EXHIBIT 1.1
UNDERWRITING AGREEMENT
BETWEEN
GENEVA ACQUISITION CORPORATION
AND
LAZARD CAPITAL MARKETS LLC
DATED: ____________, 2007
GENEVA ACQUISITION CORPORATION
UNDERWRITING AGREEMENT
New York, New York
____________, 2007
Lazard Capital Markets LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
The undersigned, Geneva Acquisition Corporation, a Delaware corporation
("Company"), hereby confirms its agreement with Lazard Capital Markets LLC
(being referred to herein variously as "you," "LCM" or the "Representative") and
with the other underwriters named on Schedule I hereto for which LCM is acting
as Representative (the Representative and the other Underwriters being
collectively called the "Underwriters" or, individually, an "Underwriter") as
follows:
1. PURCHASE AND SALE OF SECURITIES.
1.1 FIRM SECURITIES.
1.1.1 PURCHASE OF FIRM UNITS. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell, severally and not jointly, to
the several Underwriters, an aggregate of 10,000,000 units ("Firm Units") of the
Company, at a purchase price (net of discounts and commissions) of $5.58 per
Firm Unit (including discounts and commissions of $0.18 that will not be paid
to the Underwriters unless and until a Business Combination (as defined below)
has been consummated by the Company). The Underwriters, severally and not
jointly, agree that they will not seek payment of the discounts and commissions
of $0.18 referred to in the preceding sentence unless and until a Business
Combination has been consummated by the Company, and the Company agrees that it
shall pay such discounts and commissions only upon consummation of such Business
Combination. The Underwriters, severally and not jointly, agree to purchase from
the Company the number of Firm Units set forth opposite their respective names
on Schedule I attached hereto and made a part hereof at a purchase price (net of
discounts and commissions) of $5.58 per Firm Unit. The Firm Units are to be
offered initially to the public ("Offering") at the offering price of $6.00 per
Firm Unit. Each Firm Unit consists of one share of the Company's common stock,
par value $.0001 per share ("Common Stock"), and two warrants ("Warrant(s)").
The shares of Common Stock and the Warrants included in the Firm Units will not
be separately transferable until 90 days after the effective date ("Effective
Date") of the Registration Statement (as defined in Section 2.1.1 hereof) unless
LCM informs the Company of its decision to allow earlier separate trading, but
in no event will LCM allow separate trading until the preparation of an audited
balance sheet of the Company reflecting receipt by the Company of the proceeds
of the Offering and the filing of a Current Report on Form 8-K with the
Securities and Exchange Commission (the "Commission") by the Company which
includes such balance sheet. Each Warrant entitles its holder to exercise it to
purchase one share of Common Stock for $5.00 during the period commencing on the
later of the consummation by the Company of its "Business Combination" or one
year from the Effective Date and terminating on the four-year anniversary of the
Effective Date. "Business Combination" shall mean any merger, capital stock
exchange, asset acquisition or other similar business combination consummated by
the Company with an operating business (as described more fully in the
Registration Statement).
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1.1.2 PAYMENT AND DELIVERY. Delivery and payment for the Firm Units shall
be made at 10:00 A.M., New York time, on the third business day following
commencement of trading of the Firm Units or at such earlier time as shall be
agreed upon by the Representative and the Company at the offices of the
Representative or at such other place as shall be agreed upon by the
Representative and the Company. The hour and date of delivery and payment for
the Firm Units are called "Closing Date." Payment for the Firm Units shall be
made on the Closing Date at the Representative's election by wire transfer in
Federal (same day) funds or by certified or bank cashier's check(s) in New York
Clearing House funds, payable as follows: $56,900,000 of the proceeds received
by the Company for the Firm Units shall be deposited in the trust fund
established by the Company for the benefit of the public stockholders as
described in the Registration Statement ("Trust Fund") pursuant to the terms of
an Investment Management Trust Agreement ("Trust Agreement") and the remaining
proceeds shall be paid (subject to Section 3.13 hereof) to the order of the
Company upon delivery to you of certificates (in form and substance satisfactory
to the Underwriters) representing the Firm Units (or through the facilities of
The Depository Trust Company ("DTC")) for the account of the Underwriters. The
Firm Units shall be registered in such name or names and in such authorized
denominations as the Representative may request in writing at least two full
business days prior to the Closing Date. The Company will permit the
Representative to examine and package the Firm Units for delivery at least one
full business day prior to the Closing Date. The Company shall not be obligated
to sell or deliver the Firm Units except upon tender of payment by the
Representative for all the Firm Units.
1.2 OVER-ALLOTMENT OPTION.
1.2.1 OPTION UNITS. For the purposes of covering any over-allotments
in connection with the distribution and sale of the Firm Units, the Underwriters
are hereby granted, severally and not jointly, an option to purchase up to an
additional 1,500,000 units from the Company ("Over-allotment Option"). Such
additional 1,500,000 units are hereinafter referred to as "Option Units." The
Firm Units and the Option Units are hereinafter collectively referred to as the
"Units," and the Units, the 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 referred to collectively as the "Public Securities." The
purchase price to be paid for the Option Units will be the same price per Option
Unit as the price per Firm Unit set forth in Section 1.1.1 hereof.
1.2.2 EXERCISE OF OPTION. The Over-allotment Option granted pursuant
to Section 1.2.1 hereof may be exercised by the Representative as to all (at any
time) or any part (from time to time) of the Option Units within 45 days after
the Effective Date. The Underwriters will not be under any obligation to
purchase any Option Units prior to the exercise of the Over-allotment Option.
The Over-allotment Option granted hereby may be exercised by the giving of oral
notice to the Company by the Representative, which must be confirmed in writing
by overnight mail or facsimile transmission setting forth the number of Option
Units to be purchased and the date and time for delivery of and payment for the
Option Units (the "Option Closing Date"), which will not be later than five full
business days after the date of the notice or such other time as shall be agreed
upon by the Company and the Representative, at the offices of the Representative
or at such other place as shall be agreed upon by the Company and the
Representative. Upon exercise of the Over-allotment Option, the Company will
become obligated to convey to the Underwriters, and, subject to the terms and
conditions set forth herein, the Underwriters will become obligated to purchase,
the number of Option Units specified in such notice.
1.2.3 PAYMENT AND DELIVERY. Payment for the Option Units shall be made
on the Option Closing Date at the Representative's election by wire transfer in
Federal (same day) funds or by certified or bank cashier's check(s) in New York
Clearing House funds, payable as follows: $5.76 per Option Unit shall be
deposited in the Trust Fund pursuant to the Trust Agreement upon delivery to you
of certificates (in form and substance satisfactory to the Underwriters)
representing the Option Units (or through the facilities of DTC) for the account
of the Underwriters. The certificates representing the Option Units to be
delivered will be in such denominations and registered in such names as the
Representative requests not less than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be, and will be made
available to the Representative for inspection, checking and packaging at the
aforesaid office of the Company's transfer agent or correspondent not less than
one full business day prior to such Closing Date.
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1.3 REPRESENTATIVE'S PURCHASE OPTION.
1.3.1 PURCHASE OPTION. The Company hereby agrees to issue and sell to
the Representative (and/or its designees) on the Effective Date an option
("Representative's Purchase Option") for the purchase of an aggregate of 700,000
units ("Representative's Units") for an aggregate purchase price of $100. Each
of the Representative's Units is identical to the Firm Units. The
Representative's Purchase Option shall be exercisable, in whole or in part,
commencing on the later of the consummation of a Business Combination and one
year from the Effective Date and expiring on the five-year anniversary of the
Effective Date at an initial exercise price per Representative's Unit of $8.50
(142% of the initial public offering price of a Unit). The Representative's
Purchase Option, the Representative's Units, the Warrants included in the
Representative's Units ("Representative's Warrants") and the shares of Common
Stock issuable upon exercise of the Representative's Warrants are hereinafter
referred to collectively as the "Representative's Securities." The Public
Securities and the Representative's Securities are hereinafter referred to
collectively as the "Securities." The Representative understands and agrees that
there are significant restrictions against transferring the Representative's
Purchase Option during the first year after the Effective Date, as set forth in
Section 3 of the Representative's Purchase Option.
1.3.2 PAYMENT AND DELIVERY. Delivery and payment for the
Representative's Purchase Option shall be made on the Closing Date. The Company
shall deliver to the Representative, upon payment therefor, certificates for the
Representative's Purchase Option in the name or names and in such authorized
denominations as the Representative may request.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Underwriters as follows:
2.1 FILING OF REGISTRATION STATEMENT.
2.1.1 PURSUANT TO THE ACT. The Company has filed with the Commission a
registration statement and an amendment or amendments thereto, on Form S-1 (File
No. 333-135419), for the registration of the Public Securities under the
Securities Act of 1933, as amended ("Act"), which registration statement and
amendment or amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations ("Regulations") of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time the
registration statement becomes effective (including the prospectus, the
preliminary prospectus, financial statements, schedules, exhibits and all other
documents filed as a part thereof or incorporated therein and all information
deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule
430A of the Regulations), is hereinafter called the "Registration Statement,"
the preliminary prospectus included in the Registration Statement immediately
prior to the time that the Registration Statement became effective is
hereinafter called the "Preliminary Prospectus" and the form of the final
prospectus dated the Effective Date included in the Registration Statement (or,
if applicable, the form of final prospectus filed with the Commission pursuant
to Rule 424 of the Regulations), is hereinafter called the "Prospectus." The
Registration Statement has been declared effective by the Commission on the date
hereof.
