WARRANT SUBSCRIPTION AGREEMENT
Exhibit 10.10
WARRANT
SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of this __ th day of
, 2010 by and among L&L Acquisition Corp., a Delaware corporation (the “Company”), having its
principal place of business at 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 and
each of the individuals whose names are set forth on the signature pages hereto under “Subscribers”
(the “Subscribers” and each, a “Subscriber”).
WHEREAS, the Company desires to sell on a private placement basis (the “Offering”) an
aggregate of 5,000,000 warrants (the “Warrants”) of the Company for a purchase price of $0.50 per
Warrant. Each Warrant is exercisable to purchase one share of Common Stock at an exercise price of
$11.50 per share during the period commencing on the later of: (i) one year from the date of the
prospectus relating to the Company’s IPO (as defined below) and (ii) 30 days following the
consummation of a Business Combination (as defined in Section 5 below) and expiring on the fifth
anniversary of the consummation of a Business Combination;
WHEREAS, Subscribers wish to purchase the Warrants and the Company wishes to accept such
subscriptions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Subscribers hereby agree as follows
1. Agreement to Subscribe
1.1. Purchase and Issuance of the Warrants. Upon the terms and subject to the
conditions of this Agreement, the Subscribers hereby agree to purchase from the Company, and the
Company hereby agrees to sell to the Subscribers, on the Closing Date (as hereinafter defined), the
Warrants for an aggregate purchase price of $2,666,667 (the “Purchase Price”) in such amounts as
are indicated next to each Subscriber’s name on Exhibit A attached hereto.
1.2. Delivery of the Purchase Price. Upon execution of this Agreement, the Subscribers
are hereby bound to fulfill their obligations hereunder and hereby irrevocably commit to deliver
into a trust account at a financial institution to be chosen by the Company, maintained by
Continental Stock Transfer & Trust Company, acting as Trustee, on the date of Closing (as
hereinafter defined), the Purchase Price in immediately available funds by certified bank check,
wire transfer or such other form of payment as shall be acceptable to the Trustee, in its sole and
absolute discretion, at the Closing.
1.3. Closing. The closing (the “Closing”) of the Offering, shall take place at the
offices of the Company, on or prior to the closing date of the Company’s initial public offering
(“IPO”) of 5,333,334 units of Common Stock and Warrants (the “Closing Date”).
1.4. Warrant Agreement. Each Warrant shall have the terms set forth in the Warrant
Agreement to be entered into by the Company and a warrant agent, in connection with the IPO (the
“Warrant Agreement”).
2. Representations and Warranties of the Subscribers
Each Subscriber represents and warrants to the Company solely as to such Subscriber that:
2.1. No Government Recommendation or Approval. Subscriber understands that no United
States federal or state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Company or the Offering of the Warrants or the shares
of common stock of the Company underlying the Warrants (the “Warrant Shares” and, collectively with
the Warrants, the “Securities”) or the fairness or suitability of the investment in the Securities
by the Subscribers nor have such authorities passed upon or endorsed the merits of the Offering.
2.2. Regulation D Offering. Subscriber represents that it is an “accredited investor”
as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended
(the “Securities Act”) and acknowledges the sale contemplated hereby is being made in reliance on a
private placement exemption to “Accredited Investors” within the meaning of Section 501(a) of
Regulation D under the Securities Act or similar exemptions under state law.
2.3. Intent. Subscriber is acquiring the Warrants and, upon exercise of the Warrants,
the Warrant Shares, solely for investment purposes, for its own account and not for the account or
benefit of any U.S. Person, and not with a view towards the distribution thereof and Subscriber has
no present arrangement to sell the Securities to or through any person or entity. Subscriber shall
not engage in hedging transactions with regard to the Warrants and the underlying securities unless
in compliance with the Securities Act.
2.4. Restrictions on Transfer. Subscriber acknowledges and understands the Warrants
are being offered in a transaction not involving a public offering in the United States within the
meaning of the Securities Act. The Securities have not been registered under the Securities Act or
any state securities law, and, if in the future Subscriber decides to offer, resell, pledge or
otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise
transferred only (A) pursuant to an effective registration statement filed under the Securities Act
or (B) pursuant to an exemption from the registration requirements of the Securities Act, and in
each case in accordance with any applicable securities laws of any state or any other jurisdiction.
