EXHIBIT 1.1
NAVITAS INTERNATIONAL CORPORATION
(a Delaware corporation)
20,000,000 Units
UNDERWRITING AGREEMENT
Dated: o, 2006
NAVITAS INTERNATIONAL CORPORATION
(a Delaware corporation)
20,000,000 Units
UNDERWRITING AGREEMENT
o, 2006
FTN Midwest Securities Corp.
as Representative of the several Underwriters
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Navitas International Corporation, a Delaware corporation (the "Company"),
confirms its agreement with FTN Midwest Securities Corp. ("FTN") and each of the
other Underwriters named in Schedule A hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom FTN is acting as representative (in
such capacity, the "Representative"), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of units of the Company (the "Units", and the Units to
be purchased by the Underwriters pursuant hereto are referred to as the "Initial
Units") set forth in such Schedule A, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 3,000,000
additional Units (the "Option Units") to cover over-allotments, if any. Each
Unit consists of one share of the Company's common stock, par value $.0001 per
share (the "Common Stock"), and two warrants (each, a "Warrant"). Each Warrant
entitles its holder to exercise it to purchase one share of Common Stock for an
exercise price of $5.00 during the period commencing on the later of the
consummation by the Company of its Business Combination (as defined below) or
one year from the effective date (the "Effective Date") of the Registration
Statement (as defined below) and terminating on the fourth anniversary of the
Effective Date. "Business Combination" means any merger, capital stock exchange,
asset acquisition, stock purchase or other similar business combination
consummated by the Company with an operating business, as described in the
Registration Statement. The Units, the shares of Common Stock and the Warrants
included in the Units, and the shares of Common Stock issuable upon exercise of
the Warrants are hereinafter collectively referred to as the "Public
Securities". The Public Securities and the Underwriters' Securities (as defined
in Section 2(c) hereof) are hereinafter collectively referred to as the
"Securities". The shares of Common Stock and the Warrants included in the
Initial Units will not be separately transferable until the earlier to occur of
(i) the expiration of the option described in Section 2(b) hereof to purchase
Option Units or (ii) 20 days after the exercise in full or in part by the
Underwriters of the option described in Section 2(b) hereof to purchase Option
Units, but in no event will the Representative engage in separate trading until
the Company has (x) prepared an audited balance sheet reflecting the Company's
receipt of the gross proceeds of the offering and (y) filed a Form 8-K that
includes such audited balance sheet.
The Company has entered into a warrant agreement with respect to the
Warrants and the Underwriters' Warrants (as defined in Section 2(c)) with
Continental Stock Trust & Transfer Company on
o, 2006 (the "Warrant Agreement"). The Company may call the warrants at any time
after the warrants are exercisable, for a redemption price of $.01 per Warrant,
at any time if notice of not less than 30 days is given and the last sale price
of the Common Stock has been at least $8.50 for any 20 trading days within a 30
trading day period ending on the third business prior to the day on which notice
is given. The Company has caused its initial stockholders who own shares of
Common Stock immediately prior to the consummation of the offering pursuant to
this Agreement (the "Initial Stockholders") to enter into an escrow agreement
(the "Escrow Agreement") with Continental Stock Transfer & Trust Company (the
"Escrow Agreement") on o, 2006, pursuant to which the shares of Common Stock
owned by the Initial Stockholders immediately prior to the consummation of the
offering pursuant to this Agreement will be held in escrow by the Escrow Agent
until the earlier of (x) the liquidation of the Company and (y) the consummation
of the Business Combination and thereafter released according to a graduated
schedule as set forth in the Escrow Agreement. The Company has entered into an
Investment Management Trust Agreement (the "Trust Agreement") with Continental
Stock Transfer & Trust Company, on the date hereof, pursuant to which
$114,000,000 (including deferred underwriting discounts and commissions equal to
$4,800,000) of the proceeds received by the Company for the Initial Units (or
$131,460,000 (including deferred underwriting discounts and commissions equal to
$5,200,000) if the Underwriters' over-allotment option is exercised in full
pursuant to Section 2(b) of this Agreement) will be deposited in a trust fund
(the "Trust Fund") for the benefit of holders of any of the Units, shares of
Common Stock or Warrants offered to the public pursuant to this Agreement.
The Company understands that the Underwriters propose to make a public
offering of the Public Securities as soon as the Representative deems advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-130697),
including the related preliminary prospectus or prospectuses, covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
Securities Act (the "Securities Act Regulations") and paragraph (b) of Rule 424
("Rule 424(b)") of the Securities Act Regulations. The information included in
such prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information." Each prospectus used before such registration
statement became effective, and any prospectus that omitted the Rule 430A
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the amendments thereto, the exhibits and
any schedules thereto, at the time it became effective, and including the Rule
430A Information, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the Securities Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The final prospectus in the form first furnished
to the Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("XXXXX").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Applicable
Time referred to in subsection (i) of this
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Section 1(a), as of the Closing Time referred to in Section 2(d) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the Securities
Act and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, threatened by the Commission or any state
regulatory authority, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Units are purchased,
at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations and did not and will not
contain an untrue statement of a material fact or omit to state 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Units are purchased, at
the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement (or any amendment thereto), the Statutory
Prospectus (as defined below) at the Applicable Time (as defined below) or
the Prospectus (or any amendment or supplement thereto) made in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through FTN expressly for use therein.
