January ___, 2011 RLJ Acquisition, Inc. Bethesda, Maryland 20814 Lazard Capital Markets LLC New York, New York 10020 Attn: General Counsel Re: Initial Public Offering Gentlemen:
January ___, 2011
0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Bethesda,
Maryland 20814
Lazard
Capital Markets LLC
00
Xxxxxxxxxxx Xxxxx
New York,
New York 10020
Attn:
General Counsel
Re: Initial Public Offering
Gentlemen:
This
letter (“Letter Agreement”) is being delivered to you in accordance with the
Underwriting Agreement (the “Underwriting Agreement”) entered into by and
between RLJ Acquisition, Inc., a Nevada corporation (the “Company”), and Lazard
Capital Markets LLC, as representative of the several underwriters (the
“Underwriters”), relating to an underwritten initial public offering (the
“Offering”), of 12,500,000 of the Company’s units (the “Units”), each comprised
of one share of the Company’s common stock, par value $0.0001 per share (the
“Common Stock”), and one warrant exercisable for one share of Common Stock
(each, a “Warrant”). The Units sold in the Offering shall be quoted and traded
on the Over-the-Counter Bulletin Board pursuant to a registration statement on
Form S-1 and prospectus (the “Prospectus”) filed by the Company with the
Securities and Exchange Commission (the “Commission”). Certain capitalized terms
used herein are defined in paragraph 13 hereof.
In order
to induce the Company and the Underwriters to enter into the Underwriting
Agreement and to proceed with the Offering and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned xxxxxx agrees with the Company as follows:
1. The
undersigned agrees that if the Company seeks stockholder approval of a proposed
Business Combination, then in connection with such proposed Business
Combination, it shall vote all Founder Shares in favor of such proposed Business
Combination.
2. The
undersigned hereby agrees that in the event that the Company fails to consummate
a Business Combination (as defined in the Underwriting Agreement) within 21
months from the closing of the Offering (or 27 months from the date of the
closing of the Offering if the Company executes a letter of intent, agreement in
principle or definitive agreement relating to a proposed initial Business
Combination before such 21-month period ends), he or she shall take all
reasonable steps to cause the Company to (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible, redeem 100% of
the Common Stock held by the Public Stockholders, at a per-share price, payable
in cash, equal to the aggregate amount including interest then on deposit in the
Trust Account, but net of any taxes payable (less up to $100,000 of such net
interest to pay reasonable expenses of dissolution), divided by the number of
shares of Common Stock then outstanding, together with the contingent right to
receive, in cash, following the Company’s dissolution, a pro rata share of the
balance of the Company’s net assets, if any, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s
remaining stockholders and the Company’s board of directors, dissolve and
liquidate, subject in each case to the Company’s obligations under Nevada law to
provide for claims of creditors and other requirements of applicable
law.
1
3. During
the period commencing on the effective date of the Underwriting Agreement and
ending 180 days after such date, the undersigned shall not (i) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
or establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder, with respect to any Units, shares of Common
Stock, Warrants or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock owned by him or her, (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of any Units, shares of Common
Stock, Warrants or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock owned by him or her, whether any such
transaction is to be settled by delivery of such securities, in cash or
otherwise, or (iii) publicly announce any intention to effect any transaction
specified in clause (i) or (ii). Notwithstanding foregoing, the
undersigned may transfer the Units, shares of Common Stock, Warrants or any
securities convertible into, or exercisable, or exchangeable for, shares of
Common Stock owned by him, her or it (i) to the Company’s officers or directors,
any affiliate or family member of any of the Company’s officers or directors or
any affiliate of the Sponsor; (ii) by gift to a member of the undersigned’s
immediate family or to a trust, the beneficiary of which is a member of the
undersigned’s immediate family, an affiliate of the undersigned or to a
charitable organization; (iii) by virtue of the laws of descent and distribution
upon death of the undersigned; (iv) pursuant to a qualified domestic relations
order; (v) in the event of the Company’s liquidation prior to the completion of
the Company’s initial Business Combination; or (vi) in the event that the
Company consummates a liquidation, merger, stock exchange or other similar
transaction that results in all of its stockholders having the right to exchange
their shares of the Common Stock for cash, securities or other property
subsequent to the consummation of the Company’s initial Business Combination;
provided, however, that, in the case of clauses (i) through (iv), these
permitted transferees enter into a written agreement with the Company agreeing
to be bound by the transfer restrictions in this paragraph 3.
