor. Only
holders of IPO Shares (as defined below) shall be entitled to receive liquidating distributions and
the Company shall pay no liquidating distributions with respect to any other shares of capital
stock of the Company, including the Ordinary Shares underlying the Placement Warrants.
(b) With respect to the Business Combination Vote, each of the Initial Stockholders has
agreed to vote the Ordinary Shares owned by them immediately prior to this Offering in accordance
with the majority of the IPO Shares voted by the holders of the IPO Shares in connection with the
Business Combination Vote. At the time the Company seeks approval of any potential Business
Combination, the Company will offer each of the holders of Ordinary Shares issued in this Offering
(the “IPO Shares”) the right to redeem their IPO Shares at a per share price equal to $10.00 (the
“Redemption Price”) (plus a portion of the interest earned, but net of (i) taxes payable on
interest earned, and (ii) up to $2,000,000 of interest income released to the Company to fund its
working capital). If holders of less than 35.00% in interest of the Company’s IPO Shares vote
against such approval of a Business Combination, the Company may, but will not be required to,
proceed with such Business Combination. If the Company elects to so proceed, it will redeem
shares, based upon the Redemption Price, from those holders of IPO Shares who affirmatively
requested such redemption and who voted against the Business Combination. If holders of 35.00% or
more in interest of the IPO Shares vote against approval of any potential Business Combination, the
Company will not proceed with such Business Combination and will not redeem such shares. Only
holders of IPO Shares shall be entitled to receive liquidating distributions and the Company shall
pay no liquidating distributions with respect to any other shares of capital stock of the Company.
7.7 Rule 419. The Company agrees that it will use its best 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.
7.8 Presentation of Potential Target Businesses. The Company shall cause each of the
Initial Stockholders, officers and directors to agree that, in order to minimize potential
conflicts of interest which may arise from multiple affiliations, the Initial Stockholders,
officers and directors will present to the Company for its consideration, prior to presentation to
any other person or company, any suitable opportunity to acquire an operating business, until the
earlier of the consummation by the Company of a Business Combination, the liquidation of the
Company, or until such time as such Initial Stockholder, officer or director ceases to be
affiliated with the Company, subject to any pre-existing fiduciary obligations the Initial
Stockholders might have.
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7.9 Target Fair Market Value. The Company agrees that the initial Target Business
that it acquires must have a fair market value equal to at least 80% of the amount held in the
Company’s Trust Fund (excluding the deferred underwriting compensation payable to the underwriters)
at the time of such acquisition. The fair market value of such business must be determined by the
Board of Directors of the Company based upon standards generally accepted by the financial
community, such as actual and potential sales, earnings and cash flow and book value. If the Board
of Directors of the Company is not able to independently determine that the Target Business has a
fair market value of at least 80% of the amount in the Trust Fund (excluding the deferred
underwriting compensation payable to the underwriters) at the time of such acquisition, the Company
will obtain an opinion from an unaffiliated, independent investment banking firm which is a member
of the NASD with respect to the satisfaction of such criteria. The Company is not required to
obtain an opinion from an investment banking firm as to the fair market value if the Company’s
Board of Directors independently determines that the Target Business does have sufficient fair
market value.
8. Representations and Agreements to Survive Delivery. Except as the context otherwise
requires, all representations, warranties and agreements contained in this Agreement shall be
deemed to be representations, warranties and agreements at the Closing Date or the Option Closing
Date, if any, and such representations, warranties and agreements of the Underwriters and Company,
including the indemnity agreements contained in Section 5 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of any Underwriter, the
Company or any controlling person, and shall survive termination of this Agreement or the issuance
and delivery of the Securities to the several Underwriters until the earlier of the expiration of
any applicable statute of limitations and the seventh anniversary of the later of the Closing Date
or the Option Closing Date, if any, at which time the representations, warranties and agreements
shall terminate and be of no further force and effect.
9. Effective Date of This Agreement and Termination Thereof.
9.1 Effective Date. This Agreement shall become effective on the Effective Date at
the time the Registration Statement is declared effective by the Commission.
9.2 Termination. Maxim shall have the right to terminate this Agreement at any time
prior to any Closing Date, (i) if any domestic or international event or act or occurrence has
materially disrupted, or in Maxim’s opinion will in the immediate future materially disrupt,
general securities markets in the United States; or (ii) if trading on the New York Stock Exchange,
the American Stock Exchange, the Boston Stock Exchange or on the NASD OTC Bulletin Board (or
successor trading market) shall have been suspended, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been fixed, or maximum
ranges for prices for securities shall have been required on the NASD OTC Bulletin Board or by
order of the Commission or any other government authority having jurisdiction, or (iii) if the
United States or any Asian country (as defined in the Prospectus) shall have become involved in a
war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New
York State or federal authority, or (v) if a moratorium on foreign exchange trading has been
declared which materially adversely impacts the United States securities market, or (vi) if the
Company shall have sustained a material loss by
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fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in Maxim’s opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of the Company’s
representations, warranties or covenants hereunder are breached, or (viii) if the Representative
shall have become aware after the date hereof of such a material adverse change in the conditions
or prospects of the Company, or such adverse material change in general market conditions,
including, without limitation, as a result of terrorist activities after the date hereof, as in the
Representative’s judgment would make it impracticable to proceed with the offering, sale and/or
delivery of the Units or to enforce contracts made by the Underwriters for the sale of the Units.