2.1.2 PURSUANT TO THE EXCHANGE ACT. The Company has filed with the
Commission a Form 8-A (File Number 001-33247) providing for the registration
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), of the
Units, the Common Stock and the Warrants. The registration of the Units, Common
Stock and Warrants under the Exchange Act has been declared effective by the
Commission on the date hereof.
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2.2 NO STOP ORDERS, ETC. Neither the Commission nor, to the best of the
Company's knowledge, any state regulatory authority has issued any order or
threatened to issue any order preventing or suspending the use of any Prospectus
or Preliminary Prospectus or has instituted or, to the best of the Company's
knowledge, threatened to institute any proceedings with respect to such an
order.
2.3 DISCLOSURES IN REGISTRATION STATEMENT.
2.3.1 10b-5 REPRESENTATION. As of the Applicable Time (as defined
below) and as of the Closing Date and the Option Closing Date and the
Preliminary Prospectus included or will include, any untrue statement of a
material fact or omitted or as of the Closing Date or the Option Closing Date
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. At the time the Registration Statement became effective, at the date
of this Agreement and at the Closing Date and the Option Closing Date, the
Registration Statement conformed and will conform in all material respects to
the requirements of the Act and the Regulations and did not and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; the Prospectus, at the time the Prospectus was issued and at the
Closing Date and the Option Closing Date, conformed and will conform in all
material respects to the requirements of the Act and the Regulations and did not
and will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The representation and
warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with information furnished
to the Company with respect to the Underwriters by the Representative expressly
for use in the Registration Statement or Prospectus or any amendment thereof or
supplement thereto.
As used in this Agreement, "Applicable Time" means [ ] P.M., New York
time, on the date of this Agreement.
2.3.2 DISCLOSURE OF AGREEMENTS. The agreements and documents described
in the Registration Statement, the Preliminary Prospectus and the Prospectus
conform to the descriptions thereof contained therein and there are no
agreements or other documents required to be described in the Registration
Statement, the Preliminary Prospectus or the Prospectus or to be filed with the
Commission as exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property or business
is or may be bound or affected and (i) that is referred to in the Prospectus or
the Preliminary Prospectus, or (ii) is material to the Company's business, has
been duly and validly executed by the Company, is in full force and effect and
is enforceable against the Company and, to the Company's knowledge, the other
parties thereto, in accordance with its terms, except (x) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the federal and
state securities laws, and (z) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and none of such agreements or instruments has been assigned by
the Company, and neither the Company nor, to the best of the Company's
knowledge, any other party is in breach or default thereunder and, to the best
of the Company's knowledge, no event has occurred that, with the lapse of time
or the giving of notice, or both, would constitute a breach or default
thereunder. To the best of the Company's knowledge, performance by the Company
of the material provisions of such agreements or instruments will not result in
a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including,
without limitation, those relating to environmental laws and regulations.
2.3.3 PRIOR SECURITIES TRANSACTIONS. No securities of the Company have
been sold by the Company or by or on behalf of, or for the benefit of, any
person or persons controlling, controlled by, or under common control with the
Company since the Company's formation, except as disclosed in the Registration
Statement, the Preliminary Prospectus and the Prospectus.
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2.3.4 REGULATIONS. The disclosures in the Registration Statement, the
Preliminary Prospectus and the Prospectus concerning the effects of Federal,
State and local regulation on the Company's business as currently contemplated
are correct in all material respects and do not omit to state a material fact.
2.4 CHANGES AFTER DATES IN REGISTRATION STATEMENT.
2.4.1 NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement, the Preliminary
Prospectus and the Prospectus, except as otherwise specifically stated therein,
(i) there has been no material adverse change in the condition, financial or
otherwise, or business prospects of the Company, (ii) there have been no
material transactions entered into by the Company, other than as contemplated
pursuant to this Agreement, and (iii) no member of the Company's management has
resigned from any position with the Company.
2.4.2 RECENT SECURITIES TRANSACTIONS, ETC. Subsequent to the
respective dates as of which information is given in the Registration Statement,
the Preliminary Prospectus and the Prospectus, and except as may otherwise be
indicated or contemplated herein or therein, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its equity securities.
2.5 INDEPENDENT ACCOUNTANTS. Xxxxxxxxx Xxxxx Xxxxxxx LLP ("GGK"), whose
report is filed with the Commission as part of the Registration Statement, are
independent accountants as required by the Act and the Regulations. GGK has not,
during the periods covered by the financial statements included in the
Preliminary Prospectus and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act.
2.6 FINANCIAL STATEMENTS. The financial statements, including the notes
thereto and supporting schedules included in the Registration Statement, the
Preliminary Prospectus and the Prospectus fairly present the financial position,
the results of operations and the cash flows of the Company at the dates and for
the periods to which they apply; and such financial statements have been
prepared in conformity with United States generally accepted accounting
principles, consistently applied throughout the periods involved; and the
supporting schedules included in the Registration Statement, the Preliminary
Prospectus and the Prospectus present fairly the information required to be
stated therein. The summary financial data included in the Registration
Statement, the Preliminary Prospectus and the Prospectus present fairly the
information shown thereon and have been compiled on a basis consistent with the
audited financial statements presented therein. No other financial statements or
schedules are required to be included in the Registration Statement, the
Preliminary Prospectus or the Prospectus. The Registration Statement, the
Preliminary Prospectus and the Prospectus disclose all material off-balance
sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with unconsolidated
entities or other persons that may have a material current or future effect on
the Company's financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses.
2.7 AUTHORIZED CAPITAL; OPTIONS; ETC. The Company had at the date or dates
indicated in the Preliminary Prospectus and the Prospectus duly authorized,
issued and outstanding capitalization as set forth in the Registration
Statement, the Preliminary Prospectus and the Prospectus. Based on the
assumptions stated in the Registration Statement, the Preliminary Prospectus and
the Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or contemplated by,
the Registration Statement, the Preliminary Prospectus and the Prospectus, on
the Effective Date and on the Closing Date, there will be no options, warrants,
or other rights to purchase or otherwise acquire any authorized but unissued
shares of Common Stock of the Company or any security convertible into shares of
Common Stock of the Company, or any contracts or commitments to issue or sell
shares of Common Stock or any such options, warrants, rights or convertible
securities.
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2.8 VALID ISSUANCE OF SECURITIES; ETC.
2.8.1 OUTSTANDING SECURITIES. All issued and outstanding securities of
the Company have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The authorized Common Stock conforms to all
statements relating thereto contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus. The offers and sales of the
outstanding Common Stock were at all relevant times either registered under the
Act and the applicable state securities or Blue Sky laws or are exempt from such
registration requirements.
2.8.2 SECURITIES SOLD PURSUANT TO THIS AGREEMENT. The Securities have
been duly authorized and, when issued and paid for in accordance with this
Agreement, will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by reason of being
such holders; the Securities are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken for
the authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements with
respect thereto contained in the Registration Statement, the Preliminary
Prospectus and the Prospectus. When issued, the Representative's Purchase
Option, the Representative's Warrants and the Warrants will constitute valid and
binding obligations of the Company to issue and sell, upon exercise thereof and
payment of the respective exercise prices therefor, the number and type of
securities of the Company called for thereby in accordance with the terms
thereof and such Representative's Purchase Option, the Representative's Warrants
and the Warrants are enforceable against the Company in accordance with their
respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.8.3 INSIDER WARRANTS. Certain of the Company's stockholders
("Insider Purchasers") immediately prior to the Offering (collectively referred
to as the "Initial Stockholders") have committed to purchase an aggregate of
2,923,077 Warrants ("Insider Warrants" and together with the shares of Common
Stock underlying the Insider Warrants, collectively referred to as the "Insider
Securities") at $0.65 per Warrant (for an aggregate purchase price of
$1,900,000) from the Company upon consummation of the Offering. The Insider
Securities have been duly authorized and, when issued and paid for in accordance
with the Warrant Purchase Agreements ("Warrant Purchase Agreements") and the
Insider Warrants, will be validly issued, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal liability by reason
of being such holders; the Insider Securities are not and will not be subject to
the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to
be taken for the authorization, issuance and sale of the Insider Securities has
been duly and validly taken.
2.9 REGISTRATION RIGHTS OF THIRD PARTIES. Except as set forth in the
Registration Statement, the Preliminary Prospectus and the Prospectus, no
holders of any securities of the Company or any rights exercisable for or
convertible or exchangeable into securities of the Company have the right to
require the Company to register any such securities of the Company under the Act
or to include any such securities in a registration statement to be filed by the
Company.
2.10 VALIDITY AND BINDING EFFECT OF AGREEMENTS. This Agreement, the Warrant
Agreement (as defined in Section 2.21 hereof), the Trust Agreement, the Services
Agreement (as defined in Section 2.29 hereof), the Warrant Purchase Agreements,
the Escrow Agreements (as defined in Section 2.22.2 hereof), the Registration
Rights Agreement (as defined in Section 2.22.3 hereof) and the Representative's
Purchase Option
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have been duly and validly authorized by the Company and, when executed and
delivered, will 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 the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
2.11 NO CONFLICTS, ETC. The execution, delivery, and performance by the
Company of this Agreement, the Warrant Agreement, the Representative's Purchase
Option, the Trust Agreement, the Services Agreement, the Warrant Purchase
Agreements and the Escrow Agreements, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement referred to in Section 2.24 hereof; (ii) result
in any violation of the provisions of the Certificate of Incorporation or the
Bylaws of the Company; or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
2.12 NO DEFAULTS; VIOLATIONS. No material default exists in the due
performance and observance of any term, covenant or condition of any material
license, contract, indenture, mortgage, deed of trust, note, loan or credit
agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not in violation
of any term or provision of its Certificate of Incorporation or Bylaws or in
violation of any material franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
businesses.
