PLACEMENT UNIT AGREEMENT
PLACEMENT
UNIT AGREEMENT (this
“Agreement”) made
as
of this ___ day of ________, 2006 among Phoenix India Acquisition Corp., a
Delaware corporation (the “Company”), Xxxxxx & Xxxxxxx, LLC (“Xxxxxx”) and
the undersigned (the “Purchasers”).
WHEREAS,
the Company has filed with the Securities and Exchange Commission (“SEC”) a
registration statement on Form S-1, as amended (File No. 333-128008) (the
“Registration Statement”), in connection with the Company’s initial public
offering (the “IPO”) of up to 6,156,250 units, each unit (“Unit”) consisting of
one share of the Company’s common stock, $.0001 par value (the “Common Stock”),
and (ii) one warrant (the “Warrants”), each Warrant to purchase one share of
Common Stock; and
WHEREAS,
the Company desires to sell in a private placement to the Purchasers (the
“Placement”) an aggregate of 93,750 units (the “Placement Units”) substantially
identical to the Units being issued in the IPO pursuant to the terms and
conditions hereof and as set forth in the Registration Statement, except that
the Placement Units, Common Stock and Warrants to be issued in the Placement
shall not be registered under the Securities Act of 1933, as amended (the
“Securities Act”); and
WHEREAS,
each Purchaser desires to acquire the number of Placement Units set forth
opposite his name on Schedule
A
hereto;
and
WHEREAS,
the Warrants included in the Placement Units shall be governed by the Warrant
Agreement filed as an exhibit to the Registration Statement; and
WHEREAS,
the Purchasers are entitled to registration rights with respect to the Common
Stock and the Warrants comprising the Placement Units and the Common Stock
underlying such Warrants (collectively, the “Registrable Securities”) on the
terms set forth in this Agreement.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
1. Purchase
of Units.
The
Purchasers hereby agree, directly or through nominees, to purchase an aggregate
of 93,750 Placement Units at a purchase price of $8.00 per Placement Unit,
or an
aggregate of $750,000 (the “Purchase Price”). Such purchases shall be in the
names and amounts set forth on Schedule
A hereto.
2. Closing.
The
closing of the purchase and sale of the Placement Units (the “Closing”) will
take place at such time and place as the parties may agree (the “Closing Date”),
but in no event later than the date on which the SEC declares the Registration
Statement effective (the “Effective Date”). On the Effective Date, the
Purchasers shall pay the Purchase Price by wire transfer of funds to an account
maintained by the Company. Immediately prior to the closing of the IPO, the
Company shall deposit the Purchase Price into the trust account described in
the
Registration Statement (the “Trust Account”). The certificates for the Common
Stock and Warrants comprising the Placement Units shall be delivered to the
Purchasers promptly after the closing of the IPO.
3. Voting
of Shares.
If the
Company solicits approval of its stockholders of a Business Combination, the
Purchasers shall vote all of the shares of the Common Stock acquired by the
Purchasers (i) pursuant to this Agreement, (ii) in the IPO and (iii) in the
aftermarket in favor of the Business Combination and therefore waive any
redemption rights they might have with respect to certain of such shares. As
used herein, a “Business Combination” shall mean an acquisition by merger,
capital stock exchange, asset or stock acquisition of, or similar business
combination with, an operating business in the security industry selected by
the
Company.
4. Waiver
of Liquidation Distributions.
In
connection with the Placement Units purchased pursuant to this Agreement, the
Purchasers hereby waive any and all right, title, interest or claim of any
kind
in or to any liquidating distributions by the Company in the event of a
liquidation of the Company upon the Company's failure to timely complete a
Business Combination. For purposes of clarity, any shares of Common Stock
purchased in the IPO or the aftermarket by the Purchasers shall be eligible
to
receive any liquidating distributions by the Company.
5. Lock-Up
Agreement.
The
Purchasers shall not sell, assign, hypothecate, or transfer any of the Common
Stock purchased pursuant to this Agreement until the earlier of consummation
of
a Business Combination or liquidation of the Company. In order to enforce this
covenant, the undersigned agrees, if requested by Xxxxxx, to deposit the
Placement Units in an account to be established at Xxxxxx.
6. Representations
and Warranties of the Purchasers.