9.3 Expenses. In the event this Agreement shall not be carried out for any reason
whatsoever, except as a result of the Representative’s or any underwriters’ breach or default with
respect to any of its material obligations pursuant to this Agreement, within the time specified
herein or any extensions thereof pursuant to the terms herein, the obligations of the Company to
pay the out of pocket expenses actually incurred by the Representative related to the transactions
contemplated herein shall be governed by Section 3.13 hereof.
9.4 Indemnification. Notwithstanding any contrary provision contained in this
Agreement, any election hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be in any way effected
by, such election or termination or failure to carry out the terms of this Agreement or any part
hereof.
10. Miscellaneous.
10.1 Notices. All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be mailed, delivered by hand or reputable overnight courier
or delivered by facsimile transmission (with printed confirmation of receipt) and confirmed and
shall be deemed given when so mailed, delivered or faxed (or if mailed, two days after such
mailing):
If to the Representative:
Maxim Group LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxx, Head of Investment Banking
Fax: (000) 000-0000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxx, Head of Investment Banking
Fax: (000) 000-0000
Copy to:
Xxxxxxxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
000 Xxxxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
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If to the Company:
Asia Special Situation Acquisition Corp
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Fax:
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Fax:
Copy to:
Xxxxxxx Xxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X Xxxxx, Esq.
Fax: (000) 000-0000
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X Xxxxx, Esq.
Fax: (000) 000-0000
10.2 Headings. The headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of this Agreement.
10.3 Amendment. This Agreement may only be amended by a written instrument executed
by each of the parties hereto.
10.4 Entire Agreement. This Agreement (together with the other agreements and
documents being delivered pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersede all prior agreements and understandings of the parties, oral and written, with respect to
the subject matter hereof.
10.5 Binding Effect. This Agreement shall inure solely to the benefit of and shall be
binding upon the Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective successors, legal
representatives and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any
provisions herein contained.
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10.6 Governing Law, Venue, etc.
10.6.1 This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to the conflict of laws principles thereof.
Each of the Representative and the Company (and any individual signatory hereto): (i) agrees that
any legal suit, action or proceeding arising out of or relating to this agreement and/or the
transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County
of New York, or in the United States District Court for the Southern District of New York, (ii)
waives any objection which such party may have or hereafter to the venue of any such suit, action
or proceeding and (iii) irrevocably and exclusively consents to the jurisdiction of the New York
Supreme Court, County of New York, and the United States District Court for the Southern District
of New York in any such suit, action or proceeding.
10.6.2 Each of the Representative and the Company (and any individual signatory hereto)
further agrees to accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York and agrees that service of process upon
the Company or any such individual mailed by certified mail to the Company’s address shall be
deemed in every respect effective service of process upon the Company or any such individual in any
such suit, action or proceeding, and service of process upon the Representative mailed by certified
mail to the Representative’s address shall be deemed in every respect effective service process
upon the Representative, in any such suit, action or proceeding.
10.6.3 THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF
OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.4 The Company agrees that the prevailing party(ies) in any such action shall be entitled
to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to
such action or proceeding and/or incurred in connection with the preparation therefor.
10.7 Execution in Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart
of this Agreement by fax or email/pdf transmission shall constitute valid and sufficient delivery
thereof.
10.8 Waiver, Etc. The failure of any of the parties hereto to at any time enforce any
of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such
provision, nor to in any way effect the validity of this Agreement or any provision hereof or the
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right of any of the parties hereto to thereafter enforce each and every provision of this
Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of
this Agreement shall be effective unless set forth in a written instrument executed by the party or
parties against whom or which enforcement of such waiver is sought; and no waiver of any such
breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other
or subsequent breach, non-compliance or non-fulfillment.
10.9 No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters
are acting solely as underwriters in connection with the offering of the Company’s securities. The
Company further acknowledges that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length basis and in no event
do the parties intend that the Underwriters act or be responsible as a fiduciary to the Company,
its management, stockholders, creditors or any other person in connection with any activity that
the Underwriters may undertake or have undertaken in furtherance of the offering of the Company’s
securities, either before or after the date hereof. The Underwriters hereby expressly disclaim any
fiduciary or similar obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions, and the Company
hereby confirms its understanding and agreement to that effect. The Company and the Underwriters
agree that they are each responsible for making their own independent judgments with respect to any
such transactions, and that any opinions or views expressed by the Underwriters to the Company
regarding such transactions, including but not limited to any opinions or views with respect to the
price or market for the Company’s securities, do not constitute advice or recommendations to the
Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims
that the Company may have against the Underwriters with respect to any breach or alleged breach of
any fiduciary or similar duty to the Company in connection with the transactions contemplated by
this Agreement or any matters leading up to such transactions.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If the foregoing correctly sets forth the understanding between the Underwriters and the
Company, please so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between us.