2.13 CORPORATE POWER; LICENSES; CONSENTS.
2.13.1 CONDUCT OF BUSINESS. The Company has all requisite corporate
power and authority, and has all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement, the Preliminary Prospectus
and the Prospectus. The disclosures in the Registration Statement, the
Preliminary Prospectus and the Prospectus concerning the effects of federal,
state and local regulation on this offering and the Company's business purpose
as currently contemplated are correct in all material respects and do not omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
2.13.2 TRANSACTIONS CONTEMPLATED HEREIN. The Company has all corporate
power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders
required in connection therewith have been obtained. No consent, authorization
or order of, and no filing with, any court, government agency or other body is
required for the valid issuance, sale and delivery, of the Securities and the
consummation of the transactions and agreements contemplated by this Agreement,
the Warrant Agreement, the Representative's Purchase Option, the Trust Agreement
and the Escrow Agreements and as contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus, except with respect to applicable
federal and state securities laws.
2.14 D&O QUESTIONNAIRES. To the best of the Company's knowledge, all
information contained in the questionnaires ("Questionnaires") completed by each
of the Initial Stockholders and provided to the Underwriters as an exhibit to
his, her or its Insider Letter (as defined in Section 2.22.1) is true and
correct
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and the Company has not become aware of any information which would cause the
information disclosed in the questionnaires completed by each Initial
Stockholder to become inaccurate and incorrect.
2.15 LITIGATION; GOVERNMENTAL PROCEEDINGS. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the best of the Company's knowledge, threatened
against, or involving the Company or, to the best of the Company's knowledge,
any Initial Stockholder, which has not been disclosed, that is required to be
disclosed, in the Registration Statement, the Preliminary Prospectus and the
Prospectus or the Questionnaires.
2.16 GOOD STANDING. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its state of
incorporation, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification, except where
the failure to qualify would not have a material adverse effect on the assets,
business or operations of the Company.
2.17 STOP ORDERS. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or any part
thereof and has not threatened to issue any such order.
2.18 TRANSACTIONS AFFECTING DISCLOSURE TO NASD.
2.18.1 FINDER'S FEES. Except as described in the Registration
Statement, the Preliminary Prospectus 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. ("NASD").
2.18.2 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 LCM.
2.18.3 USE OF PROCEEDS. None of the net proceeds of the 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 Registration Statement, the
Preliminary Prospectus and the Prospectus.
2.18.4 INSIDERS' NASD AFFILIATION. Based on the Questionnaires, except
as set forth on Schedule 2.18.4, 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. The Company will advise the Representative and
its counsel if it learns that any officer, director or beneficial owner of at
least 5% of the Company's outstanding Common Stock is or becomes an affiliate or
associated person of an NASD member.
2.19 FOREIGN CORRUPT PRACTICES ACT. Neither the Company nor any of the
Initial Stockholders or any other person acting on behalf of the Company has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or 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
8
adverse effect on the assets, business or operations of the Company as reflected
in any of the financial statements contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus or (iii) if not continued in the
future, might adversely affect the assets, business, operations or prospects of
the Company. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply with the Foreign Corrupt Practices Act
of 1977, as amended.
2.20. OFFICERS' CERTIFICATE. Any certificate signed by any duly authorized
officer of the Company and delivered to you or to your counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.21 WARRANT AGREEMENT. The Company has entered into a warrant agreement
with respect to the Warrants, the Insider Warrants and the Representative's
Warrants with Continental Stock Transfer & Trust Company substantially in the
form annexed as Exhibit 4.5 to the Registration Statement ("Warrant Agreement").
2.22 AGREEMENTS WITH INITIAL STOCKHOLDERS.
2.22.1 INSIDER LETTERS. The Company has caused to be duly executed legally
binding and enforceable agreements (except (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification,
contribution or noncompete provision may be limited under the federal and state
securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought) annexed as Exhibits 10.1 through 10.7 to the Registration
Statement ("Insider Letters"), pursuant to which each of the Initial
Stockholders of the Company agrees to certain matters, including but not limited
to, certain matters described as being agreed to by them under the "Proposed
Business" section of the Preliminary Prospectus and the Prospectus.
2.22.2 ESCROW AGREEMENTS.
(i) The Company and the Initial Stockholders have entered into
an escrow agreement ("Initial Share Escrow Agreement") with Continental Stock
Transfer & Trust Company ("Escrow Agent") substantially in the form annexed as
Exhibit 10.10 to the Registration Statement, whereby the Common Stock owned by
the Initial Stockholders will be held in escrow by the Escrow Agent, until six
months after the consummation of a Business Combination. During such escrow
period, the Initial Stockholders shall be prohibited from selling or otherwise
transferring such shares (except to spouses and children of Initial Stockholders
and trusts established for their benefit and as otherwise set forth in the
Escrow Agreement) but will retain the right to vote such shares. To the
Company's knowledge, the Escrow Agreement is enforceable against each of the
Initial Stockholders and will not, with or without the giving of notice or the
lapse of time or both, result in a breach of, or conflict with any of the terms
and provisions of, or constitute a default under, any agreement or instrument to
which any of the Initial Stockholders is a party. The Escrow Agreement shall not
be amended, modified or otherwise changed without the prior written consent of
LCM.
(ii) The Company and the Insider Purchasers have entered into
an escrow agreement ("Insider Warrant Escrow Agreement" and together with the
Initial Share Escrow Agreement, the "Escrow Agreements") with Continental Stock
Transfer & Trust Company ("Escrow Agent") substantially in the form annexed as
Exhibit 10.9 to the Registration Statement, whereby the Insider Warrants owned
by the Insider Purchasers will be held in escrow by the Escrow Agent, until 30
days after the consummation of a Business Combination. During such escrow
period, the Insider Purchasers shall be prohibited from selling or otherwise
transferring such Insider Warrants (except for certain exceptions set forth in
the Escrow Agreement). To the Company's knowledge, the Escrow Agreement is
enforceable against the Insider Purchasers and will not, with or without the
giving of notice or the lapse of time or both, result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which the Insider
9
Purchasers is a party. The Insider Warrant Escrow Agreement shall not be
amended, modified or otherwise changed without the prior written consent of LCM.
2.22.3 REGISTRATION RIGHTS AGREEMENT. The Company and the Initial
Stockholders have entered into a registration rights agreement ("Registration
Rights Agreement") substantially in the form annexed as Exhibit 10.13 to the
Registration Statement, whereby the Initial Stockholders will be entitled to
certain registration rights as set forth in such Registration Rights Agreement
and described more fully in the Registration Statement, the Preliminary
Prospectus and the Prospectus.
2.22.4 WARRANT PURCHASE AGREEMENTS. The Company has entered into the
Warrant Purchase Agreements substantially in the form annexed as Exhibit 10.14
to the Registration Statement with the Insider Purchasers to purchase the
Insider Warrants. Pursuant to the Warrant Purchase Agreements, the Insider
Purchasers has placed the purchase price for the Insider Warrants in escrow
prior to the date hereof. Simultaneously with the consummation of the Offering,
such purchase price shall be deposited into the Trust Fund pursuant to the Trust
Agreement.
2.23 INTENTIONALLY OMITTED.
2.24 INVESTMENT MANAGEMENT TRUST AGREEMENT. The Company has entered into
the Trust Agreement with respect to certain proceeds of the Offering
substantially in the form annexed as Exhibit 10.8 to the Registration Statement.
2.25 COVENANTS NOT TO COMPETE. No Initial Stockholder, employee, officer or
director of the Company is subject to any noncompetition agreement or
non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be an Initial Stockholder, employee, officer
and/or director of the Company.
2.26 INVESTMENT COMPANY ACT; INVESTMENTS. The Company has been advised
concerning the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and the rules and regulations thereunder and has in the past
conducted, and intends in the future to conduct, its affairs in such a manner as
to ensure that it will not become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act and such rules and regulations. The Company is not, nor will the
Company become upon the sale of the Units and the application of the proceeds
therefore as described in the Preliminary Prospectus and the Prospectus under
the caption "Use of Proceeds", an "investment company" or a person controlled by
an "investment company" within the meaning of the Investment Company Act. No
more than 45% of the "value" (as defined in Section 2(a)(41) of the Investment
Company Act) of the Company's total assets (exclusive of cash items and
"Government Securities" (as defined in Section 2(a)(16) of the Investment
Company Act) consist of, and no more than 45% of the Company's net income after
taxes is derived from, securities other than the Government Securities.
2.27 SUBSIDIARIES. The Company does not own an interest in any corporation,
partnership, limited liability company, joint venture, trust or other business
entity.
2.28 RELATED PARTY TRANSACTIONS. There are no business relationships or
related party transactions involving the Company or any other person required to
be described in the Preliminary Prospectus and the Prospectus that have not been
described as required.
2.29 ADMINISTRATIVE SERVICES. The Company has entered into an agreement
("Services Agreement") with NEGF Advisory Company Inc. ("Affiliate")
substantially in the form annexed as Exhibit 10.13 to the Registration Statement
pursuant to which the Affiliate will make available to the Company general and
administrative services including office space, utilities and secretarial
support for the Company's use for $7,500 per month.
10
2.30 LOANS. Danbury Management Company, LLC and members of the Company's
management team have made loans to the Company in the aggregate amount of
$127,000 (the "Insider Loans") substantially in the form annexed as Exhibit
10.15 to the Registration Statement. The Insider Loans do not bear any interest
and are repayable by the Company on the earlier to occur of (i) May 31, 2007 or
(ii) the date on which the Company consummates an initial public offering of its
securities.