As of the Applicable Time (as defined below) , any Issuer Free Writing
Prospectus(es) (as defined below) and the Statutory Prospectus (as defined
below) as of the Applicable Time (collectively, the "General Disclosure
Package"), did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As used in this subsection and elsewhere in this Agreement, (a)
"Applicable Time" means [_____] [a/p]m (Eastern time) on [_____________],
2006 or such other time as agreed by the Company and FTN and (b) "Issuer
Free Writing Prospectus" means any "issuer free writing prospectus," as
defined in Rule 433 under the Securities Act, relating to the Securities
that (i) is required to be filed with the Commission by the Company, (ii)
is a "road show that is a written communication" within the meaning of Rule
433(d)(8)(i) whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it
contains a description of the Securities or of the offering that does not
reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form
required to be retained in the Company's records pursuant to Rule 433(g)
and (c) "Statutory Prospectus" as of any time means the prospectus relating
to the Securities that is included in the Registration Statement
immediately prior to that time (including any document incorporated by
reference therein).
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Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto complied when so filed in all material respects with the Securities
Act Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(ii) Prior Securities Transaction. 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 formation of the Company, except as disclosed in the
Registration Statement.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the Securities
Act and the Securities Act Regulations.
(iv) Regulations. The disclosures in the Registration Statement and
the Prospectus concerning the effects of federal, state and local
regulation on the Company's business as currently contemplated are correct
in all material respects and do not omit to state a material fact.
(v) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(vi) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement, the
General Disclosure Package and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company, other than those in the ordinary course of
business, which are material with respect to the Company, (C) there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock and the Company has not incurred
any liability or obligation, direct or contingent, for borrowed money, and
(D) no member of the Company's management has resigned from any position
with the Company.
(vii) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement, the Warrant Agreement, the Underwriters' Purchase
Option (as defined herein), the Trust Agreement and the Escrow Agreement;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
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qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(viii) Subsidiaries. The Company has no subsidiaries.
(ix) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the section
entitled "Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus, or pursuant to the
exercise of the Warrants or the Underwriters' Purchase Option). The shares
of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and
none of the outstanding shares of capital stock of the Company was issued
in violation of preemptive or other similar rights of any securityholder of
the Company.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Validity of Agreements. The Warrant Agreement, the Trust
Agreement, the Insider Letters, the Underwriters' Purchase Option and the
Escrow Agreement have each been duly and validly authorized by the Company
and, assuming due authorization, execution and delivery of the other
parties thereto, constitute the 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 equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(xii) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company pursuant to
this Agreement against payment of the consideration set forth herein, will
be validly issued and fully paid and non-assessable; the Securities conform
to all statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Securities is or will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to preemptive or other similar rights of any
securityholder of the Company.
(xiii) Absence of Defaults and Conflicts. The Company is not in
violation of its Amended and Restated Certificate of Incorporation (the
"Charter") or its Amended and Restated Bylaws (the "By-laws"), or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company is a party or by which it may be bound, or
to which any of the property or assets of the Company is subject
(collectively, "Agreements and Instruments"); and the execution, delivery
and performance of this Agreement, the Warrant Agreement, the Underwriters'
Purchase Option, the Trust Agreement and the Escrow Agreement and the
consummation of the transactions contemplated herein, therein and in the
Registration Statement and the Prospectus (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the section entitled "Use
of Proceeds") and compliance by the Company with its obligations hereunder
and thereunder have been duly authorized by all
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necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, the
Agreements and Instruments, nor will such action result in any violation of
the provisions of the Charter or By-laws or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition that gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company, that is required
to be disclosed in the Registration Statement and the Prospectus (other
than as disclosed therein), or which might result in a Material Adverse
Effect, or that might materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder;
the aggregate of all pending legal or governmental proceedings to which the
Company is a party or of which any of their respective property or assets
is the subject which are not described in the Registration Statement and
the Prospectus or the Questionnaires (as defined herein), including
ordinary routine litigation incidental to the business, could not result in
a Material Adverse Effect.
(xv) Accuracy of Exhibits and Disclosure of Agreements. There are no
contracts or documents which are of a character required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits
thereto which have not been so described and filed as required. The
agreements and documents described in the Registration Statement and the
Prospectus conform to the descriptions thereof contained therein.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations under this Agreement, the Underwriters' Purchase Option, the
Warrant Agreement, the Trust Agreement and the Escrow Agreement, in
connection with the offering, issuance or sale of the Securities hereunder
or the consummation of the transactions contemplated hereby and thereby,
except such as have been already obtained or as may be required under the
Securities Act or the Securities Act Regulations or state securities laws.
