JWC Acquisition Corp. 111 Huntington Avenue, Suite 2900 Boston, Massachusetts 02199 Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Attn: General Counsel Re: Initial Public Offering Gentlemen:
Exhibit 10.3
______________ ___, 2010
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Re: Initial Public Offering
Gentlemen:
This letter (“Letter Agreement”) is being delivered to you in accordance with the Underwriting
Agreement (the “Underwriting Agreement”) entered into by and between JWC Acquisition Corp., a
Delaware corporation (the “Company”) and Citigroup Global Markets Inc., as representative of the
several underwriters (the “Underwriters”), relating to an underwritten initial public offering (the
“Offering”), of 15,000,000 of the Company’s units (the “Units”), each comprised of one share of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant
exercisable for one share of Common Stock (each, a “Warrant”). The Units sold in the Offering
shall be quoted and traded on the Over-the-Counter Bulletin Board pursuant to a registration
statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with the Securities
and Exchange Commission (the “Commission”). Certain capitalized terms used herein are defined in
paragraph 8 hereof.
In order to induce the Company and the Underwriters to enter into the Underwriting Agreement
and to proceed with the Offering, the Company has entered into that certain letter agreement, dated
as of ___, 2010, by and among JWC Acquisition, LLC (the “Sponsor”), the members of the Sponsor (the
“Members”) and X.X. Childs Associates, L.P. (the “Childs”).
Therefore, in order to induce the Company and the Underwriters to enter into the Underwriting
Agreement and to proceed with the Offering and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned xxxxxx agrees with the
Company as follows:
1. The undersigned hereby agrees that in the event that the Company fails to consummate a
Business Combination (as defined in the Underwriting Agreement) within 21 months from the closing
of the Offering, he or she shall take all reasonable steps to cause the Company to (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible, redeem
100% of the Common Stock sold as part of the Units in the Offering, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
but net of franchise and income taxes payable (less up to $100,000 of such net interest to pay
dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish Public Stockholders’
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rights as stockholders (including the right to receive further liquidation distributions, if
any), subject to applicable law, and subject to the requirement that any refund of income taxes
that were paid from the Trust Account which is received after the redemption shall be distributed
to the former Public Stockholders, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board
of directors, dissolve and liquidate, subject in each case to the Company’s obligations under
Delaware law to provide for claims of creditors and other requirements of applicable law.
2. (a) The undersigned agrees that if the Company seeks stockholder approval of a proposed
Business Combination, then in connection with such proposed Business Combination, he or she shall
(i) vote all the Founder Shares owned by him or her in accordance with the majority of the votes
cast by the Public Stockholders and (ii) vote any shares acquired by him or her in the Offering or
the secondary public market in favor of such proposed Business Combination.
(b) To the extent that the Underwriters do not exercise their over-allotment option to
purchase an additional 2,250,000 shares of Common Stock (as described in the Prospectus), the
undersigned agrees that he or she shall return to the Company for cancellation, at no cost, the
number of Founder Shares held by him or her determined by multiplying [_____] by a fraction, (i)
the numerator of which is 2,250,000 minus the number of shares of the Common Stock purchased by the
Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is
2,250,000. The undersigned further agrees that to the extent that (a) the size of the Offering is
increased or decreased and (b) the undersigned has either purchased or sold shares of the Common
Stock or an adjustment to the number of Founder Shares has been effected by way of a stock split,
stock dividend, reverse stock split, contribution back to capital or otherwise, in each case in
connection with such increase or decrease in the size of the Offering, then (i) the references to
2,250,000 in the numerator and denominator of the formula in the immediately preceding sentence
shall be changed to a number equal to 15% of the number of shares included in the Units issued in
the Offering and (ii) the reference to [_____] in the formula set forth in the immediately
preceding sentence shall be adjusted to such number of shares of the Common Stock that the
undersigned would have to return to the Company in order to hold [____]% of the Company’s issued
and outstanding shares after the Offering (assuming the Underwriters do not exercise their
over-allotment option). In addition, a portion of the Founder Shares held by him or her in an
amount equal to [____]% of the Company’s issued and outstanding shares immediately after the
Offering, shall be returned to the Company for cancellation, at no cost, in the event that the last
sales price of the Company’s stock does not equal or exceed $12.00 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within any 30-trading day period within twenty-four (24) months following the closing of the
Company’s initial Business Combination.