Subscriber agrees that if any transfer of its Securities or any interest therein is proposed to be
made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the
Company an opinion of counsel satisfactory to the Company. Absent registration or an available
exemption from registration, Subscriber agrees it will not resell the Securities. Subscriber
further acknowledges that the Securities Exchange Commission (“SEC”) has taken the position that
promoters or affiliates of a blank check company and their transferees, both before and after a
Business Combination, are deemed to be “underwriters” under the Securities Act when reselling the
securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the
Securities Act would not be available for resale transactions of the Securities despite technical
compliance with the requirements of such Rule, and the Securities can be resold only through a
registered offering or in reliance upon another exemption from the registration requirements of the
Securities Act.
2.5. Sophisticated Investor.
(i) Subscriber is sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Warrants.
(ii) Subscriber is aware that an investment in the Warrants is highly speculative and subject
to substantial risks because, among other things, none of the Securities have been registered under
the Securities Act and therefore cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available. Subscriber is able to bear the economic
risk of its investment in the Securities for an indefinite period of time.
2.6. Independent Investigation. Subscriber, in making the decision to purchase the
Warrants, has relied upon an independent investigation of the Company and has not relied upon any
information or representations made by any third parties or upon any oral or written
representations or assurances from the Company, its officers, directors or employees or any other
representatives or agents of the Company, other than as set forth in this Agreement. Subscriber is
familiar with the business, operations and financial condition of the Company and has had an
opportunity to ask questions of, and receive answers from the Company’s officers and directors
concerning the Company and the terms and conditions of the offering of the Warrants and has had
full access to such other information concerning the Company as Subscriber has requested.
Subscriber confirms that all documents that it has requested have been made available and that
Subscriber has been supplied with all of the additional information concerning this investment
which it has requested.
2.7 Organization and Authority. Each Subscriber possesses all requisite power and
authority necessary to carry out the transactions contemplated by this Agreement.
2.8. Authority. This Agreement has been validly authorized, executed and delivered by
Subscriber and is a valid and binding agreement enforceable in accordance with its terms, subject
to the general principles of equity and to bankruptcy or other laws affecting the enforcement of
creditors’ rights generally.
2.9. No Conflicts. The execution, delivery and performance of this Agreement and the
consummation by the Subscriber of the transactions contemplated hereby do not violate, conflict
with or constitute a default under (i) if the Subscriber is a corporation, limited liability
company, partnership or other legal entity, such Subscriber’s origination documents, (ii) any
agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute,
rule or regulation to which Subscriber is subject, or any agreement, order, judgment or decree to
which Subscriber is subject.
2.10. No Legal Advice from Company. Subscriber acknowledges it has had the opportunity
to review this Agreement and the transactions contemplated by this Agreement and the other
agreements entered into between the parties hereto with Subscriber’s own legal counsel and
investment and tax advisors. Except for any statements or representations of the Company made in
this Agreement and the other agreements entered into between the parties hereto, Subscriber is
relying solely on such counsel and advisors and not on any statements or representations of the
Company or any of its representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the securities laws of any
jurisdiction.
2.11. Reliance on Representations and Warranties. Subscriber understands the Warrants
are being offered and sold to it in reliance on specific exemptions from the registration
requirements under the Securities Act, and analogous provisions in the laws and regulations of
various states, and that the Company is relying upon the truth and accuracy of, and such
Subscriber’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of Subscriber set forth in this Agreement in order to determine the applicability of
such provisions.
2.12. No Advertisements. Subscriber is not subscribing for the Warrants as a result of
or subsequent to any advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or presented at any
seminar or meeting.
2.13. Legend. Subscriber acknowledges and agrees the certificates evidencing the
Warrants and the Warrant Shares shall bear a restrictive legend (the “Legend”), in form and
substance as set forth in Section 4 hereof, prohibiting the offer, sale, pledge or transfer of the
securities, except (i) pursuant to an effective registration statement covering these securities
under the Securities Act or (ii) pursuant to an exemption from the registration requirements under
the Securities Act and such laws which, in the opinion of counsel for this Company, is available.