2.31 AMERICAN STOCK EXCHANGE ELIGIBILITY. As of the Effective Date, the
Public Securities have been approved for listing on the American Stock Exchange
("AMEX"). There is and has been no failure on the part of the Company or any of
the Company's directors or officers, in their capacities as such, to comply with
(as and when applicable), and immediately following the effectiveness of the
Registration Statement the Company will be in compliance with, Part 8 of the
American Stock Exchange's Company Guide, as amended.
3. COVENANTS OF THE COMPANY. The Company covenants and agrees as follows:
3.1 AMENDMENTS TO REGISTRATION STATEMENT. The Company will deliver to the
Representative, prior to filing, any amendment or supplement to the Registration
Statement or Prospectus proposed to be filed after the Effective Date and not
file any such amendment or supplement to which the Representative shall
reasonably object in writing.
3.2 FEDERAL SECURITIES LAWS.
3.2.1 COMPLIANCE. During the time when a Prospectus is required to be
delivered under the Act, the Company will use all reasonable efforts to comply
with all requirements imposed upon it by the Act, the Regulations and the
Exchange Act and by the regulations under the Exchange Act, as from time to time
in force, so far as necessary to permit the continuance of sales of or dealings
in the Public Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a Prospectus relating to the Public Securities
is required to be delivered under the Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for the
Underwriters, the Prospectus, as then amended or supplemented, includes an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify the Representative promptly and prepare and file with the
Commission, subject to Section 3.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
3.2.2 FILING OF FINAL PROSPECTUS. The Company will file the Prospectus
(in form and substance satisfactory to the Representative) with the Commission
pursuant to the requirements of Rule 424 of the Regulations.
3.2.3 EXCHANGE ACT REGISTRATION. The Company will use its best efforts
to maintain the registration of the Units, Common Stock and Warrants under the
provisions of the Exchange Act for a period of five years from the Effective
Date, or until the Company is required to be liquidated if earlier, or, in the
case of the Warrants, until the Warrants expire and are no longer exercisable.
The Company will not deregister the Units under the Exchange Act without the
prior written consent of LCM.
3.2.4 INELIGIBLE ISSUER. At the time of filing the Registration
Statement and at the date hereof, the Company was and is an "ineligible issuer,"
as defined in Rule 405 under the Securities Act. The Company has not made and
will not make any offer relating to the Public Securities that would constitute
an "issuer free writing prospectus," as defined in Rule 433, or that would
otherwise constitute a "free writing prospectus," as defined in Rule 405.
3.3 BLUE SKY FILINGS. The Company will endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Public Securities for offering and
sale under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in
any jurisdiction where, as a result
11
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
3.4 DELIVERY TO UNDERWRITERS OF PROSPECTUSES. The Company will deliver to
each of the several Underwriters, without charge, from time to time during the
period when the Preliminary Prospectus and the Prospectus is required to be
delivered under the Act or the Exchange Act, such number of copies of each
Preliminary Prospectus and the Prospectus as such Underwriters may reasonably
request and, as soon as the Registration Statement or any amendment or
supplement thereto becomes effective, deliver to you two original executed
Registration Statements, including exhibits, and all post-effective amendments
thereto and copies of all exhibits filed therewith or incorporated therein by
reference and all original executed consents of certified experts.
3.5 EFFECTIVENESS AND EVENTS REQUIRING NOTICE TO THE REPRESENTATIVE. The
Company will use its best efforts to cause the Registration Statement to remain
effective and will notify the Representative immediately and confirm the notice
in writing (i) of the effectiveness of the Registration Statement and any
amendment thereto, (ii) of the issuance by the Commission of any stop order or
of the initiation, or the threatening, of any proceeding for that purpose, (iii)
of the issuance by any state securities commission of any proceedings for the
suspension of the qualification of the Public Securities for offering or sale in
any jurisdiction or of the initiation, or the threatening, of any proceeding for
that purpose, (iv) of the mailing and delivery to the Commission for filing of
any amendment or supplement to the Registration Statement or Prospectus, (v) of
the receipt of any comments or request for any additional information from the
Commission, and (vi) of the happening of any event during the period described
in Section 3.4 hereof that, in the judgment of the Company, makes any statement
of a material fact made in the Registration Statement, the Preliminary
Prospectus or the Prospectus untrue or that requires the making of any changes
in the Registration Statement, the Preliminary Prospectus or the Prospectus in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. If the Commission or any state securities
commission shall enter a stop order or suspend such qualification at any time,
the Company will make every reasonable effort to obtain promptly the lifting of
such order.
3.6 REVIEW OF FINANCIAL STATEMENTS. For a period of five years from the
Effective Date, or until such earlier time upon which the Company is required to
be liquidated, the Company, at its expense, shall cause its regularly engaged
independent certified public accountants to review (but not audit) the Company's
financial statements for each of the first three fiscal quarters prior to the
announcement of quarterly financial information, the filing of the Company's
Form 10-Q quarterly report and the mailing of quarterly financial information to
stockholders.
3.7 AFFILIATED TRANSACTIONS.
3.7.1 BUSINESS COMBINATIONS. The Company will not consummate a
Business Combination with any entity which is affiliated with any Initial
Stockholder unless the Company obtains an opinion from an independent investment
banking firm that the Business Combination is fair to the Company's stockholders
from a financial perspective.
3.7.2 INTENTIONALLY OMITTED.
3.7.3 COMPENSATION. Except for payments made pursuant to the Services
Agreement and the repayment of the Insider Loan, the Company shall not pay any
Initial Stockholder or any of their affiliates any fees or compensation, prior
to, or in connection with, the consummation of a Business Combination; provided
further that 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.
12
3.8 SECONDARY MARKET TRADING AND STANDARD & POOR'S. If the Company does not
maintain the listing of the Public Securities on the AMEX or another national
securities exchange, the Company will apply to be included in Standard & Poor's
Daily News and Corporation Records Corporate Descriptions for a period of five
years from the consummation of a Business Combination. Promptly after the
consummation of the Offering, the Company shall take such commercially
reasonable steps as may be necessary to obtain a secondary market trading
exemption for the Company's securities in the State of California. The Company
shall also take such other action as may be reasonably requested by the
Representative to obtain a secondary market trading exemption in such other
states as may be requested by the Representative.
3.9 INTENTIONALLY OMITTED.
3.10 FINANCIAL PUBLIC RELATIONS FIRM. Promptly after the execution of a
definitive agreement for a Business Combination, the Company shall retain a
financial public relations firm reasonably acceptable to the Representative for
a term to be agreed upon by the Company and the Representative.
3.11 REPORTS TO THE REPRESENTATIVE.
3.11.1 PERIODIC REPORTS, ETC. For a period of five years from the
Effective Date or until such earlier time upon which the Company is required
to be liquidated, the Company will furnish to the Representative (Attn:
Xxxxxx Xxxxx) 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 and (v) such additional documents and information with
respect to the Company and the affairs of any future subsidiaries of the
Company as the Representative may from time to time reasonably request.
3.11.2 TRANSFER SHEETS. For a period of five years following the
Effective Date or until such earlier time upon which the Company is required to
be liquidated, the Company shall retain a transfer and warrant agent acceptable
to the Representative ("Transfer Agent") and will furnish to the Underwriters at
the Company's sole cost and expense such transfer sheets of the Company's
securities as the Representative may request, including the daily and monthly
consolidated transfer sheets of the Transfer Agent and DTC. Continental Stock
Transfer & Trust Company is acceptable to the Underwriters.
3.11.3 INTENTIONALLY OMITTED.
3.11.4 INTENTIONALLY OMITTED.
3.12 DISQUALIFICATION OF FORM S-1. Until the earlier of seven years from
the date hereof or until the Warrants have expired and are no longer
exercisable, the Company will not take any action or actions which may prevent
or disqualify the Company's use of Form S-1 (or other appropriate form) for the
registration of the Warrants and the Representative's Warrants under the Act.
3.13 PAYMENT OF EXPENSES.
3.13.1 GENERAL EXPENSES RELATED TO THE OFFERING. The Company hereby
agrees to pay on each of the Closing Date and the Option Closing Date, if any,
to the extent not paid at Closing Date, all expenses incident to the performance
of the obligations of the Company under this Agreement, including but not
limited to (i) the preparation, printing, filing and mailing (including the
payment of postage with respect to such mailing) of the Registration Statement,
the Preliminary and Final Prospectuses and the printing and
13
mailing of this Agreement and related documents, including the cost of all
copies thereof and any amendments thereof or supplements thereto supplied to the
Underwriters in quantities as may be required by the Underwriters, (ii) the
printing, engraving, issuance and delivery of the Units, the shares of Common
Stock and the Warrants included in the Units and the Representative's Purchase
Option, including any transfer or other taxes payable thereon, (iii) if
necessary, the qualification of the Public Securities under state or foreign
securities or Blue Sky laws, (iv) filing fees, costs and expenses (including
fees and disbursements of the Representative's counsel) incurred in registering
the Offering with the NASD, (v) fees and disbursements of the transfer and
warrant agent, (vi) the Company's expenses associated with "due diligence"
meetings arranged by the Representative and (vii) 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
3.13.1. The Company also agrees that, if requested by the Representative, it
will engage and pay up to $25,000 for an investigative search firm of the
Representative's choice to conduct an investigation of the principals of the
Company as shall be mutually selected by the Representative and the Company. The
Representative may deduct from the net proceeds of the Offering payable to the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in this Agreement to be paid by the Company to the Representative and
others. If the Offering contemplated by this Agreement is not consummated for
any reason whatsoever then the Company shall reimburse the Underwriters in full
for their out of pocket expenses, including, without limitation, its legal fees
(up to a maximum of $100,000) and disbursements and "road show" and due
diligence expenses.