(xvii) Absence of Stabilization or Manipulation. Neither the Company
nor any affiliate of the Company has taken, nor will the Company or any
affiliate take, directly or indirectly, any action that is designed to or
which has constituted or which would be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(xviii) Possession of Licenses and Permits. The Company possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, except where the failure so to possess
would not, singly or in the aggregate, result in a Material Adverse Effect;
the Company is in compliance with
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the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, result in a
Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not, singly or in the aggregate, result in a Material
Adverse Effect; and the Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xix) Title to Property. The Company has good and marketable title to
all properties and assets owned by it material to its business, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made thereof by the Company;
and all of the leases and subleases material to the business of the Company
as now conducted or proposed to be conducted, and under which the Company
holds properties described in the Prospectus, are in full force and effect,
and the Company has not received any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xx) Registration Rights. Except as set forth in the Registration
Statement and the Prospectus, there are no persons with registration rights
or other similar rights to have any securities registered pursuant to the
Registration Statement or to otherwise be registered by the Company under
the Securities Act.
(xxi) Investment Company Act. The Company is not required, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Registration
Statement and the Prospectus will not be required, to register as an
"investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxii) 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) (the "Insider
Letters"), pursuant to which each of the Initial Stockholders of the
Company agrees to certain matters with respect to the Company.
(xxiii) Finder's Fees. Except as set forth in the Registration
Statement and 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 best
of 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").
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(xxiv) Payments Within Twelve Months. The Company has not made any
direct or indirect payments (in cash, securities or otherwise) (i) to any
person, as a finder's fee, consulting fee or otherwise, in consideration of
such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company, (ii) to any 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 the Underwriters.
(xxv) Use of Proceeds. None of the net proceeds of this offering will
be paid by the Company to any participating NASD member or its affiliates,
except as specifically authorized herein and except as may be paid in
connection with a Business Combination as contemplated by the Prospectus.
(xxvi) Insiders' NASD Affiliation. Based on questionnaires distributed
to such persons, no officer, director or any beneficial owner of the
Company's unregistered securities has any direct or indirect affiliation or
association with any NASD member.
(xxvii) D&O Questionnaires. To the best of the Company's knowledge,
all information contained in the director and officer questionnaires and
NASD supplemental questionnaires (the "Questionnaires") completed by each
of the Initial Stockholders and provided to the Underwriter as an exhibit
to his or her Insider Letter is true and correct and the Company has not
become aware of any information that would cause the information disclosed
in the questionnaires completed by each Initial Stockholder to become
inaccurate and incorrect.
(xxviii) Foreign Corrupt Practices Act. Neither the Company nor any
Initial Stockholder 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 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 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.
(xxix) Covenants Not to Compete. No Initial Stockholder, employee,
officer or director of the Company is subject to any non-competition
agreement or non-solicitation agreement with any employer or prior employer
which could materially affect his or her ability to be an Initial
Stockholder, employee, officer and/or director of the Company.
(xxx) Related Party Transactions. There are no business relationships
or related party transactions involving the Company or any other person
required to be described in the Prospectus that have not been described as
required.
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(xxxi) Code of Ethics. The Company has (or prior to the Closing Time
will have) adopted a code of ethics that applies to its directors, officers
and employees, and has filed the code of ethics as an exhibit to the
Registration Statement.
(xxxii) Free Writing Prospectuses; Improper Offering Materials. The
Company has not prepared or used a free writing prospectus, as such term is
defined in Rule 405 of the Securities Act Regulations (a "Free Writing
Prospectus"), in connection with the offering and sale of the Units. The
Company has satisfied the conditions in Rule 433 to avoid a requirement to
file with the Commission any electronic road show. The Company has not
distributed and will not distribute any prospectus or other offering
material (including content on the Company's website that may be deemed to
be a prospectus or other offering material) in connection with the offering
and sale of the Units other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Securities Act to be
distributed by the Company.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to the Representative or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Units. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per Unit set forth in Schedule B, the number of Initial Units set
forth in Schedule A opposite the name of such Underwriter, plus any additional
number of Initial Units which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Option Units. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 3,000,000 of Option Units at the
price per unit set forth in Schedule B, less an amount per unit equal to any
dividends or distributions declared by the Company and payable on the Initial
Units but not payable on the Option Units. The option hereby granted will expire
45 days after the date hereof and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Units upon notice
by the Representative to the Company setting forth the number of Option Units as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Units. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the Representative,
but shall not be later than five full business days after the exercise of such
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Units, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Units then being purchased which the
number of Initial Units set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Units, subject in each case to
such adjustments as the Representative in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Underwriters' Purchase Option. The Company hereby agrees to issue and
sell to the Representative (and/or its designees) on the Effective Date an
option (the "Underwriters' Purchase Option") for the purchase of an aggregate of
1,000,000 Units (the "Underwriters' Units") for an aggregate purchase price of
$100.00. Each of the Underwriters' Units is identical to the Initial Units
except that the Warrants included in the Representative's Units (the
"Underwriters' Warrants") have an exercise price of $6.25 per share (125% of the
exercise price of the Warrants included in the Units sold to the public). The
9
Underwriters' Purchase Option shall be exercisable, in whole or in part,
commencing on the later of (i) one year from the Effective Date and (ii) the
consummation of a Business Combination and expiring on the four-year anniversary
of the Effective Date at an initial exercise price per Underwriters' Unit of
$7.50 per Unit (125% of the initial public offering price of a Unit sold to the
public). The Underwriters' Purchase Option, the Underwriters' Units, the
Underwriters' Warrants and the shares of Common Stock issuable upon exercise of
the Underwriters' Warrants are hereinafter referred to collectively as the
"Underwriters' Securities." Delivery and payment for the Underwriters' Purchase
Option shall be made at the Closing Time. The Company shall deliver to the
Underwriters, upon payment therefor, certificates (if any) for the Underwriters'
Purchase Option in the name or names and in such authorized denominations as the
Representative may request.