3. Representations and Warranties of the Company
The Company represents and warrants to the Subscribers that:
3.1. Valid Issuance of Capital Stock. The total number of shares of all classes of
capital stock which the Company has authority to issue is 100,000,000 shares of Common Stock and
1,000,000 shares of Preferred Stock. As of the date hereof, the Company has 1,437,500 shares of
Common Stock issued and outstanding (of which 187,500 shares are subject to forfeiture as described
in the registration statement related to the Company’s IPO) and no shares of Preferred Stock issued
and outstanding. All of the issued shares of capital stock of the Company have been duly
authorized, validly issued, and are fully paid and non-assessable.
3.2 Title to Warrants. Upon issuance in accordance with, and payment pursuant to, the
terms hereof and the Warrant Agreement, as the case may be, each of the Warrants and the Warrant
Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance in accordance
with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be,
Subscriber will have or receive good title to the Warrants, free and clear of all liens, claims and
encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other
agreements contemplated hereby and (ii) transfer restrictions under federal and state securities
laws.
3.2. Organization and Qualification. The Company is a corporation duly incorporated
and existing in good standing under the laws of the state of Delaware and has the requisite
corporate power to own its properties and assets and to carry on its business as now being
conducted.
3.3. Authorization; Enforcement. (i) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and to issue the Warrants
and upon exercise thereof, the Warrant Shares in accordance with the terms hereof, (ii) the
execution, delivery and performance of this Agreement by the Company and the consummation by it of
the transactions contemplated hereby have been duly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors or stockholders is
required, and (iii) this Agreement constitutes valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or
similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies
or by equitable principles of general application and except as enforcement of rights to indemnity
and contribution may be limited by federal and state securities laws or principles of public
policy.
3.4. No Conflicts. The execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not (i) result in a
violation of the Company’s Certificate of Incorporation or Bylaws, (ii) conflict with, or
constitute a default under any agreement, indenture or instrument to which the Company is a party
or (iii) any law statute, rule or regulation to which the Company is subject or any agreement,
order, judgment or decree to which the Company is subject. Other than any SEC or state securities
filings which may be required to be made by the Company subsequent to the Closing, and any
registration statement which may be filed pursuant thereto, the Company is not required under
federal, state or local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency or self-regulatory entity
in order for it to perform any of its obligations under this Agreement or issue the Warrants or the
Warrant Shares issuable upon exercise thereof in accordance with the terms hereof.
4. Legends
4.1. Legend. The Company will issue the Warrants, and when issued, the Warrant Shares,
purchased by each Subscriber in its respective name. The Securities will bear the following Legend
and appropriate “stop transfer” instructions:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL
FOR THIS CORPORATION, IS AVAILABLE.”
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
A SECURITIES ESCROW AGREEMENT (THE “AGREEMENT”) AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED DURING THE TERM OF THE ESCROW PERIOD (AS DEFINED IN THE AGREEMENT).”
4.2. Subscribers’ Compliance. Nothing in this Section 4 shall affect in any way each
Subscriber’s obligations and agreements to comply with all applicable securities laws upon resale
of the Securities.
4.3. Company’s Refusal to Register Transfer of the Securities. The Company shall
refuse to register any transfer of the Securities, if in the sole judgment of the Company such
purported transfer would not be made (i) pursuant to an effective registration statement filed
under the Securities Act, or (ii) pursuant to an available exemption from the registration
requirements of the Securities Act.
4.4 Registration Rights. Subscribers will be entitled to certain registration rights
which will be governed by a registration rights agreement (“Registration Rights Agreement”) to be
entered into with the Company on or prior to the consummation of the IPO.
5. Escrow. Upon consummation of the IPO, the holders of the Warrants shall enter into
a securities escrow agreement (the “Escrow Agreement”) with Continental Stock Transfer & Trust
Company, whereby the Warrants shall be held in escrow until 30 days following consummation of a
Business Combination (as defined therein) subject to certain restrictions as set forth in the
Escrow Agreement.
6. Securities Laws Restrictions. In addition to the restrictions contained in the
Escrow Agreement, each Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise
dispose of all or any part of the Securities unless, prior thereto (a) a registration statement on
the appropriate form under the Securities Act and applicable state securities laws with respect to
the Securities proposed to be transferred shall then be effective or (b) the Company shall have
received an opinion from counsel reasonably satisfactory to the Company, that such registration is
not required because such transaction complies with the Securities Act and the rules promulgated by
the SEC thereunder and with all applicable state securities laws.