3.13.2 INTENTIONALLY OMITTED.
3.13.3 DEFERRED COMPENSATION. Upon the consummation of a Business
Combination, the Company shall pay the Underwriters discounts and commissions of
$0.18 per Unit sold in the Offering. These payments shall be made by wire
transfer to an account designated by the Representative on the closing date of
the Business Combination.
3.14 APPLICATION OF NET PROCEEDS. The Company will apply the net proceeds
from the Offering received by it in a manner consistent with the application
described under the caption "Use Of Proceeds" in the Preliminary Prospectus and
the Prospectus.
3.15 DELIVERY OF EARNINGS STATEMENTS TO SECURITY HOLDERS. The Company will
make generally available to its security holders as soon as practicable, but not
later than the first day of the fifteenth full calendar month following the
Effective Date, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions of Rule
158(a) under Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
3.16 NOTICE TO NASD. For a period of ninety days following the Effective
Date, in the event any person or entity (regardless of any NASD affiliation or
association) is engaged to assist the Company in its search for a merger
candidate or to provide any other merger and acquisition services, the Company
will provide the following to the NASD and LCM prior to the consummation of the
Business Combination: (i) complete details of all services and copies of
agreements governing such services (which details or agreements may be
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 and related
person" with respect to the Company's initial public offering, as such term is
defined in Rule 2710 of the NASD's Conduct Rules. The Company also agrees that
proper disclosure of such arrangement or potential arrangement will be made in
the proxy statement which the Company will file for purposes of soliciting
stockholder approval for the Business Combination.
3.17 STABILIZATION. Neither the Company, nor, to its knowledge, any of its
employees, directors or stockholders (without the consent of LCM) has taken or
will take, directly or indirectly, any action designed to or that has
constituted or that might reasonably be expected to cause or result in, under
the Exchange Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to
14
facilitate the sale or resale of the Units.
3.18 INTERNAL CONTROLS. The Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.19 ACCOUNTANTS. 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 GGK or another independent public accountant.
3.20 FORM 8-K. The Company shall, on the date hereof, retain its
independent public accountants to audit the financial statements of the Company
as of the Closing Date ("Audited Financial Statements") reflecting the receipt
by the Company of the proceeds of the initial public offering. As soon as the
Audited Financial Statements become available, the Company shall immediately
file a Current Report on Form 8-K with the Commission, which Report shall
contain the Company's Audited Financial Statements.
3.21 NASD. The Company shall advise the NASD if it is aware that any 5% or
greater stockholder of the Company becomes an affiliate or associated person of
an NASD member participating in the distribution of the Company's Public
Securities.
3.22 CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters necessary to carry out the provisions of this Agreement and the
transactions contemplated hereby shall have been done to the reasonable
satisfaction to counsel for the Underwriters.
3.23 INVESTMENT COMPANY. The Company shall cause a portion of the proceeds
of the Offering to be deposited and held in the Trust Fund, to be invested only
as set forth in the Trust Agreement and as more fully described in the
Prospectus. The Company will otherwise conduct its business in a manner so that
it will not become subject to the Investment Company Act. Furthermore, once the
Company consummates a Business Combination, it will be engaged in a business
other than that of investing, reinvesting, owning, holding or trading
securities.
3.24 Intentionally Omitted.
3.25 INTENTIONALLY OMITTED.
3.26 INSIDER WARRANTS.
3.26.1 INSIDER WARRANT PURCHASE PRICE. Simultaneously with the
consummation of the Offering, the purchase price for the Insider Warrants shall
be deposited in the Trust Fund.
3.26.2 INSIDER WARRANT EXERCISES. The Company hereby acknowledges and
agrees that, in the event the Company calls the Warrants for redemption pursuant
to the Warrant Agreement, the Insider Warrants may be exercised by the Insider
Purchasers or its affiliates by surrendering the Insider Warrants for that
number of shares of Common Stock equal to the quotient obtained by dividing (x)
the product of the number of shares of Common Stock underlying the Insider
Warrants, multiplied by the difference between the Warrant Price and the "Fair
Market Value" (defined below) by (y) the Fair Market Value. The "Fair Market
Value" shall mean the average reported last sale price of the Common Stock for
the 10 trading days ending on the third business day prior to the date on which
the notice of redemption is sent to holders of Warrants.
15
3.27 AMEX MAINTENANCE. Until the consummation of a Business Combination,
the Company will use commercially reasonable efforts to maintain the listing by
the AMEX of the Securities.
4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of the
Company as of the date hereof at the Applicable Time and as of each of the
Closing Date and the Option Closing Date, if any, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof and
to the performance by the Company of its obligations hereunder and to the
following conditions:
4.1 REGULATORY MATTERS.
4.1.1 EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement shall have become effective not later than 5:00 P.M., New York time,
on the date of this Agreement or such later date and time as shall be consented
to in writing by you, and, at each of the Closing Date and the Option Closing
Date, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for the purpose shall have been
instituted or shall be pending or contemplated by the Commission and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Xxxxxxxx Xxxxxx, counsel for the
Underwriters ("GM").
4.1.2 NASD CLEARANCE. By the Effective Date, the Representative shall
have received clearance from the NASD as to the amount of compensation allowable
or payable to the Underwriters as described in the Registration Statement.
4.1.3 NO BLUE SKY STOP ORDERS. No order suspending the sale of the
Units in any jurisdiction designated by you pursuant to Section 3.3 hereof shall
have been issued on either on the Closing Date or the Option Closing Date, and
no proceedings for that purpose shall have been instituted or shall be
contemplated.
4.2 COMPANY COUNSEL MATTERS.
4.2.1 EFFECTIVE DATE OPINION OF COUNSEL. On the Effective Date, the
Representative shall have received the favorable opinion of Xxxxx, Xxxx &
X'Xxxxxxxx, P.C. ("DM&A"), dated the Effective Date, addressed to the
Representative and in form and substance satisfactory to GM to the effect that:
(i) The Company has been duly organized and is validly existing
as a corporation and is in good standing under the laws of its state of
incorporation. The Company is duly qualified and licensed and in good standing
as a foreign corporation in each jurisdiction in which its ownership or leasing
of any properties or the character of its operations requires such qualification
or licensing, except where the failure to qualify would not have a material
adverse effect on the assets, business or operations of the Company.
(ii) All issued and outstanding securities of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
the holders thereof are not subject to personal liability by reason of being
such holders; and none of such securities were issued in violation of the
preemptive rights of any stockholder of the Company arising by operation of law
or under the Certificate of Incorporation or Bylaws of the Company. The offers
and sales of the outstanding Common Stock were at all relevant times either
registered under the Act or exempt from such registration requirements. The
authorized and, to such counsel's knowledge, outstanding capital stock of the
Company is as set forth in the Preliminary Prospectus and the Prospectus.
(iii) The Securities and Insider Securities have been duly
authorized and, when issued and paid for, will be validly issued, fully paid and
non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders. The Securities and Insider Securities
are
16
not and will not be subject to the preemptive rights of any holders of any
security of the Company arising by operation of law or under the Certificate of
Incorporation or Bylaws of the Company. When issued, the Representative's
Purchase Option, the Representative's Warrants, the Insider Warrants and the
Warrants will constitute valid and binding obligations of the Company to issue
and sell, upon exercise thereof and payment therefor, the number and type of
securities of the Company called for thereby and such Warrants, the Insider
Warrants, the Representative's Purchase Option and the Representative's
Warrants, when issued, in each case, are enforceable against the Company in
accordance with their respective terms, except (a) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (b) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought. The
certificates representing the Securities are in due and proper form.
(iv) This Agreement, the Warrant Agreement, the Services
Agreement, the Trust Agreement, the Warrant Purchase Agreement, the Escrow
Agreements and the Registration Rights Agreement have each been duly and validly
authorized, executed and delivered by the Company and constitute, and the
Representative's Purchase Option has been duly and validly authorized by the
Company and, when executed and delivered, will constitute, the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (b) as enforceability of any indemnification or contribution
provisions may be limited under the federal and state securities laws, and (c)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(v) The execution, delivery and performance of this Agreement,
the Warrant Agreement, the Representative's Purchase Option, the Escrow
Agreements, the Trust Agreement, the Warrant Purchase Agreement, the Services
Agreement and the Registration Rights Agreement and compliance by the Company
with the terms and provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby, and the issuance and sale of the
Securities, do not and will not, with or without the giving of notice or the
lapse of time, or both, (a) to such counsel's knowledge, conflict with, or
result in a breach of, any of the terms or provisions of, or constitute a
default under, or result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to the terms of, any mortgage, deed of trust, note, indenture,
loan, contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the provisions of
the Certificate of Incorporation or the Bylaws of the Company, or (c) to such
counsel's knowledge, violate any United States statute or any judgment, order or
decree, rule or regulation applicable to the Company of any court, United States
federal, state or other regulatory authority or other governmental body having
jurisdiction over the Company, its properties or assets.