(d) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Units shall be made by the Representative and the
Company, at 9:00 A.M. (Eastern time) at the offices of counsel for the
Representative or at such other place as shall be agreed upon, on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representative and the Company
(such time and date of payment and delivery being herein called "Closing Time").
Payment for the Initial Units shall be made at the Closing Time 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, payable
as follows: $114,000,000 (or $5.70 per Initial Unit), including deferred
underwriting discounts and commissions equal to $4,800,000, of the proceeds
received by the Company for the Initial Units (or $131,460,000 (including
deferred underwriting discounts and commissions equal to $5,520,000) if the
Underwriters' over-allotment option is exercised in full pursuant to Section
2(b) of this Agreement) shall be deposited in the Trust Fund established by the
Company for the benefit of the public stockholders as described in the
Registration Statement pursuant to the terms of the Trust Agreement and the
remaining proceeds (less commissions, expense allowances and actual expense
payments or other fees) 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 Initial Units (or through the facilities of the
Depository Trust Company (the "DTC") for the account of the Underwriters). The
Initial Units shall be registered in such name or names and in such authorized
denominations as the Representative may request in writing at least two full
business days prior to the Closing Time. The Company will permit the
Representative to examine and package the Initial Units for delivery, at least
one (1) business day prior to the Closing Date. The Company shall not be
obligated to sell or deliver the Initial Units except upon tender of payment by
the Representative for all the Initial Units.
In addition, in the event that any or all of the Option Units are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates for, such Option Units shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.
Payment shall be made to the Company by wire transfer of Federal (same day)
funds or by certified or bank cashier's check(s) in New York Clearing House
funds to a bank account designated by the Company, against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the Units to be purchased by them. It is understood that each Underwriter
has authorized the Representative, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the Initial Units and
the Option Units, if any, which it has agreed to purchase. FTN, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial Units or the Option Units, if
any, to be purchased by any Underwriter whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
10
(e) Denominations; Registration. Certificates for the Securities shall be
in such denominations and registered in such names as the Representative may
request in writing at least two full business days prior to the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Securities will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
and will notify the Representative immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representative notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus and will furnish the
Representative with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representative or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representative and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the Securities Act. The Company
will furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the Securities Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or
11
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the Securities Act and the Securities Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the
Securities Act or the Securities Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request. The Company
will file with the Commission a Form 8-A providing for the registration under
the Securities Exchange Act of 1934, as amended ("Exchange Act"), of the Units,
the Common Stock and the Warrants. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Statutory Prospectus at the
Applicable Time or in the Registration Statement relating to the Securities or
included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company will promptly notify FTN and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will endeavor in good faith, in
cooperation with the Representative, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representative may designate and to maintain such
qualifications in effect until the earliest of (i) the date on which the
Underwriters shall have ceased to engage in market-making activities in respect
of the Securities, (ii) the date on which the Securities are listed or quoted,
as the case may be, on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market (or any successor to such entities) and (iii) the
date of the Company's liquidation (the period from the Effective Date to such
earliest date, the "Blue Sky Compliance Period"); provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Earnings Statement (Rule 158). The Company will timely file such
reports pursuant to the Exchange Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the Securities Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
12
(i) Quotation. The Company will use its commercially reasonable efforts to
effect and maintain the quotation of the Units, the Common Stock and the
Warrants on the OTC Bulletin Board.
(j) Restriction on Sale of Securities. Until the consummation of a Business
Combination, the Company will not, without the prior written consent of the
Representative, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration statement
under the Securities Act with respect to any of the foregoing or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of a Warrant, (C) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend reinvestment
plan or any employee benefit plan of the Company, or (D) any of the Units,
shares of Common Stock and Warrants issued by the Company upon the exercise of
the Underwriters' Purchase Option.
(k) Business Combination. The Company will not consummate a Business
Combination with any entity that is affiliated with the Underwriters or any
Initial Stockholder or with respect to which the Underwriters or any of their
affiliates submitted a proposal or provided other merger and acquisition
services unless (i) such Business Combination has been approved by a majority of
the Company's independent directors or (ii) the Company obtains an opinion from
an unaffiliated independent investment banking firm which is a member of the
National Association of Securities Dealers, Inc. that such Business Combination
is fair to the Company's stockholders from a financial perspective. The Company
shall not pay the Underwriters or any Initial Stockholder or any of their
affiliates any fees or compensation, for services rendered to the Company prior
to, or in connection with, the consummation of a Business Combination (except in
the case of Initial Stockholders who are officers of the Company, for services
rendered to the Company in their capacities as officers of the Company);
provided, that the Underwriters and the Initial Stockholders shall be entitled
to reimbursement from the Company for their reasonable out-of-pocket expenses
incurred in connection with seeking and consummating a Business Combination.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the Securities Act, will file all
documents required to be filed with the Commission pursuant to the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations of the Commission thereunder.