(c) The undersigned acknowledges that he or she has no right, title, interest or claim of any
kind in or to any monies held in the Trust Account or any other asset of the Company as a result of
any liquidation of the Company with respect to the Founder Shares held by him or her. The
undersigned hereby further waives, with respect to any shares of the Common Stock held by
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him or her, any redemption rights he or she may have in connection with the consummation of a
Business Combination, including, without limitation, any such rights available in the context of a
stockholder vote to approve such Business Combination or in the context of a tender offer made by
the Company to purchase shares of the Common Stock (although the undersigned shall be entitled to
redemption and liquidation rights with respect to any shares of the Common Stock (other than the
Founder Shares) he or she holds if the Company fails to consummate a Business Combination within 21
months from the date of the closing of the Offering).
(d) In the case of any of the Founder Shares owned by the undersigned, until (A) one year
after the completion of the Company’s initial Business Combination or earlier if, subsequent to the
Company’s initial Business Combination (such applicable period being the “Founder Lock-Up Period”),
the last sales price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within any 30-trading day period commencing at least 150 days after the Company’s initial Business
Combination or (B) the Company consummates a subsequent liquidation, merger, stock exchange or
other similar transaction which results in all of the Company’s stockholders having the right to
exchange their shares of Common Stock for cash, securities or other property, the undersigned shall
not, except as described in the Prospectus, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated thereunder, with respect to
the Founder Shares owned by him or her, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of any of
the Founder Shares owned by him or her, whether any such transaction is to be settled by delivery
of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any
intention to effect any transaction specified in clause (i) or (ii).
(e) Notwithstanding the provisions contained in 2(d) herein, the undersigned may transfer the
Founder Shares owned by him or her (i) to the Company’s officers or directors, any affiliate or
family member of any of the Company’s officers or directors or any affiliate of the Sponsor or to
any member(s) of the Sponsor; (ii) by gift to a member of the undersigned’s immediate family or to
a trust, the beneficiary of which is a member of the undersigned’s immediate family, an affiliate
of the undersigned or to a charitable organization; (iii) by virtue of the laws of descent and
distribution upon death of the undersigned; (iv) pursuant to a qualified domestic relations order;
(v) by virtue of the laws of the state of Delaware or the Sponsor’s limited liability company
agreement upon dissolution of the Sponsor; (vi) in the event of the Company’s liquidation prior to
the completion of the Company’s initial Business Combination; or (vii) in the event that,
subsequent to the consummation of the Company’s initial Business Combination, the Company
consummates a merger, stock exchange or other similar transaction that results in all of its
stockholders having the right to exchange their shares of the Common Stock for cash, securities or
other property; provided, however, that, in the case of clauses (i) through (iv), these permitted
transferees enter into a written agreement with the Company agreeing to be bound by the transfer
restrictions in (f) herein.
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(f) Further, the undersigned agrees that after the Founder Lock-Up Period has elapsed, the
Founder Shares owned by him or her shall only be transferable or saleable pursuant to a sale
registered under the Securities Act or pursuant to an available exemption from registration under
the Securities Act. The Company and the undersigned each acknowledge that pursuant to that certain
registration rights agreement to be entered into between the Company, the Members and the Sponsor,
each of the Members and the Sponsor may request that a registration statement relating to the
Founder Shares be filed with the Commission prior to the end of the Founder Lock-Up Period;
provided, however, that such registration statement does not become effective prior to the end of
the Founder Lock-Up Period.
(g) Each of the Company and the undersigned understand and agree that the transfer
restrictions set forth in 2(d) herein shall supersede any and all transfer restrictions relating to
the Founder Shares set forth in that certain Securities Purchase Agreement, effective as of August
5, 2010, by and between the Company and the Sponsor.
3. The undersigned’s biographical information furnished to the Company and attached here as
Exhibit A is true and accurate in all respects and does not omit any material information with
respect to the undersigned’s background. The undersigned’s questionnaire furnished to the Company
and attached hereto as Exhibit B is true and accurate in all respects. The undersigned represents
and warrants that:
(a) the undersigned is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act or practice
relating to the offering of securities in any jurisdiction;
(b) the undersigned has never been convicted of, or pleaded guilty to, any crime (i) involving
fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii)
pertaining to any dealings in any securities and the undersigned is not currently a defendant in
any such criminal proceeding; and
(c) the undersigned has never been suspended or expelled from membership in any securities or
commodities exchange or association or had a securities or commodities license or registration
denied, suspended or revoked.