Each
Purchaser hereby represents and warrants to the Company that:
a. The
Purchaser is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act.
b. The
Placement Units, Common Stock and Warrants are being acquired for the
Purchaser’s own account, only for investment purposes and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act.
c. The
Purchaser has the full right, power and authority to enter into this Agreement
and this Agreement is a valid and legally binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms.
7. Registration
Rights.
a. Demand
Registration.
i) At
any
time and from time to time on or after the date on which the Company has
publicly announced that it has entered into a letter of intent or made a
comparable announcement with respect to a Business Combination, the Purchasers
or their transferees holding a majority-in-interest of the Registrable
Securities may make a written demand for registration under the Securities
Act
of all or part of their Registrable Securities (a “Demand Registration”). Any
demand for a Demand Registration shall specify the number of Registrable
Securities proposed to be sold and the intended method(s) of distribution
thereof. The Company will notify all holders of Registrable Securities of the
demand, and each holder of Registrable Securities who wishes to include all
or a
portion of such holder’s Registrable Securities in the Demand Registration (each
such holder including shares of Registrable Securities in such registration,
a
“Demanding Holder”) shall so notify the Company within fifteen (15) days after
the receipt by the holder of the notice from the Company. Upon any such request,
the Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration.
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ii) The
Company shall, as expeditiously as possible and in any event within sixty (60)
days after receipt of a request for a Demand Registration, prepare and file
with
the SEC a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which
form
shall be available for the sale of all Registrable Securities to be registered
thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its best efforts to cause such registration statement to become
effective as promptly as practicable, but in no event prior to the consummation
of the Business Combination.
iii) The
Company shall not be obligated to effect more than two Demand Registrations
in
respect of Registrable Securities.
b. “Piggyback”
Registration Rights.
Subject
to the last sentence of this Section 7(b), at any time after a Business
Combination, if the Company shall determine to proceed with the actual
preparation and filing of a new registration statement under the Securities
Act
in connection with the proposed offer and sale of any of its securities by
it or
any of its security holders (other than a registration statement on Form X-0,
X-0 or other limited purpose form), the Company will give written notice of
its
determination to the Purchasers or their nominees. Upon the written request
from
a majority-in-interest of the Purchasers, within fifteen (15) days after receipt
of any such notice from the Company, the Company will, except as herein
provided, cause all of the Registrable Securities covered by such request (the
“Requested Stock”) held by the Purchasers making such request (the “Requesting
Holders”) to be included in such registration statement (each, a “Piggy-Back
Registration”), all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Requested Stock;
provided, further, that nothing herein shall prevent the Company from, at any
time, abandoning or delaying any such registration statement. If any such
registration statement pursuant to this Section 7(b) shall be underwritten
in
whole or in part, the Company may require that the Requested Stock be included
in the underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters. In such event, the Requesting Holders
shall, if requested by the underwriters, execute an underwriting agreement
containing customary representations and warranties by selling stockholders
and
a lock-up on Registrable Securities not being sold. If in the good faith
judgment of the managing underwriter of such public offering the inclusion
of
all of the Requested Stock would reduce the number of shares to be offered
by
the Company or interfere with the successful marketing of the shares of stock
offered by the Company, the number of shares of Requested Stock otherwise to
be
included in the underwritten public offering may be reduced pro rata (by number
of shares) among the Requesting Holders and all other holders of registration
rights who have requested inclusion of their securities or excluded in their
entirety if so required by the underwriter. To the extent only a portion of
the
Requested Stock is included in the underwritten public offering, those shares
of
Requested Stock which are thus excluded from the underwritten public offering
and any other securities of the Company held by such holders shall be withheld
from the market by the Holders thereof for a period, not to exceed 90 days,
which the managing underwriter reasonably determines is necessary in order
to
effect the underwritten public offering. At such time as the provisions of
the
registration rights agreement filed as an exhibit to the Registration Statement
covering the shares of Common Stock acquired by the Purchasers prior to the
IPO
may be exercised, the exercise and procedural provisions of such agreement,
rather than the provisions of Sections 7(b), 7(c) and 7(d) hereof, shall govern
the Registrable Securities with respect to Piggy-Back
Registrations.
c. Registration
Procedures.