(m) Reports to the Representative. For a period of five years from the
Effective Date, the Company will furnish to the Representative 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 filed by the Company
with the Commission under the Securities Act, (v) at the request of the
Representative, a copy of monthly statements, if any, setting forth such
information regarding the Company's results of operations and financial position
(including balance sheet, profit and loss statements and data regarding
outstanding purchase orders) as is regularly prepared by management of the
Company and (vi) 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
13
to time reasonably request, provided, that in the case of subsections (v) or
(vi) above, the Representative shall sign, if required by the Company, a
Regulation FD compliant confidentiality agreement reasonably acceptable to the
Representative in connection with the Representative's receipt of such
information.
(n) Transfer Sheets. For a period of two 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 reasonably acceptable to
the Representative ("Transfer Agent") and will furnish to the Underwriters at
the Company's sole cost and expense, for a period of one year following the
Effective Date, such transfer sheets of the Company's securities as the
Representative may request, including the monthly consolidated transfer sheets
of the Transfer Agent and DTC.
(o) Disqualification of Form S-1. For a period equal to four years from the
date hereof, unless earlier liquidated, the Company will not knowingly take any
action or actions that may prevent or disqualify the Company's use of Form S-1
(or other appropriate form) for the registration of the Warrants under the
Securities Act (except in connection with a going-private transaction).
(p) Secondary Market Trading Survey. Until the termination of the Blue Sky
Compliance Period, the Company shall engage counsel to the Underwriters, for a
one-time fee of $5,000 payable on the Closing Date, to deliver and update to the
Underwriters on a timely basis, but in any event on the Effective Date and at
the beginning of each fiscal quarter, a written report detailing those states in
which the Securities may be traded in non-issuer transactions under the Blue Sky
laws of the fifty States.
(q) Notice to NASD. In the event any person or entity (excluding attorneys,
accountants, engineers, environmental or labor consultants, investigatory firms,
technology consultants and specialists and similar service providers that are
not affiliated or associated with the NASD and are not brokers or finders) is
engaged, in writing, to assist the Company in finding or evaluating a Target
Business, the Company will provide the following to the NASD and the
Representative prior to the consummation of the Business Combination: (i) copies
of agreements governing such services (with the names of the parties
appropriately redacted to account for privilege or confidentiality concerns);
and (ii) justification as to why the person or entity providing the merger and
acquisition services should not be considered an underwriter or related person
with respect to the Company's initial public offering, as such term is defined
in Rule 2710(a)(6) 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. Further, the Company agrees
to promptly advise the NASD and the Representative and its counsel if it learns
that any officer, director or owner of at least 5% of the Company's outstanding
shares of Common Stock becomes an affiliate or associated person of an NASD
member participating in the distribution of the Public Securities.
(r) Internal Controls. During the Blue Sky Compliance Period, 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 GAAP and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(s) Audit Committee. The Company will establish and maintain an audit
committee composed entirely of independent directors, which audit committee will
adopt a charter that satisfies the Exchange Act and the rules and regulations of
the Commission adopted thereunder.
14
(t) Accountants. Until the earlier 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 an independent public accountant.
(u) 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 Time (the "Audited Financial Statements") reflecting the receipt by the
Company of the proceeds of the initial public offering. As soon after the
Closing Time as the Audited Financial Statements become available, the Company
shall file a Current Report on Form 8-K with the Commission, which Report shall
contain the Audited Financial Statements.
(v) Business Combination Announcement. Within five business days following
the consummation by the Company of a Business Combination, the Company shall
cause an announcement (the "Business Combination Announcement") to be placed, at
its cost, in The Wall Street Journal announcing the consummation of the Business
Combination and indicating that the Representative was the managing underwriter
in the offering. The Company shall supply the Representative with a draft of the
Business Combination Announcement and provide the Representative with a
reasonable opportunity to comment thereon. The Company will not place the
Business Combination Announcement without the final approval of the
Representative, which approval shall not be unreasonably withheld.
