Exhibit 10.2
[Form of Letter Agreement for
Directors and Officers of SP Acquisition Holdings, Inc.]
, 2007
SP Acquisition Holdings, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladenburg Xxxxxxxx & Co. Inc.
000 Xxxx 00 Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Initial Public Offering of SP Acquisition Holdings, Inc.
Ladies and Gentlemen:
This letter is being delivered to you in accordance with the Underwriting
Agreement (the "Underwriting Agreement") entered into by and between SP
Acquisition Holdings, Inc., a Delaware corporation (the "Company"), and UBS
Securities LLC and Ladenburg Xxxxxxxx & Co., Inc. as the representatives of the
underwriters named in Schedule I thereto (the "Underwriters"), relating to an
underwritten initial public offering (the "IPO") of the Company's units (the
"Units"), each composed of one share of the Company's common stock, par value
$0.001 per share (the "Common Stock"), and one warrant, which is exercisable for
one share of Common Stock (the "Warrants"). Certain capitalized terms used
herein are defined in paragraph 9 hereof.
In order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the IPO, and in recognition of the
benefit that such IPO will confer upon the undersigned officer and/or director
of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agrees with
the Company as follows:
1. In the event that the Company fails to consummate an Initial Business
Combination within 24 months from the effective date (the "Effective Date") of
the registration statement on Form S-1 (File No. 333-142696) relating to the IPO
(the "Registration Statement"), the undersigned will take all reasonable actions
within his or her power to (a) cause the Trust Account to be liquidated and
distributed to the holders of the IPO Shares as soon as reasonably practicable
and (b) cause the Company to liquidate as soon as reasonably practicable (the
earliest date on which the conditions in clauses (a) and (b) are both satisfied
being the "Liquidation Date"). The undersigned agrees that in connection with
any cessation of corporate existence of the Company on [_______], 2009, he or
she will cause the Company to adopt a plan of dissolution and distribution in
accordance with Section 281(b) of the General Corporation Law of the State of
Delaware or any successor provision thereto.
2. (a) Neither the undersigned nor any affiliate of the undersigned
will be entitled to receive, and no such person will accept, any finder's fee,
reimbursement or cash payment from the Company for services rendered to the
Company prior to or in connection with the consummation of an Initial Business
Combination, other than (subject to the following sentence) (i) repayment of
that certain Promissory Note in the amount of $250,000 made to the Company by
Steel Partners, Ltd., to cover offering-related and organizational expenses;
(ii) a payment of an aggregate of $10,000 per month to Steel Partners, Ltd., for
office space, secretarial and administrative services; and (iii) reimbursement
for any out-of-pocket expenses or advances related to: (i) the IPO, (ii)
identifying, investigating and consummating an Initial Business Combination or
(iii) other expenses or advances that the Company is permitted incur. The
undersigned acknowledges that the Company's Audit Committee (or the Company's
Board of Directors in the case of a director who is a member of the Company's
Audit Committee) will review and approve all payments made to the undersigned,
the Company's officers and directors and the Company's or their affiliates,
other than the $10,000 per month payment described in the immediately preceding
sentence.
(b) Neither the undersigned, nor any member of the family of the
undersigned, nor any affiliate of the undersigned, will accept a finder's fee,
consulting fee or any other compensation or fees from any person or other entity
in connection with an Initial Business Combination, other than compensation or
fees that may be received for any services provided following such Initial
Business Combination.
3. The undersigned agrees not to resign as [Chairman of the Board of
Directors, President and Chief Executive Officer][Chief Operating Officer and
Secretary][Executive Vice President][Director] until the earlier of the
consummation by the Company of an Initial Business Combination or the
Liquidation Date. The undersigned's biographical information furnished to the
Company and attached hereto as EXHIBIT A is true and accurate in all respects,
does not omit any material information with respect to the undersigned's
background and contains all of the information required to be disclosed pursuant
to Section 401 of Regulation S-K, promulgated under the Securities Act of 1933,
as amended. The undersigned's NASD questionnaire furnished to the Company and
the Underwriters and attached hereto as EXHIBIT B is true and accurate in all
respects. The undersigned represents and warrants that:
(a) the undersigned is not subject to or a respondent in any
legal action for, any injunction, cease-and-desist order or order or
stipulation to desist or refrain from, any act or practice relating
to the offering of securities in any jurisdiction;
(b) the undersigned has never been convicted of or pleaded
guilty to any crime (i) involving any fraud or (ii) relating to any
financial transaction or handling of funds of another person, or
(iii) pertaining to any dealings in any securities and the
undersigned is not currently a defendant in any such criminal
proceeding; and
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(c) the undersigned has never been suspended or expelled from
membership in any securities or commodities exchange or association
or had a securities or commodities license or registration denied,
suspended or revoked.
4. [The undersigned agrees that, prior to the consummation of the Initial
Business Combination, he or she will not propose any amendment to Article Sixth
of the Company's Amended and Restated Certificate of Incorporation or support,
endorse or recommend any proposal that stockholders amend any of these
provisions.](1)
5. The undersigned has full right and power, without violating any
agreement by which he or she is bound (including, without limitation, any
non-competition or non-solicitation agreement with any employer or former
employer), to enter into this letter agreement and serve as [Chairman of the
Board of Directors, President and Chief Executive Officer][Chief Operating
Officer and Secretary][Executive Vice President][Director], and hereby consents
to being named in the Registration Statement as a[n] [officer] [director] of the
Company.