| Very truly yours, | ||||
| ASIA SPECIAL SITUATION ACQUISITION CORP. | ||||
| By: | ||||
| Name: | Xxxxxx Xx | |||
| Title: | Chairman | |||
| Agreed to and accepted on the date first above written. | ||||
| MAXIM GROUP LLC, as Representative of the several underwriters | ||||
By: |
||||
| Title: Head of Investment Banking | ||||
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SCHEDULE A
10,000,000 Units
| Number of Firm | ||||
| Units | ||||
| Underwriter | to be Purchased | |||
Maxim Group LLC |
||||
CRT Capital Group, LLC |
||||
| 10,000,000 | ||||
- 46 -
EXHIBIT A
Form of Target Business Letter
Asia Special Situation Acquisition Corp.
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
Gentlemen:
Reference is made to the Final Prospectus of Asia Special Situation Acquisition Corp.,
(“ASSAC”), dated [ ], 2007 (the “Prospectus”). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in Prospectus.
We have read the Prospectus and understand that ASSAC has established the Trust Fund,
initially in an amount of at least $100,000,000 for the benefit of the Public Stockholders and the
underwriters of ASSAC’s initial public offering (the “Underwriters”) and that, except for up to
$2,000,000 of the interest earned on the amounts held in the Trust Fund, ASSAC may disburse monies
from the Trust Fund only (i) to the Public Stockholders in the event of the redemption of their
shares or the dissolution and liquidation of ASSAC, (ii) for the payment of taxes on interest
earned on the amounts held in the Trust Fund, or (iii) to ASSAC and the Underwriters after it
consummates a Business Combination.
For and in consideration of ASSAC agreeing to evaluate the undersigned for purposes of
consummating a Business Combination with it, the undersigned hereby agrees that it does not have
any right, title, interest or claim of any kind in or to any monies in the Trust Fund (the “Claim”)
and hereby waives any Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with ASSAC and will not seek recourse against the Trust Fund
for any reason whatsoever.
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EXHIBIT B
Form of Vendor Letter
Asia Special Situation Acquisition Corp.
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
Gentlemen:
Reference is made to the Final Prospectus of Asia Special Situation Acquisition Corp.,
(“ASSAC”), dated [ ], 2007 (the “Prospectus”). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in Prospectus.
We have read the Prospectus and understand that ASSAC has established the Trust Fund,
initially in an amount of at least $100,000,000 for the benefit of the Public Stockholders and the
underwriters of ASSAC’s initial public offering (the “Underwriters”) and that, except for up to
$2,000,000 of the interest earned on the amounts held in the Trust Fund, ASSAC may disburse monies
from the Trust Fund only (i) to the Public Stockholders in the event of the redemption of their
shares or the dissolution and liquidation of ASSAC, (ii) for the payment of taxes on interest
earned on the amounts held in the Trust Fund, or (iii) to ASSAC and the Underwriters after it
consummates a Business Combination.
For and in consideration of ASSAC agreeing to use the products or services of the undersigned,
the undersigned hereby agrees that it does not have any right, title, interest or claim of any kind
in or to any monies in the Trust Fund (the “Claim”) and hereby waives any Claim it may have in the
future as a result of, or arising out of, any negotiations, contracts or agreements with ASSAC and
will not seek recourse against the Trust Fund for any reason whatsoever.
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EXHIBIT C
Form of Director/Officer Letter
Asia Special Situation Acquisition Corp.
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
P.O. Box 309GT, Xxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attn: Xxxxxx Xx, Chairman
Gentlemen:
The undersigned officer or director of Asia Special Situation Acquisition Corp. (“ASSAC”)
hereby acknowledges that ASSAC has established the Trust Fund, initially in an amount of at least
$100,000,000 for the benefit of the Public Stockholders and the underwriters of ASSAC’s initial
public offering (the “Underwriters”) and that, except for up to $2,000,000 of the interest earned
on the amounts held in the Trust Fund, ASSAC may disburse monies from the Trust Fund only (i) to
the Public Stockholders in the event of the redemption of their shares or the dissolution and
liquidation of ASSAC, (ii) for the payment of taxes on interest earned on the amounts held in the
Trust Fund, or (iii) to ASSAC and the Underwriters after it consummates a Business Combination.
The undersigned hereby agrees that it does not have any right, title, interest or claim of any
kind in or to any monies in the Trust Fund (the “Claim”) and hereby waives any Claim it may have in
the future as a result of, or arising out of, any contracts or agreements with ASSAC and will not
seek recourse against the Trust Fund for any reason whatsoever.
Notwithstanding the foregoing, such waiver shall not apply to any shares acquired by the
undersigned in the public market.
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