(vi) Each of the Registration Statement, at the Effective Date,
the Preliminary Prospectus, as of the Applicable Time and the Prospectus as of
the date it was filed with the Commission and as of the Closing Date and Option
Closing Date and any post-effective amendments or supplements thereto (other
than the financial statements included therein, as to which no opinion need be
rendered) complies as to form in all material respects with the requirements of
the Act and Regulations. The Securities and all other securities issued or
issuable by the Company conform in all material respects to the description
thereof contained in the Registration Statement, the Preliminary Prospectus and
the Prospectus. The descriptions in the Registration Statement, the Preliminary
Prospectus and in the Prospectus, insofar as such statements constitute a
summary of statutes, legal matters, contracts, documents or proceedings referred
to therein, fairly present in all material respects the information required to
be shown with respect to such statutes, legal matters, contracts, documents and
proceedings, and such counsel does not know of any statutes or legal or
governmental proceedings required to be described in the Preliminary Prospectus
and the Prospectus that are
17
not described in the Registration Statement, the Preliminary Prospectus and the
Prospectus or included as exhibits to the Registration Statement that are not
described or included as required.
(vii) The Registration Statement is effective under the Act.
To such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act or applicable state
securities laws.
(viii) To such counsel's knowledge, there is no action, suit
or proceeding before or by any court of governmental agency or body, domestic or
foreign, now pending, or threatened against the Company that is required to be
described in the Registration Statement.
The opinion of counsel shall further include a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters and the independent public accountants of the
Company, at which conferences the contents of the Registration Statement, the
Preliminary Prospectus and the Prospectus contained therein and related matters
were discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Preliminary Prospectus
and the Prospectus contained therein (except as otherwise set forth in the
foregoing opinion), solely on the basis of the foregoing without independent
check and verification, no facts have come to the attention of such counsel
which lead them to believe that the Registration Statement (or any amendment
thereto), at the Effective Time, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading or that the Preliminary Prospectus, as of the Applicable
Time, and the Prospectus (or any amendment thereto), as of the date it was filed
by the Company with the Commission and as of the Closing Date and the Option
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (except that such counsel need express no opinion with respect to
the financial information and statistical data and information included in the
Registration Statement, Preliminary Prospectus or the Prospectus).
4.2.2 CLOSING DATE AND OPTION CLOSING DATE OPINION OF COUNSEL. On
each of the Closing Date and the Option Closing Date, if any, the Representative
shall have received the favorable opinion of DM&A, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Representative and in
form and substance reasonably satisfactory to GM, confirming as of the Closing
Date and, if applicable, the Option Closing Date, the statements made by DM&A in
its opinion delivered on the Effective Date.
4.2.3 RELIANCE. In rendering such opinion, such counsel may rely (i)
as to matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance reasonably satisfactory to
GM) of other counsel reasonably acceptable to GM, familiar with the applicable
laws, and (ii) as to matters of fact, to the extent they deem proper, on
certificates or other written statements of officers of the Company and officers
of departments of various jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company, provided that copies of
any such statements or certificates shall be delivered to the Underwriters'
counsel if requested. The opinion of counsel for the Company and any opinion
relied upon by such counsel for the Company shall include a statement to the
effect that it may be relied upon by counsel for the Underwriters in its opinion
delivered to the Underwriters.
4.3 COLD COMFORT LETTER. At the time this Agreement is executed, and at
each of the Closing Date and the Option Closing Date, if any, you shall have
received a letter, addressed to the Representative and in form and substance
satisfactory in all respects (including the non-material nature of the changes
or decreases, if any, referred to in clause (iii) below) to you and to GM from
GGK dated, respectively, as of the date of this Agreement and as of the Closing
Date and the Option Closing Date, if any:
18
(i) Confirming that they are an independent registered public
accounting firm with respect to the Company within the meaning of the Act and
the applicable Regulations and that they have not, during the periods covered by
the financial statements included in the Prospectus, provided to the Company any
non-audit services, as such term is used in Section 10A(g) of the Exchange Act;
(ii) Stating that in their opinion the financial statements of
the Company included in the Registration Statement, the Preliminary Prospectus
and Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act and the published Regulations thereunder;
(iii) Stating that, on the basis of a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholders and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible for
financial and accounting matters and other specified procedures and inquiries,
they have been advised by the Company officials that (a) the unaudited financial
statements of the Company included in the Registration Statement, the
Preliminary Prospectus and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations or are fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements of the Company included in the Registration
Statement, the Preliminary Prospectus and the Prospectus and (b) at a date not
later than five days prior to the Effective Date, Closing Date or Option Closing
Date, as the case may be, there was no change in the capital stock or long-term
debt of the Company, or any decrease in the stockholders' equity of the Company
as compared with amounts shown in the December 31, 2006 balance sheet included
in the Registration Statement, the Preliminary Prospectus and the Prospectus,
other than as set forth in or contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus or, if there was any decrease, setting
forth the amount of such decrease;
(iv) Stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the Registration
Statement, the Preliminary Prospectus and the Prospectus in each case to the
extent that such amounts, numbers, percentages, statements and information may
be derived from the general accounting records, including work sheets, of the
Company and excluding any questions requiring an interpretation by legal
counsel, with the results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures do not constitute
an examination in accordance with generally accepted auditing standards) set
forth in the letter and found them to be in agreement;
(v) Stating that they have not provided the Company's
management with any written communication in accordance with Statement on
Auditing Standards No. 60 "Communication of Internal Control Structure Related
Matters Noted in an Audit;" and
(vi) Statements as to such other matters incident to the
transaction contemplated hereby as you may reasonably request.
19
4.4 OFFICERS' CERTIFICATES.
4.4.1 OFFICERS' CERTIFICATE. At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Chairman of the Board or the President
and the Secretary or Assistant Secretary of the Company (in their capacities as
such), dated the Closing Date or the Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.5 hereof have been satisfied as of such date and that, as of Closing Date and
the Option Closing Date, as the case may be, the representations and warranties
of the Company set forth in Section 2 hereof are true and correct. In addition,
the Representative will have received such other and further certificates of
officers (in their capacities as such) of the Company as the Representative may
reasonably request.
4.4.2 SECRETARY'S CERTIFICATE. At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary or Assistant Secretary of the
Company, dated the Closing Date or the Option Date, as the case may be,
respectively, certifying (i) that the Bylaws and Certificate of Incorporation of
the Company are true and complete, have not been modified and are in full force
and effect, (ii) that the resolutions relating to the public offering
contemplated by this Agreement are in full force and effect and have not been
modified, (iii) all correspondence between the Company or its counsel and the
Commission, (iv) all correspondence between the Company or its counsel and AMEX
concerning the listing of the Securities on AMEX and (v) as to the incumbency of
the officers of the Company. The documents referred to in such certificate shall
be attached to such certificate.
4.5 NO MATERIAL CHANGES. Prior to and on each of the Closing Date and the
Option Closing Date, if any, (i) there shall have been no material adverse
change or development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the
Registration Statement, the Preliminary Prospectus and the Prospectus, (ii) no
action suit or proceeding, at law or in equity, shall have been pending or
threatened against the Company or any Initial Stockholder before or by any court
or federal or state commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may materially adversely affect the
business, operations, prospects or financial condition or income of the Company,
except as set forth in the Registration Statement, the Preliminary Prospectus
and the Prospectus, (iii) no stop order shall have been issued under the Act and
no proceedings therefor shall have been initiated or threatened by the
Commission, and (iv) the Registration Statement, the Preliminary Prospectus and
the Prospectus and any amendments or supplements thereto shall contain all
material statements which are required to be stated therein in accordance with
the Act and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration
Statement, the Preliminary Prospectus nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
4.6 DELIVERY OF AGREEMENTS.
4.6.1 EFFECTIVE DATE DELIVERIES. On the Effective Date, the Company
shall have delivered to the Representative executed copies of the Escrow
Agreements, the Trust Agreement, the Warrant Agreement, the Services Agreement,
the Warrant Purchase Agreements and all of the Insider Letters.
4.6.2 CLOSING DATE DELIVERIES. On the Closing Date, the Company shall
have delivered to the Representative executed copies of the Representative's
Purchase Option.
4.7 OPINION OF COUNSEL FOR THE UNDERWRITERS. All proceedings taken in
connection with the authorization, issuance or sale of the Securities as herein
contemplated shall be reasonably satisfactory in form
20
and substance to you and to GM and you shall have received from such counsel a
favorable opinion and negative assurance statement, dated the Closing Date and
the Option Closing Date, if any, with respect to such of these proceedings as
you may reasonably require. On or prior to the Effective Date, the Closing Date
and the Option Closing Date, as the case may be, counsel for the Underwriters
shall have been furnished such documents, certificates and opinions as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 4.7, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