(w) Trust Fund Waiver Acknowledgment. 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 in a Business Combination (any, a
"Target Business"; collectively, the "Target Business(es)") or obtain the
services of any vendor (excluding, solely with respect to any deferred
underwriters' discounts and commissions, the Underwriters) unless and until such
Target Business(es) or vendor acknowledges in writing, whether through a letter
of intent, memorandum of understanding or other similar document (and
subsequently 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 $114,000,000
(including deferred underwriting discounts and commissions equal to $4,800,000)
for the benefit of the public stockholders and that the Company may disburse
monies from the Trust Fund only (i) to the public stockholders in the event they
elect to convert their IPO Shares (as defined in Section 3(z)) and the
liquidation of the Company, (ii) to the Company when it consummates a Business
Combination or (iii) solely with respect to underwriters' deferred discounts and
commissions placed in the Trust Fund, to the Underwriters after consummation of
a Business Combination and (b) for and in consideration of the Company (i)
agreeing to evaluate such Target Business(es) for purposes of consummating a
Business Combination with it or (ii) agreeing to engage the services of the
vendor, as the case may be, such Target Business(es) or vendor agrees, subject
to the terms of this paragraph (w), that it does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund (the
"Claims") 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.
(x) Insider Letters. The Company shall not take any action or omit to take
any action that would cause a breach of any of the Insider Letters and will not
allow any amendments to, or waivers of, such Insider Letters without the prior
written consent of the Representative.
(y) Charter and Bylaws. 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 the
Charter or the By-laws. Prior to the consummation of a Business Combination, the
Company will not amend the Charter without the prior written consent of the
Representative.
15
(z) 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.
(aa) Acquisition/Liquidation Procedure; Amendments to Charter. 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 (the
"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, as described in the Prospectus),
the Company's officers will take all such action necessary to dissolve and
liquidate the Company as soon as reasonably practicable and distribute an
aggregate sum equal to the amount in the trust account, inclusive of any
deferred underwriting discounts and commissions and any interest (net of taxes
payable thereon and any amounts disbursed to the Company to cover operating
expenses, as described in the Prospectus), plus any remaining net assets. In no
event, however, will the Company's liquidation value be less than the Trust
Fund, inclusive of any net interest income thereon. Only holders of IPO Shares
(as defined below) will be entitled to receive, in proportion to their
respective equity interests, liquidating distributions and the Company will pay
no liquidating distributions with respect to any other shares of capital stock
of the Company. With respect to the Business Combination Vote, the Company shall
cause all of the Initial Stockholders to vote the shares of Common Stock owned
by them immediately prior to the consummation of the offering in accordance with
the vote of the holders of a majority of the IPO Shares present, in person or by
proxy, at a meeting of the Company's stockholders called for such purpose. At
the time the Company seeks approval of any potential Business Combination, the
Company will offer each holder of the Company's Common Stock issued in this
offering (the "IPO Shares") the right to convert their IPO Shares at a per share
conversion price (the "Conversion Price") equal to the quotient determined by
dividing (1) the amount in the Trust Fund (inclusive of any deferred
underwriting discounts and commissions and any interest, but net of taxes
payable thereon and any amounts disbursed to the Company to cover operating
expenses, as described in the Prospectus), calculated as of two business days
prior to the proposed consummation of the Business Combination, by (2) the total
number of IPO Shares. If (a) holders of at least a majority of the IPO Shares
cast at the meeting to approve the Business Combination are voted for the
approval of such Business Combination, and (b) less than 20% in interest of the
Company's IPO Shares vote against the Business Combination and elect to convert
their IPO Shares, then in such case the Company may, but will not be required
to, proceed with such Business Combination (and if the Company elects to so
proceed, it will convert shares, based upon the Conversion Price, from those
holders of IPO Shares who affirmatively requested such conversion and who voted
against the Business Combination). If holders of 20% or more in interest of the
Company's IPO Shares vote against the Business Combination and elect to convert
their IPO Shares, the Company will not proceed with such Business Combination
and will not convert such shares. The Company further (x) covenants and agrees
that prior to the Business Combination it will not seek to amend or modify any
of the provisions of the Charter relating to submission of the Business
Combination to its stockholders for approval or the acquisition/liquidation
procedures contained in this subsection (aa) and (y) acknowledges that the
purchasers of the Initial Units in this Offering shall be deemed to be third
party beneficiaries of this Agreement (it being specifically acknowledged by the
Underwriters that the Underwriters will not waive the provisions of this
sentence under any circumstances).
(bb) Rule 419. The Company agrees that it will use its commercially
reasonable efforts to prevent the Company from becoming subject to Rule 419
under the Securities Act prior to the consummation of any Business Combination
(including but not limited to using its commercially
16
reasonable 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).
(cc) Presentation of Potential Target Business(es). The Company shall cause
each of the Initial Stockholders to agree that, in order to minimize potential
conflicts of interest which may arise from multiple affiliations, the Initial
Stockholders will present to the Company for its consideration, prior to
presentation to any other person or company, any opportunity to acquire all or
substantially all of the outstanding equity securities or assets of, or
otherwise acquire a controlling interest in, an operating business in India
focused primarily on product companies in industries well positioned to grow as
a result of the massive and ongoing development of the Indian infrastructure,
whether by merger, capital stock exchange, asset acquisition, stock purchase or
any other similar type of combination, until the earlier of the consummation of
the Business Combination or the Termination Date.