To the
extent required by Sections 7(a) or 7(b), the Company will:
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i) prepare
and file with the SEC a registration statement with respect to such securities,
and use its best efforts to cause such registration statement to become and
remain effective until the earlier of the date on which all of the Registrable
Securities included in the registration statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such
registration statement or three years from the effective date;
ii) prepare
and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep
such
registration statement effective until the earlier of the date on which all
of
the Registrable Securities included in the registration statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such registration statement or three years from the effective
date;
iii) furnish
to the holders participating in such registration statement and to the
underwriters of the securities being registered such reasonable number of copies
of the registration statement, preliminary prospectus, final prospectus and
such
other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
iv) use
its
best efforts to register or qualify the securities covered by such registration
statement under such state securities or blue sky laws of such jurisdictions
as
the holders may reasonably request in writing within 20 days following the
original filing of such registration statement, except that the Company shall
not for any purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
v) notify
the holders, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been
filed;
vi) notify
the holders promptly of any request by the SEC for the amending or supplementing
of such registration statement or prospectus or for additional
information;
vii) prepare
and promptly file with the SEC and promptly notify such holders of the filing
of
such amendment or supplement to such registration statement or prospectus as
may
be necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, any event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading; and
viii) advise
the holders, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the SEC suspending the effectiveness of
such registration statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance
of
any stop order or to obtain its withdrawal if such stop order should be
issued.
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The
Purchasers shall cooperate with the Company in providing the information
necessary to effect the registration of the Registrable Securities, including
completion of customary questionnaires.
d. Expenses.
The
Company shall bear all costs and expenses incurred in connection with any Demand
Registration pursuant to Section 7(a), any Piggy-Back Registration pursuant
to
Section 7(b), and all expenses incurred in performing or complying with its
other obligations under this Agreement, whether or not the registration
statement becomes effective, including, without limitation: (i) all registration
and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses;
(iv)
the Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred
in
connection with the exchange listing of the Registrable Securities; (vi)
National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses
or
costs associated with the delivery of any opinions or comfort letters); (viii)
the fees and expenses of any special experts retained by the Company in
connection with such registration statement and (ix) the fees and expenses
of
one legal counsel selected by the holders of a majority-in-interest of the
Registrable Securities included in such registration statement. The Company
shall have no obligation to pay any underwriting discounts or selling
commissions attributable to the Registrable Securities being sold by the holders
thereof, which underwriting discounts or selling commissions shall be borne
by
such holders. Additionally, in an underwritten offering, all selling
shareholders and the Company shall bear the expenses of the underwriter pro
rata
in proportion to the respective amount of shares each is selling in such
offering.
8. Waiver
and Indemnification.
The
Purchasers hereby waive any and all rights to assert any present or future
claims, including any right of rescission, against the Company, Xxxxxx or the
other underwriters in the IPO with respect to their purchase of the Placement
Units, and each Purchaser agrees jointly and severally to indemnify and hold
the
Company, Xxxxxx and the other underwriters in the IPO harmless from all losses,
damages or expenses that relate to claims or proceedings brought against the
Company, Xxxxxx or such other underwriters by any Purchaser of the Placement
Units or their transferees, heirs, assigns or any subsequent holders of the
Placement Units.
9. Counterparts;
Facsimile.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and all of which taken together
shall
constitute one and the same instrument. This Agreement or any counterpart may
be
executed via facsimile transmission, and any such executed facsimile copy shall
be treated as an original.
10. Governing
Law.
This
Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York. Each of the
parties hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of New York or the United States District Court for
the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the __
day
of ________, 2006.
| PHOENIX INDIA ACQUISITION CORP. | ||
| |
|
|
| By: | ||
|
Xxxxxx Xxxxxx, President and Chief Strategy Officer |
||
| XXXXXX & XXXXXXX, LLC | ||
| |
|
|
| By: | ||
|
|
||
6
SCHEDULE
A
|
Beneficial
Owner
|
Number
of Units
|
|
Xxxxxx
Xxxxxx
|
23,439
|
|
Xxxx
Xxxxxxxx
|
23,437
|
|
Xxxxx
Xxxxxxxxxx
|
23,437
|
|
Xxxxxxx
Xxxxxxx
|
23,437
|
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