4.8 INTENTIONALLY OMITTED.
4.9 INSIDER SECURITIES. On the Closing Date, the Insider Purchasers shall
have purchased the Insider Warrants and the purchase price for such Insider
Warrants shall be deposited into the Trust Fund.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
affiliates and each of its and their respective directors, officers, members,
employees, representatives and agents and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act of or Section
20 of the Exchange Act (collectively the "Underwriter Indemnified Parties," and
each a "Underwriter Indemnified Party") against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, expense, liability, action, investigation or proceeding arises
out of or is based upon (A) any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, any Registration
Statement or the Prospectus, or in any amendment or supplement thereto or
document incorporated by reference therein, (B) the omission or alleged omission
to state in any Preliminary Prospectus, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated
by reference therein, a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (C) any breach of the
representations and warranties of the Company contained herein or failure of the
Company to perform its obligations hereunder or pursuant to any law, any act or
failure to act, or any alleged act or failure to act, by any Underwriter in
connection with, or relating in any manner to, the Securities or the Offering,
and which is included as part of or referred to in any loss, claim, damage,
expense, liability, action, investigation or proceeding arising out of or based
upon matters covered by subclause (A), (B) or (C) above of this Section 5(a)
(PROVIDED that the Company shall not be liable in the case of any matter covered
by this subclause (C) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, expense or
liability resulted directly from any such act or failure to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse the Underwriter Indemnified Party promptly upon
demand for any reasonable legal fees or other expenses reasonably incurred by
that Underwriter Indemnified Party in connection with investigating, or
preparing to defend, or defending against, or appearing as a third party witness
in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding, as such fees
and expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage, expense
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in, or omission or alleged omission from any Preliminary
Prospectus, any Registration Statement or the Prospectus, or any such amendment
or supplement thereto, made in reliance upon and in conformity with written
information furnished to the Company by the Representative by or on behalf of
any Underwriter specifically for use therein. This indemnity agreement is not
exclusive and will be in addition to any liability, which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company and its directors, its officers who signed the Registration
Statement and each person, if any, who
21
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively the "Company Indemnified Parties"
and each a "Company Indemnified Party") against any loss, claim, damage, expense
or liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Company Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, expense, liability, action, investigation or proceeding arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, any Registration
Statement or the Prospectus, or in any amendment or supplement thereto, a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Representative by or on behalf of any Underwriter specifically
for use therein, and shall reimburse the Company for any legal or other expenses
reasonably incurred by such party in connection with investigating or preparing
to defend or defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability, action, investigation or
proceeding, as such fees and expenses are incurred. Notwithstanding the
provisions of this Section 5(b), in no event shall any indemnity by a
Underwriter under this Section 5(b) exceed the total compensation received by
such Underwriter in accordance with Section 1.1.1.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 5, notify such indemnifying party in writing of the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have under this Section 5
except to the extent it has been materially prejudiced by such failure; and,
PROVIDED, FURTHER, that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 5. If any such action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense of such action with counsel reasonably satisfactory to the
indemnified party (which counsel shall not, except with the written consent of
the indemnified party, be counsel to the indemnifying party). After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such action, except as provided herein, the indemnifying party shall
not be liable to the indemnified party under Section 5 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense of such action (other than reasonable costs of investigation); PROVIDED,
HOWEVER, that any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense of such action but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized in writing by the Company in
the case of a claim for indemnification under Section 5(a) or the Underwriters
in the case of a claim for indemnification under Section 5(b), (ii) such
indemnified party shall have been advised by its counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party, or (iii) the indemnifying party has
failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party within a reasonable period of time after
notice of the commencement of the action or the indemnifying party does not
diligently defend the action after assumption of the defense, in which case, if
such indemnified party notifies the indemnifying party in writing that it elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of (or, in the
case of a failure to diligently defend the action after assumption of the
defense, to continue to defend) such action on behalf of such indemnified party
and the indemnifying party shall be responsible for legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
of such action; PROVIDED, HOWEVER, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more
22
than one separate firm of attorneys at any time for all such indemnified
parties (in addition to any local counsel), which firm shall be designated in
writing by LCM if the indemnified parties under this Section 5 consist of any
Underwriter Indemnified Party or by the Company if the indemnified parties under
this Section 5 consist of any Company Indemnified Parties. Subject to this
Section 5(c), the amount payable by an indemnifying party under Section 5 shall
include, but not be limited to, (x) reasonable legal fees and expenses of
counsel to the indemnified party and any other expenses in investigating, or
preparing to defend or defending against, or appearing as a third party witness
in respect of, or otherwise incurred in connection with, any action,
investigation, proceeding or claim, and (y) all amounts paid in settlement of
any of the foregoing. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of judgment with respect to any pending or threatened action or any claim
whatsoever, in respect of which indemnification or contribution could be sought
under this Section 5 (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 in form and
substance reasonably satisfactory to such indemnified party from all liability
arising out of such action 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. Subject to the provisions of the following sentence, no
indemnifying party shall be liable for settlement of any pending or threatened
action or any claim whatsoever that is effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled
with its written consent, if its consent has been unreasonably withheld or
delayed or if there be a judgment for the plaintiff in any such matter, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
In addition, if at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated herein effected without its written
consent if (i) such settlement is entered into more than forty-five (45) days
after receipt by such indemnifying party of the request for reimbursement, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least thirty (30) days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under Section 5(a) or Section
5(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid, payable or otherwise incurred
by such indemnified party as a result of such loss, claim, damage, expense or
liability (or any action, investigation or proceeding in respect thereof), as
incurred, (i) in such proportion as shall be 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, or (ii) if the allocation
provided by clause (i) of this Section 5(d) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) of this Section 5(d) but also the relative fault of
the Company on the one hand and the Underwriters on the other with respect to
the statements, omissions, acts or failures to act which resulted in such loss,
claim, damage, expense or liability (or any action, investigation or proceeding
in respect thereof) 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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total discounts and commissions received by the Underwriters
in connection with the Offering, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company on the one hand
and the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement,
omission, act or failure to act. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 5(d)
were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
23
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage, expense, liability, action,
investigation or proceeding referred to above in this Section 5(d) shall be
deemed to include, for purposes of this Section 5(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating, preparing to defend or defending against or appearing as a third
party witness in respect of, or otherwise incurred in connection with, any such
loss, claim, damage, expense, liability, action, investigation or proceeding.
Notwithstanding the provisions of this Section 5(d), no Underwriter shall be
required to contribute any amount in excess of the total compensation received
by such Underwriter in accordance with Section 1.1.1 less the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement, omission or alleged omission,
act or alleged act or failure to act or alleged failure to act. 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. The Underwriters' obligations to
contribute as provided in this Section 5(d) are several in proportion to their
respective obligations and not joint.
6. DEFAULT BY AN UNDERWRITER.
6.1 DEFAULT NOT EXCEEDING 10% OF FIRM UNITS OR OPTION UNITS. If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Units or Option Units that all Underwriters have agreed to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
6.2 DEFAULT EXCEEDING 10% OF FIRM UNITS OR OPTION UNITS. In the event that
the default addressed in Section 6.1 above relates to more than 10% of the Firm
Units or Option Units, you may in your discretion arrange for yourself or for
another party or parties to purchase such Firm Units or Option Units to which
such default relates on the terms contained herein. If within one business day
after such default relating to more than 10% of the Firm Units or Option Units
you do not arrange for the purchase of such Firm Units or Option Units, then the
Company shall be entitled to a further period of one business day within which
to procure another party or parties satisfactory to you to purchase said Firm
Units or Option Units on such terms. In the event that neither you nor the
Company arrange for the purchase of the Firm Units or Option Units to which a
default relates as provided in this Section 6, this Agreement will be terminated
without liability on the part of the Company (except as provided in Sections
3.13 and 5 hereof) or the several Underwriters (except as provided in Section 5
hereof); provided, however, that if such default occurs with respect to the
Option Units, this Agreement will not terminate as to the Firm Units; and
provided further that nothing herein shall relieve a defaulting Underwriter of
its liability, if any, to the other several Underwriters and to the Company for
damages occasioned by its default hereunder.
6.3 POSTPONEMENT OF CLOSING DATE. In the event that the Firm Units or
Option Units to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, you or the Company shall have the right to postpone the Closing
Date or Option Closing Date for a reasonable period, but not in any event
exceeding five business days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment to the Registration Statement or the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Securities.
7. RIGHT TO APPOINT OBSERVER. Until the consummation of a Business Combination,
upon notice from LCM to the Company, LCM shall have the right to send a
representative (who need not be the same individual from meeting to meeting) to
observe each meeting of the Board of Directors of the Company; provided that
such representative shall sign a Regulation FD compliant confidentiality
agreement which is reasonably
24
acceptable to LCM and its counsel in connection with such representative's
attendance at meetings of the Board of Directors; and provided further that upon
written notice to LCM, the Company may exclude the representative from meetings
where, in the written opinion of counsel for the Company, the representative's
presence would destroy the attorney-client privilege. The Company agrees to give
LCM written notice of each such meeting and to provide LCM with an agenda and
minutes of the meeting no later than it gives such notice and provides such
items to the other directors and to reimburse the representative of LCM for its
reasonable out-of-pocket expenses incurred in connection with its attendance at
the meeting, including but not limited to, food, lodging and transportation.
8. ADDITIONAL COVENANTS.
8.1 INTENTIONALLY OMITTED.
8.2 ADDITIONAL SHARES OR OPTIONS. The Company hereby agrees that until the
consummation of a Business Combination, it shall not issue any shares of Common
Stock or any options or other securities convertible into Common Stock, or any
shares of Preferred Stock which participate in any manner in the Trust Fund or
which vote as a class with the Common Stock on a Business Combination.
8.3 TRUST FUND WAIVER ACKNOWLEDGMENT.
(a) UNDERWRITERS/REPRESENTATIVE. Except with respect to the
underwriting discounts and commissions due to the Underwriters only upon
successful consummation of a Business Combination, each of the Underwriters and
the Representative hereby agree that it does not have any right, title, interest
or claim of any kind in or to any monies in the Trust Fund ("Claim") and waive
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.
(b) TARGET BUSINESSES AND VENDORS. The Company hereby agrees that it
will not commence its due diligence investigation of any operating business
which the Company seeks to acquire (each a "Target Business") or obtain the
services of any vendor unless and until such Target Business or vendor
acknowledges in writing, whether through a letter of intent, memorandum of
understanding or other similar document (and subsequently 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
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 below in Section 8.8), (ii) to the
public stockholders upon the liquidation of the Company if the Company fails to
consummate a Business Combination or (iii) to the Company after, or concurrently
with, the consummation of a Business Combination and (b) for and in
consideration of the Company (1) agreeing to evaluate such Target Business for
purposes of consummating a Business Combination with it or (2) agreeing to
engage the services of the vendor, as the case may be, such Target Business or
vendor agrees that it does not have any Claim of any kind in or to any monies in
the Trust Fund 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.