7. Waiver of Liquidation Distributions. In connection with the Securities purchased
pursuant to this Agreement, and with respect to any Common Stock purchased by any Subscriber prior
to the private placement, such Subscriber hereby waives any and all right, title, interest or claim
of any kind in or to any distributions of the trust account, whether in connection with (i) the
exercise of redemption rights if the Company consummates a Business Combination or (ii) upon the
Company’s redemption of shares of Common Stock sold in the Company’s IPO upon the Company’s failure
to timely complete a Business Combination. For purposes of clarity, in the event Subscriber
purchases shares of Common Stock in the IPO or in the aftermarket, any additional shares so
purchased shall be eligible to receive the redemption value of such shares of Common Stock upon the
same terms offered to all other purchasers of Common Stock in the IPO. In no event will a
Subscriber have the right to exercise any Warrants prior to the later of: (i) one year from the
date of the prospectus relating to the Company’s IPO and (ii) 30 days following the consummation of
a Business Combination.
8. Forfeiture of Warrants.
8.1. Failure to Consummate Business Combination. The Warrants shall be forfeited to
the Company upon the dissolution of the Company in the event that the Company does not consummate a
Business Combination within 18 months from the consummation of the IPO.
8.2. Termination of Rights as Holder; Escrow. If the Warrants are forfeited in
accordance with this Section 8, then after such time the Subscribers (or successor in interest),
shall no longer have any rights as a holder of such Warrants, and the Company shall take such
action as is appropriate to cancel such Warrants. To effectuate the foregoing, all certificates
representing the Warrants shall be held in escrow as provided in Section 5 hereof. In addition,
each Subscriber hereby irrevocably grants the Company a limited power of attorney for the purpose
of effectuating the foregoing and agrees to take any and all measures reasonably requested by the
Company necessary to effect the foregoing.
9. Rescission Right Waiver and Indemnification.
9.1. Each Subscriber understands and acknowledges an exemption from the registration
requirements of the Securities Act requires there be no general solicitation of purchasers of the
Warrants. In this regard, if the IPO were deemed to be a general solicitation with respect to the
Warrants, the offer and sale of such Warrants may not be exempt from registration and, if not,
each Subscriber may have a right to rescind its purchase of the Warrants. In order to facilitate
the completion of the Offering and in order to protect the Company, its stockholders and the trust
account from claims that may adversely affect the Company or the interests of its stockholders,
each Subscriber hereby agrees to waive, to the maximum extent permitted by applicable law, any
claims, right to xxx or rights in law or arbitration, as the case may be, to seek rescission of its
purchase of the Warrants. Each Subscriber acknowledges and agrees this waiver is being made in
order to induce the Company to sell the Warrants to such Subscriber. Each Subscriber agrees the
foregoing waiver of rescission rights shall apply to any and all known or unknown actions, causes
of action, suits, claims or proceedings (collectively, “Claims”) and related losses, costs,
penalties, fees,
liabilities and damages, whether compensatory, consequential or exemplary, and expenses in
connection therewith, including reasonable attorneys’ and expert witness fees and disbursements and
all other expenses reasonably incurred in investigating, preparing or defending against any Claims,
whether pending or threatened, in connection with any present or future actual or asserted right to
rescind the purchase of the Warrants hereunder or relating to the purchase of the Warrants and the
transactions contemplated hereby.
9.2. Each Subscriber agrees not to seek recourse against the trust account for any reason
whatsoever in connection with its purchase of the Warrants or any Claim that may arise now or in
the future.
9.3. Each Subscriber agrees that to the extent any waiver of rights under this Section 9 is
ineffective as a matter of law, each Subscriber has offered such waiver for the benefit of the
Company as an equitable right that shall survive any statutory disqualification or bar that applies
to a legal right. Each Subscriber acknowledges the receipt and sufficiency of consideration
received from the Company hereunder in this regard.