(dd) Target Net Assets. The Company agrees that the initial Target
Business(es) that it acquires in a Business Combination must have a fair market
value equal to at least 80% of the Company's net assets at the time of such
Business Combination. 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 the fair market value of such Target Business(es),
the Company shall 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; but the Company need not obtain such an opinion if its Board of
Directors independently determines the fair market value of the Target
Business(es). If it does obtain the opinion of an investment banking firm, the
Company will include a summary of the opinion in the proxy statement that will
be mailed to stockholders in connection with obtaining approval of the business
combination (and will obtain the consent of the investment banking firm to the
inclusion of their report in the proxy statement).
(ee) Free Writing Prospectuses. The Company agrees that, unless it obtains
the prior consent of the Representative, it will not make any offer relating to
the Securities that would constitute an "issuer free writing prospectus," as
defined in Rule 433 of the Securities Act, or that would otherwise constitute a
"free writing prospectus," as defined in Rule 405 of the Securities Act,
required to be filed with the Commission. Any such free writing prospectus
consented to by the Representative is hereinafter referred to as a "Permitted
Free Writing Prospectus". The Company agrees that it will treat each Permitted
Free Writing Prospectus as an "issuer free writing prospectus" as defined in
Rule 433, that it will comply with the requirements of Rule 433 applicable to
any Permitted Free Writing Prospectus (including timely filing with the
Commission where required, legending and record keeping), and that it will
satisfy the conditions in Rule 433 to avoid a requirement to file with the
Commission any electronic road show.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto; (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities; (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters; (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors; (v) the qualification of the Securities
under state or foreign securities or blue sky laws, including the costs of
preparing, printing and mailing the "Preliminary Blue Sky Memorandum," and all
amendments and supplements thereto, the
17
preparation of the Secondary Market Trading Survey (as defined above), and the
reasonable fees and disbursements of counsel for the Underwriters related
thereto (such fees, including the one-time fee of $5,000 in respect of the
Secondary Market Trading Survey, shall be capped at $40,000); (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Permitted Free Writing Prospectus and of the Prospectus and any amendments or
supplements thereto; (vii) the fees and expenses of any of the Transfer Agent or
the escrow agent, trustee or registrar for the Securities; (viii) the Company's
expenses associated with "due diligence" and "road show" meetings arranged by
the Representative (including expenses of the Company associated with the
production of road show slides and graphics, and travel and lodging expenses of
the directors and officers of the Company); (ix) filing fees, costs and expenses
(excluding fees for counsel to the Underwriters) incurred in registering the
offering with the NASD; and (x) all other costs and expenses customarily borne
by an issuer incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section 4(a).
(b) Nonaccountable Expenses. The Company further agrees that, in addition
to the expenses payable pursuant to paragraph (a) above, at the Closing Time, it
will pay to the Representative a non-accountable expense allowance equal to one
percent (1.0%) of the gross proceeds received by the Company from the sale of
the Initial Units, by deduction from the proceeds of the offering of the Initial
Units contemplated herein.
(c) Expenses Related to Business Combination. The Company further agrees
that, in the event the Representative assists the Company in trying to obtain
stockholder approval of a proposed Business Combination, the Company agrees to
reimburse the Representative for all out-of-pocket expenses, including, but not
limited to, "road-show" and due diligence expenses; provided, that, such
reimbursement will only be made if such assistance is provided by the
Representative pursuant to an agreement between the Representative and the
Company.
(d) Termination. If this Agreement is terminated by the Representative
under Section 9(c), the Company shall reimburse the Underwriters for their
expenses as described in such Section 9(c).
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act or proceedings
therefor initiated or threatened 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 counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the Representative
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxxx
XxXxxxxxx LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and delivered at the Company's request, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Underwriters may reasonably request.
18
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Xxxx & Xxxxxx LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (v), (vi) (solely as
to preemptive or other similar rights arising by operation of law or under the
Charter or By-laws), (viii) through (x), inclusive, (xi), (xiii) (solely as to
the information in the Prospectus under "Description of Securities --Common
Stock") and the second to penultimate paragraph of the opinion of Xxxxxxx
XxXxxxxxx LLP (which appears as the penultimate paragraph of Exhibit A hereto).
In giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representative. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus or the General Disclosure Package, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, and the Representative shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
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, to their knowledge, contemplated by the Commission.
(e) Auditor's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Xxxxxx, Xxxxx & Company
LLP, independent public accountants for the Company, a letter dated such date,
in form and substance satisfactory to the Representative, together with signed
or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from Xxxxxx, Xxxxx & Company LLP, independent public accountants
for the Company, a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) Quotation of Securities. At Closing Time, the Units, the Common Stock
and the Warrants shall have been approved for quotation on the OTC Bulletin
Board.
(h) No Objection. The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Conditions to Purchase of Option Units. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Units, the representations and warranties of
the Company contained herein and the statements in any certificates
19
furnished by the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representative shall have
received:
(1) Officers' Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d) hereof
remains true and correct as of such Date of Delivery.