6. If the Company seeks approval of its stockholders of an Initial
Business Combination, the undersigned will:
(a) vote any Founder's Shares owned directly or indirectly by it in
accordance with the majority of the shares of Common Stock voted by the
Company's Public Stockholders in connection with the vote on any Initial
Business Combination; and
(b) vote all shares of Common Stock that he or she may acquire in or
following the IPO in favor of the Initial Business Combination.
7. The undersigned hereby waives any and all right, title, interest or
claim of any kind in or to any distributions of the Trust Account, or to any
other amounts distributed in connection with a liquidating distribution of the
Company, with respect to its Founder's Shares (any "Claim"), and hereby waives
any Claim the undersigned may have in the future as a result of, or arising out
of, any contracts or agreements with the Company and will not seek recourse
against the Trust Account for any reason whatsoever; PROVIDED that the foregoing
shall not apply to any IPO Shares acquired by the undersigned. The undersigned
hereby agrees that the Company shall be entitled to reimbursement from the
undersigned for any distribution of the Trust Account or any other amounts
distributed by the Company in connection with a liquidating distribution
received by the undersigned with respect to its Founder's Shares.
8. The undersigned hereby acknowledges and agrees that in addition to the
transfer restrictions set forth in (1) the Founder's Securities Purchase
Agreement, dated as of March 22, 2007 (the "Founder's Securities Purchase
Agreement"), by and between the Company and SP Acq LLC, (2) the Founder's Units
and Founder's Additional Warrants Purchase Agreement, dated as of June 25, 2007
(the "Director Purchase Agreement"), by and among the Company, SP Acq LLC and
each of the directors and (3) the Amended and Restated Warrant Agreement, dated
----------
(1) This paragraph applies only to directors of the Company.
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as of August 7, 2007, (the "Warrant Agreement") by and between the Company and
Continental Stock Transfer & Trust Company, it will not (A) offer, sell,
contract to sell, pledge, hypothecate, grant any option to purchase or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the participation in the filing of a registration
statement with the Securities and Exchange Commission in respect of, (B)
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, with respect to or (C) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of, or any securities convertible
into or exercisable or exchangeable for, or other rights to purchase, whether
any such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, any Securities (as defined in the Founder's
Securities Purchase Agreement), or publicly announce an intention to effect any
such transaction, for a period of one year from the date the Company completes
its initial business combination; provided, however, that notwithstanding
anything to the contrary in this paragraph 8, the undersigned may, at any time,
(i) transfer such Securities to Permitted Transferees (as defined in the Warrant
Agreement but subject to the terms of the Director Purchase Agreement) as
contemplated by the Founder's Securities Purchase Agreement, Director Purchase
Agreement and Warrant Agreement, as the case may be, (ii) transfer Director
Additional Founder's Warrants (as defined in the Director Purchase Agreement)
and Shares underlying such Director Additional Founder's Warrants after the
Company completes its initial business combination and (iii) exercise Director
Initial Founder's Warrants and Director Additional Founder's Warrants (each as
defined in Director's Purchase Agreement), each as contemplated by the Warrant
Agreement.
9. As used herein, (i) "Initial Business Combination" shall mean the
acquisition through a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or other similar business combination, of one or more
businesses or assets in connection with which the Company will require that a
majority of the shares of Common Stock voted by the Public Stockholders are
voted in favor of such acquisition and stockholders owning less than 30% of the
IPO Shares exercise their conversion rights; (ii) "Founder's Shares" shall mean
an aggregate of 7,500,000 shares of Common Stock owned by SP Acq LLC, which is
controlled by Xxxxxx X. Xxxxxxxxxxxx, and any shares received as dividends
thereon prior to the IPO, as well as Steel Partners II, L.P. and all of the
other Directors excluding Xxxxxx Xxxxxxxxxxxx; (iii) "IPO Shares" shall mean the
shares of Common Stock underlying the Units issued in the Company's IPO; (iv)
"Public Stockholders" shall mean purchasers of Common Stock in the IPO or in the
secondary market, including any of the Company's officers or directors or their
affiliates, including the undersigned, to the extent that they purchase or
acquire Common Stock in the IPO or the secondary market; and (v) "Trust Account"
shall mean the trust account established under the Investment Management Trust
Agreement, dated as of the date hereof, by and between the Company and
Continental Stock Transfer & Trust Company.
The undersigned acknowledges and understands that the Company and the
Underwriters will rely upon the agreements, representations and warranties set
forth herein in proceeding with the IPO. Nothing contained herein shall be
deemed to render the Underwriters a representative of, or a fiduciary with
respect to, the Company, its stockholders, or any creditor or vendor of the
Company with respect to the subject matter hereof.
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This letter agreement shall be binding on the undersigned and such
person's respective successors, heirs, personal representatives and assigns.
This letter agreement shall terminate on the earlier of (i) the consummation of
an Initial Business Combination and (ii) the Liquidation Date; PROVIDED that
such termination shall not relieve the undersigned from liability for any breach
of this agreement prior to its termination.
This letter agreement shall be governed by and interpreted and construed
in accordance with the laws of the State of New York applicable to contracts
formed and to be performed entirely within the State of New York, without regard
to the conflicts of law provisions thereof to the extent such principles or
rules would require or permit the application of the laws of another
jurisdiction.
No term or provision of this letter agreement may be amended, changed,
waived, altered or modified except by written instrument executed and delivered
by the party against whom such amendment, change, waiver, alteration or
modification is to be enforced.
[SIGNATURE PAGE FOLLOWS]
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[Name]
Accepted and agreed:
SP ACQUISITION HOLDINGS, INC.
By:
-------------------------
Name:
Title:
Exhibit A
[Biographical Information Furnished to the Company]
A-1
Exhibit B
[NASD Questionnaires Furnished to the Company and the Underwriters]
B-1