8.4 INSIDER LETTERS. The Company shall not take any action or omit to take
any action which would cause a breach of any of the Insider Letters and will not
allow any amendments to, or waivers of, such Insider Letters without the prior
written consent of LCM.
8.5 CERTIFICATE OF INCORPORATION 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 its Certificate of Incorporation or Bylaws. Prior to the
consummation of a Business Combination, the Company will not amend its
Certificate of Incorporation without the prior written consent of LCM.
25
8.6 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.
8.7 INTENTIONALLY OMITTED.
8.8 ACQUISITION/LIQUIDATION PROCEDURE. The Company agrees: (i) that, prior
to the consummation of any Business Combination, it will submit such transaction
to the Company's stockholders for their approval ("Business Combination Vote")
even if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law; and (ii) that, in the event
that the Company does not effect a Business Combination within 24 months from
the Effective Date, the Company will be liquidated and will distribute to all
holders of IPO Shares (defined below) an aggregate sum equal to the Company's
"Liquidation Value." The Company's "Liquidation Value" shall mean the Company's
book value, as determined by the Company and approved by Xxxxxx. 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 shall
be entitled to receive liquidating distributions and the Company shall pay no
liquidating distributions with respect to any other shares of capital stock of
the Company. 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 this 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 Common Stock issued in this Offering ("IPO Shares") the
right to convert their IPO Shares at a per share price ("Conversion Price")
equal to the amount in the Trust Fund (inclusive of any interest income therein)
calculated as of two business days prior to the consummation of the proposed
Business Combination divided by the total number of IPO Shares. If a majority of
the holders of IPO Shares present and entitled to vote on the Business
Combination vote in favor of such Business Combination and holders of less than
20% in interest of the Company's IPO Shares elect to convert their IPO Shares,
the Company may, but will not be required to, proceed with such Business
Combination. 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 IPO Shares, who vote against approval
of any potential Business Combination, elect to convert their IPO Shares, the
Company will not proceed with such Business Combination and will not convert
such shares. The provisions of this Section 8.8 may not be modified, amended or
deleted under any circumstances.
8.9 RULE 419. The Company agrees that it will use its best efforts to
prevent the Company from becoming subject to Rule 419 under the Act prior to the
consummation of any Business Combination, including but not limited to using its
best efforts to prevent any of the Company's outstanding securities from being
deemed to be a "xxxxx stock" as defined in Rule 3a-51-1 under the Exchange Act
during such period.
8.10 AFFILIATED TRANSACTIONS. 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 suitable opportunity to acquire an operating business,
until the earlier of the consummation by the Company of a Business Combination,
the liquidation of the Company or until such time as the Initial Stockholders
cease to be an officer or director of the Company, subject to any pre-existing
fiduciary or contractual obligations the Initial Stockholders might have.
8.11 TARGET NET ASSETS. The Company agrees that the initial Target Business
that it acquires must have a fair market value equal to at least 80% of the
Company's net assets (all of the Company's assets, including the funds held in
the Trust Fund, less the Company's liabilities) at the time of such acquisition.
The fair market value of such business must be determined by the Board of
Directors of the Company based upon standards generally accepted by the
financial community, such as actual and potential sales, earnings and cash
26
flow and book value. If the Board of Directors of the Company is not able to
independently determine that the target business has a fair market value of at
least 80% of the Company's net assets at the time of such acquisition, the
Company will obtain an opinion from an unaffiliated, independent investment
banking firm which is a member of the NASD reasonably acceptable to LCM with
respect to the satisfaction of such criteria. The Company is not required to
obtain an opinion from an investment banking firm as to the fair market value if
the Company's Board of Directors independently determines that the Target
Business does have sufficient fair market value.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the context
otherwise requires, all representations, warranties and agreements contained in
this Agreement shall be deemed to be representations, warranties and agreements
at the Closing Dates and such representations, warranties and agreements of the
Underwriters and Company, including the indemnity agreements contained in
Section 5 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter, the Company or any
controlling person, and shall survive termination of this Agreement or the
issuance and delivery of the Securities to the several Underwriters until the
earlier of the expiration of any applicable statute of limitations and the
seventh anniversary of the later of the Closing Date or the Option Closing Date,
if any, at which time the representations, warranties and agreements shall
terminate and be of no further force and effect.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
10.1 EFFECTIVE DATE. This Agreement shall become effective on the Effective
Date at the time the Registration Statement is declared effective by the
Commission.
10.2 TERMINATION. You shall have the right to terminate this Agreement at
any time prior to any Closing Date, (i) if any domestic or international event
or act or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, general securities markets in the United
States; or (ii) if trading on the New York Stock Exchange, Nasdaq Global Market,
the American Stock Exchange, the Boston Stock Exchange or on the NASD OTC
Bulletin Board (or successor trading market) shall have been suspended or
materially limited, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities shall have been required on the NASD
OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities or the subject of an
act of terrorism or there shall have been an outbreak of or escalation in
hostilities involving the United States, or there shall have been a declaration
of a national emergency by the United States, or (iv) if a banking moratorium
has been declared by a New York State or federal authority or a material
disruption has occurred in commercial banking or securities settlement or
clearance in the United States, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States
securities market, or (vi) if the Company shall have sustained a material loss
by fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act which, whether or not such loss shall have been
insured, will, in your opinion, make it inadvisable to proceed with the delivery
of the Units, or (vii) if any of the Company's representations, warranties or
covenants hereunder are breached, or (viii) if the Representative shall have
become aware after the date hereof of such a material adverse change in the
conditions or prospects of the Company, or such adverse material change in
general market conditions, including without limitation as a result of terrorist
activities after the date hereof, as in the Representative's judgment would make
it impracticable or inadvisable to proceed with the offering, sale and/or
delivery of the Units or to enforce contracts made by the Underwriters for the
sale of the Securities.
10.3 EXPENSES. In the event that this Agreement shall not be carried out
for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the obligations of the Company to pay the
out of pocket expenses related to the transactions contemplated herein shall be
governed by Section 3.13 hereof.
27
10.4 INDEMNIFICATION. Notwithstanding any contrary provision contained in
this Agreement, any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the provisions of
Section 5 shall not be in any way effected by, such election or termination or
failure to carry out the terms of this Agreement or any part hereof.
11. MISCELLANEOUS.
11.1 NOTICES. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed, delivered or
telecopied and confirmed and shall be deemed given when so delivered or
telecopied and confirmed or if mailed, two days after such mailing
If to the Representative:
Lazard Capital Markets LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, General Counsel
Copy to:
Xxxxxxxx Xxxxxx
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxx Xxxxxx, Esq.
If to the Company:
Geneva Acquisition Corporation
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Xx., Chief Operating Officer
Copy to:
Xxxxx, Xxxx & X'Xxxxxxxx, P.C.
Xxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
11.2 HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
11.3 AMENDMENT. Except for Section 8.8 (which may not be amended under any
circumstances), this Agreement may only be amended by a written instrument
executed by each of the parties hereto.
11.4 ENTIRE AGREEMENT. This Agreement (together with the other agreements
and documents being delivered pursuant to or in connection with this Agreement)
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and thereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
28
11.5 BINDING EFFECT. This Agreement shall inure solely to the benefit of
and shall be binding upon the Representative, the Underwriters, the Company and
the controlling persons, directors and officers referred to in Section 5 hereof,
and their respective successors, legal representatives and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provisions
herein contained.
11.6 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company 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 of the United States of America for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any such
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 11.1 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys' fees and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
11.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more original or facsimile counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
11.8 WAIVER, ETC. The failure of any of the parties hereto to at any time
enforce any of the provisions of this Agreement shall not be deemed or construed
to be a waiver of any such provision, nor to in any way effect the validity of
this Agreement or any provision hereof or the 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.
11.9 NO FIDUCIARY DUTY. The Company acknowledges and agrees that neither
the Representative, the Underwriters nor the controlling persons of any of them
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 Securities. The Company further acknowledges and agrees
that:
(a) the Underwriters' responsibility to the Company is solely contractual
in nature, the Underwriters have been retained solely to act as Underwriters in
connection with the Offering and no fiduciary, advisory or agency relationship
between the Company and the Underwriters has been created in respect of any of
the transactions contemplated by this Agreement, irrespective of whether the
Underwriters or Lazard Freres & Co. LLC has advised or is advising the Company
on other matters;
(b) the price of the Units set forth in this Agreement was established
following arms-length negotiations and the Company is capable of evaluating and
understanding, and understands and accepts, the terms, risks and conditions of
the transactions contemplated by this Agreement;
(c) it has been advised that the Underwriters and Lazard Freres & Co. LLC
and their affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that the
Underwriters have no obligation to disclose such interests and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and
29
(d) it waives, to the fullest extent permitted by law, any claims it may
have against the Underwriters for breach of fiduciary duty and agrees that the
Underwriters shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on behalf of or in right of the Company, including stockholders,
employees or creditors of the Company.
30
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
GENEVA ACQUISITION CORPORATION
By: ___________________________________
Name:
Title:
Accepted on the date first
above written.
LAZARD CAPITAL MARKETS LLC
By: ______________________________
Name:
Title:
31
SCHEDULE I
GENEVA ACQUISITION CORPORATION
10,000,000 UNITS
Number of Firm Units
UNDERWRITER to be Purchased
----------- --------------------
Lazard Capital Markets LLC
Ladenburg Xxxxxxxx & Co. Inc.
Xxxxxx, Xxxxx Xxxxx Incorporated
10,000,000