10. Terms of the Warrant
The Warrants are substantially identical to the warrants included in the units offered in the
IPO as set forth in the Warrant Agreement to be entered into with Continental Stock Transfer and
Trust Company on or prior to the closing of the IPO, except: (i) they will be placed in escrow and
not released before, except in limited circumstances, 30 days following the consummation of a
Business Combination, (ii) they are being purchased pursuant to an exemption from the registration
requirements of the Securities Act and will become freely tradable only after they are registered
pursuant to the Registration Rights Agreement to be signed on or before the date of the prospectus
relating to the Company’s IPO, and (iii) if held by the
original holders or their permitted assigns, (a) they will be
non-redeemable, (b) they will be exercisable on a
“cashless” basis and (c) with respect to the Warrants being
purchased by the underwriters of the IPO, they will expire five years
from the effective date of the registration statement for the units
sold in the IPO.
11. Governing Law; Jurisdiction; Waiver of Jury Trial
This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware for agreements made and to be wholly performed within such state. The parties hereto
hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement
and the transactions contemplated hereby.
12. Assignment; Entire Agreement; Amendment
12.1. Assignment. Neither this Agreement nor any rights hereunder may be assigned by
any party to any other person other than by a Subscriber to a person agreeing to be bound by the
terms hereof.
12.2. Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and merges and supersedes all
prior discussions, agreements and understandings of any and every nature among them.
12.3. Amendment. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.
12.4. Binding upon Successors. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal representatives, successors and
permitted assigns.
13. Notices; Indemnity
13.1 Notices. Unless otherwise provided herein, any notice or other communication to a
party hereunder shall be sufficiently given if in writing and personally delivered or sent by
facsimile or other electronic transmission with copy sent in another manner herein provided or sent
by courier (which for all purposes of this Agreement shall include Federal Express or other
recognized overnight courier) or mailed to said party by certified mail, return receipt requested,
at its address provided for herein or such other address as either may designate for itself in such
notice to the other. Communications shall be deemed to have been received when delivered
personally, on the scheduled arrival date when sent by next day or 2nd-day courier service, or if
sent by facsimile upon receipt of confirmation of transmittal or, if sent by mail, then three days
after deposit in the mail. If given by electronic
transmission, such notice shall be deemed to be delivered (a) if by electronic mail, when
directed to an electronic mail address at which the stockholder has consented to receive notice;
(b) if by a posting on an electronic network together with separate notice to the stockholder of
such specific posting, upon the later of (1) such posting and (2) the giving of such separate
notice; and (c) if by any other form of electronic transmission, when directed to the stockholder.
13.2 Indemnification. Each of the Subscribers and the Company agree to indemnify each
other against any loss, cost or damages (including reasonable attorney’s fees and expenses)
incurred as a result of such party’s breach of any representation, warranty, covenant or agreement
in this Agreement.
14. Counterparts
This Agreement may be executed in one or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
15. Survival; Severability
15.1. Survival. The representations, warranties, covenants and agreements of the
parties hereto shall survive the Closing.
15.2. Severability. In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that no such severability
shall be effective if it materially changes the economic benefit of this Agreement to any party.
16. Headings.
The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.
[remainder of page intentionally left blank]
This subscription is accepted by the Company on the __ day
of , 2010.
| L&L ACQUISITION CORP. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| SUBSCRIBERS: |
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| Xxxx X. Xxxxxxxx | ||||
| LLM STRUCTURED EQUITY FUND L.P. By: LLM Advisors L.P., its General Partner By: LLM Advisors LLC, its General Partner By: LLM Capital Partners LLC, its Manager |
||||
| By: | ||||
| Name: | Xxxxxxxxx X. Xxxxxxx, XX | |||
| Title: | Managing Director | |||
| LLM INVESTORS L.P. By: LLM Advisors L.P., its General Partner By: LLM Advisors LLC, its General Partner By: LLM Capital Partners LLC, its Manager |
||||
| By: | ||||
| Name: | Xxxxxxxxx X. Xxxxxxx, XX | |||
| Title: | Managing Director | |||
| E. Xxxxx Xxxx | ||||
| XXXXXX XXXXXX LLC
|
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| By: | ||||
| Name: | ||||
| Title: | ||||
| EARLYBIRDCAPITAL, INC.
|
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| By: | ||||
| Name: | ||||
| Title: | ||||
Signature Page to Warrant Subscription Agreement
Exhibit A
List of Subscribers