(2) Opinion of Counsel for Company. The favorable opinion of Xxxxxxx
XxXxxxxxx LLP, counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Units to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
Xxxxxx Xxxx & Xxxxxx LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Units to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(4) Bring-down Comfort Letter. A letter from Xxxxxx, Xxxxx & Company,
LLP, independent public accountants for the Company, in form and substance
satisfactory to the Representative and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Representative pursuant to Section 5(f) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a date
not more than five days prior to such Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representative and counsel for the Underwriters.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, as such term is defined in
Rule 501(b) under the Securities Act (each, an "Affiliate"), each dealer
selected by the Representative that participates in the offering and sale of the
Securities, each of their respective directors, officers and employees, and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in (1) any preliminary prospectus, any Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement
thereto); or (2) any application or other document or written communication
(in this Section 5, collectively called "application") (x) executed by the
Company or (y) based upon
20
written information furnished by the Company, in either case in any
jurisdiction in order to qualify the Securities under the securities laws
thereof or filed with the Commission, any state securities commission or
agency, Nasdaq or any securities exchange; or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided, that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company;
(iii) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Representative), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).
(2) Insofar as this indemnity agreement may permit indemnification for
liabilities under the Securities Act of any person who is a partner of an
Underwriter or who controls an underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act and who, at the date of
this Agreement, is a director or officer of the Company or controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, such indemnity agreement is subject to the undertaking of the
Company in the Registration Statement under Item 17 thereof.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representative expressly for use therein.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
21
counsel to the indemnified parties shall be selected by the Representative, and,
in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on the cover of the
Prospectus.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
22
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and each Underwriter's Affiliates and selling agents shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Units set forth opposite their respective names in Schedule A hereto
and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of any Underwriter or its Affiliates or selling agents, any
person controlling any Underwriter, its officers or directors or any person
controlling the Company and (ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) General. The Representative may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time if (i) there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus or the General Disclosure
Package, any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, or (ii) there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representative, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
trading in any securities of the Company has been suspended or materially
limited by the Commission, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of such
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(v) a banking moratorium has been declared by either Federal or New York
authorities. If this Agreement is terminated pursuant to this Section 9(a), such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
shall survive such termination and remain in full force and effect.
23
(b) Non-Fulfillment of Conditions. If any condition specified in Section 5
(other than Sections 5(c), 5(h) (other than arising out of the Company's failure
to respond to the NASD's reasonable request for information or reasonable
assurances from the Company) and 5(i)(3)) shall not have been fulfilled when and
as required to be fulfilled, this Agreement, or in the case of any condition to
the purchase of the Option Unit, on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase the
relevant Option Units, may be terminated by the Representative by notice to the
Company at any time prior to Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Section 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
(c) Expenses. If this Agreement is terminated by the Representative in
accordance with the provisions of Section 9(a)(i) or Section 9(b), the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriter, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, then the Company shall be
entitled to a further period of an additional one business day within which
to procure another party or parties satisfactory to the Representative to
purchase the Initial Units or Option Units on the terms contained herein;
provided that if the Company does procure another party within such one
business day period, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Units to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of the Company (except for under Sections 4 and 6
hereof) and any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Units, as
the case may be, either the Representative or the Company shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding five business days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
24
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. For purposes of the foregoing, the term "tax
treatment" is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term "tax structure" includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices shall be directed
to:
If to the Underwriters, to the Representative at:
FTN Midwest Securities Corp.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Syndicate Department
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
Two Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: X. Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
If to the Company, to:
Navitas International Corporation
0 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Servjeet X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
SECTION 13. Binding Effect. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or
25
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and such controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 14. No Fiduciary or Advisory Duty. The Company acknowledges that
none of the Underwriters (including the Representative) nor any of their
controlling persons shall have any fiduciary or advisory duty to the Company or
any of its controlling persons arising out of, or in connection with, this
Agreement or the offer and sale of the Units.
SECTION 15. Amendment. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
SECTION 16. Entire Agreement. This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior agreements
and understandings of the parties, oral and written, with respect to the subject
matter hereof.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 19. Waivers. 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 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.
SECTION 20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 21. Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
26
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
NAVITAS INTERNATIONAL CORPORATION
By ____________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FTN MIDWEST SECURITIES CORP.
By _________________________________________________________
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
27
SCHEDULE A
Number of
Name of Underwriter Initial Units
------------------- -------------
FTN Midwest Securities Corp............................
Canaccord Xxxxx .......................................
----------
Total.................................................. 20,000,000
==========
Sch A-1
SCHEDULE B
NAVITAS INTERNATIONAL CORPORATION
20,000,000 Units
1. The initial public offering price per Unit, determined as provided in
Section 2, shall be $6.00.
2. The purchase price per unit for the Units to be paid by the several
Underwriters shall be $5.52, being an amount equal to the initial public
offering price set forth above less $0.48 per Unit (representing (x) $0.42 per
Unit for the underwriting discounts and commissions and (y) $0.06 per Unit for
the Underwriters' non-accountable expense allowance); provided, that the
purchase price per Unit for any Option Units purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per Unit equal to (a) $0.06 per share representing the non-accountable expense
allowance (which is not payable with respect to Option Units and (b) any
dividends or distributions declared by the Company and payable on the Initial
Units but not payable on the Option Units.
B-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
TO BE SEPARATELY NEGOTIATED]
B-2