4. Except as disclosed in the Prospectus, neither the undersigned nor any affiliate of the
undersigned, shall receive any finder’s fee, reimbursement, consulting fee, monies in respect of
any repayment of a loan or other compensation prior to, or in connection with any services rendered
in order to effectuate the consummation of the Company’s initial Business Combination (regardless
of the type of transaction that it is), other than the following:
(a) repayment of a $25,000 loan made to the Company by Xxxxxx, pursuant to a Promissory Note
dated August 5, 2010;
(b) payment of an aggregate of $5,000 per month to Childs, for office space, secretarial and
administrative services, pursuant to an Administrative Support Agreement, dated August 5, 2010;
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(c) reimbursement for any reasonable out-of-pocket expenses related to identifying,
investigating and consummating an initial Business Combination, so long as no proceeds of the
Offering held in the Trust Account may be applied to the payment of such expenses prior to the
consummation of a Business Combination, except that the Company may, for purposes of funding its
working capital requirements (including paying such expenses), receive from the Trust Account up to
$2,250,000 in interest income (net of franchise and income taxes payable), in the event the
underwriters’ over-allotment option in the Offering is not exercised in full, or $2,587,500 in
interest income (net of franchise and income taxes payable), if the underwriters’ over-allotment
option in the Offering is exercised in full (or, if the over-allotment option is not exercised in
full, but is exercised in part, the amount in interest income (net of franchise and income taxes
payable) to be released shall be increased proportionally in relation to the proportion of the
over-allotment option which was exercised); and
(d) repayment of loans, if any, and on such terms as to be determined by the Company from time
to time, made by the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers
and directors to finance transaction costs in connection with an intended initial Business
Combination, provided, that, if the Company does not consummate an initial Business Combination, a
portion of the working capital held outside the Trust Account may be used by the Company to repay
such loaned amounts so long as no proceeds from the Trust Account are used for such repayment;
provided, however, that the Company may, for purposes of funding its working capital requirements
(including repaying such loans), receive from the Trust Account up to $2,250,000 in interest income
(net of taxes payable on such interest), in the event the underwriters’ over-allotment option in
the Offering is not exercised in full, or $2,587,500 in interest income (net of taxes payable on
such interest), if the underwriters’ over-allotment option in the Offering is exercised in full
(or, if the over-allotment option is not exercised in full, but is exercised in part, the amount in
interest income (net of taxes payable on such interest) to be released shall be increased
proportionally in relation to the proportion of the over-allotment option which was exercised).
5. The undersigned has full right and power, without violating any agreement to which he or
she is bound (including, without limitation, any non-competition or non-solicitation agreement with
any employer or former employer), to enter into this Letter Agreement and to serve as an officer of
the Company or as a director on the board of directors of the Company, as applicable, and hereby
consents to being named in the Prospectus as an officer and/or as a director of the Company, as
applicable.
6. As used in this Letter Agreement, (i) “Business Combination” shall mean a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination,
involving the Company and one or more businesses; (ii) “Founder Shares” shall mean the 2,464,286
shares of the Common Stock of the Company acquired by the Sponsor for an aggregate purchase price
of $25,000, or approximately $0.0101 per share , prior to the consummation of the Offering; (iii)
“Public Stockholders” shall mean the holders of securities issued in the Offering; and (iv) “Trust
Account” shall mean the trust fund into which a portion of the net proceeds of the Offering will be
deposited.
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7. This Letter Agreement, and the exhibits thereto, constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and supersede all prior
understandings, agreements, or representations by or among the parties hereto, written or oral, to
the extent they relate in any way to the subject matter hereof or the transactions contemplated
hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to
correct a typographical error) as to any particular provision, except by a written instrument
executed by the parties hereto.
8. Neither party may assign either this Letter Agreement or any of its rights, interests, or
obligations hereunder without the prior written consent of the other party. Any purported
assignment in violation of this paragraph shall be void and ineffectual and shall not operate to
transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be
binding on the undersigned and each of his or her heirs, personal representatives and assigns.
9. This Letter Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction. The parities hereto (i)
agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this
Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New
York, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall be
exclusive and (ii) waives any objection to such exclusive jurisdiction and venue or that such
courts represent an inconvenient forum.
10. Any notice, consent or request to be given in connection with any of the terms or
provisions of this Letter Agreement shall be in writing and shall be sent by express mail or
similar private courier service, by certified mail (return receipt requested), by hand delivery or
facsimile transmission.
11. This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder
Lock-up Period, or (ii) the liquidation of the Company; provided, however, that this Letter
Agreement shall earlier terminate in the event that the Offering is not consummated and closed by
[December 31, 2010].
[Signature page follows]
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| Sincerely, |
||||
| By: | ||||
| Name: | ||||
| Undersigned | ||||
| Acknowledged and Agreed: JWC ACQUISITION CORP. |
||||
| By: | ||||
| Xxxx X. Xxxxxx | ||||
| President | ||||
Exhibit A
(Attached)
Exhibit B
(Attached)