2
4. In
the event of the liquidation of the Company, the Founder agrees to indemnify and
hold harmless the Company against any and all loss, liability, claim, damage and
expense whatsoever (including, but not limited to, any and all legal or other
expenses reasonably incurred in investigating, preparing or defending against
any litigation, whether pending or threatened, or any claim whatsoever) to which
the Company may become subject as a result of any claim by (i) any third party
for services rendered or products sold to the Company or (ii) a prospective
target business with which the Company has entered into an acquisition agreement
with (a “Target”); provided, however, that such indemnification of the Company
by the Founder shall apply only to the extent necessary to ensure that such
claims by a third party for services rendered (other than the Company’s
independent public accountants) or products sold to the Company or a Target do
not reduce the amount of funds in the Trust Account to below $9.95 per share of
the Common Stock sold in the Offering (the “Offering Shares”) (or approximately
$9.92 per Offering Share if the underwriters’ over-allotment option, as
described in the Prospectus, is exercised in full, or such pro rata amount in
between $9.92 and $9.95 per Offering Share that corresponds to the portion of
the over-allotment option that is exercised), and provided, further, that only
if such third party or Target has not executed an agreement waiving claims
against and all rights to seek access to the Trust Account whether or not such
agreement is enforceable. In the event that any such executed waiver is deemed
to be unenforceable against such third party, the Founder shall not be
responsible for any liability as a result of any such third party claims.
Notwithstanding any of the foregoing, such indemnification of the Company by the
Founder shall not apply as to any claims under the Company’s obligation to
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. The Founder shall have the right
to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of
notice of the claim to the Founder, the Founder notifies the Company in writing
that the Founder shall undertake such defense.
5.
(a) In
order to minimize potential conflicts of interest that may arise from multiple
corporate affiliations, the undersigned hereby agrees that until the earliest of
the Company’s initial Business Combination, liquidation or such time as he or
she ceases to be an officer of the Company, he or she shall present to the
Company for its consideration, prior to presentation to any other entity, any
business opportunity with an enterprise value of $100 million or more, subject
to any pre-existing fiduciary or contractual obligations he or she might
have.
(b) The
undersigned understands that the Company may effect a Business Combination with
a single target business or multiple target businesses simultaneously and agrees
that he or she will not participate in the formation of, or become an officer or
director of, any blank check company, until the Company has entered into a
definitive agreement regarding its initial Business Combination or the Company
has failed to complete an initial Business Combination within 21 months (or 27
months if a letter of intent, agreement in principle or definitive agreement
relating to a prospective Business Combination is executed before the 21-month
period ends), from the closing of the Offering; provided, however, that nothing
contained herein shall override the undersigned’s fiduciary obligations to any
entity with which he or she is currently directly or indirectly associated or
affiliated or by whom he or she is currently employed.
(c) The
undersigned hereby agrees and acknowledges that (i) each of the Underwriters and
the Company would be irreparably injured in the event of a breach by the
undersigned of his or her obligations under paragraphs 5(a) and/or 5(b) hereof,
(ii) monetary damages may not be an adequate remedy for such breach and (iii)
the non-breaching party shall be entitled to injunctive relief, in addition to
any other remedy that such party may have in law or in equity, in the event of
such breach.
3
6. The
undersigned’s biographical information furnished to the Company and attached
here as Exhibit A is true and accurate in all respects and does not omit any
material information with respect to the undersigned’s background. The
undersigned’s questionnaire furnished to the Company and attached hereto as
Exhibit B is true and accurate in all respects. The undersigned represents and
warrants that:
(a) the
undersigned is not subject to or a respondent in any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any
jurisdiction;
(b) the
undersigned has never been convicted of, or pleaded guilty to, any crime (i)
involving fraud, (ii) relating to any financial transaction or handling of funds
of another person, or (iii) pertaining to any dealings in any securities and the
undersigned is not currently a defendant in any such criminal proceeding;
and
(c) the
undersigned has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or
commodities license or registration denied, suspended or revoked.
7. Except
as disclosed in the Prospectus, neither the undersigned nor any affiliate of the
undersigned, shall receive any finder’s fee, reimbursement, consulting fee,
monies in respect of any repayment of a loan or other compensation prior to, or
in connection with any services rendered in order to effectuate the consummation
of the Company’s initial Business Combination (regardless of the type of
transaction that it is), other than the following:
(a) repayment
of a $225,000 loan made to the Company by the Founder, pursuant to a Promissory
Note dated November 18, 2010;
(b) payment
of an aggregate of $10,000 per month to the Sponsor, for office space,
secretarial and administrative services;
(c) reimbursement
for any reasonable out-of-pocket expenses related to identifying, investigating
and consummating an initial Business Combination, so long as no proceeds of the
Offering held in the Trust Account may be applied to the payment of such
expenses prior to the consummation of a Business Combination, except that the
Company may, for purposes of funding its working capital requirements (including
paying such expenses), receive from the Trust Account up to $2,000,000 in
interest income (net of franchise and income taxes payable), in the event the
underwriters’ over-allotment option in the Offering is not exercised in full, or
$2,300,000 in interest income (net of franchise and income taxes payable), if
the underwriters’ over-allotment option in the Offering is exercised in full
(or, if the over-allotment option is not exercised in full, but is exercised in
part, the amount in interest income (net of franchise and income taxes payable)
to be released shall be increased proportionally in relation to the proportion
of the over-allotment option which was exercised); and
4
(d) repayment
of loans, if any, and on such terms as to be determined by the Company from time
to time, made by the Sponsor or an affiliate of the Sponsor or certain of the
Company’s officers and directors to finance transaction costs in connection with
an intended initial Business Combination, provided, that, if the Company does
not consummate an initial Business Combination, a portion of the working capital
held outside the Trust Account may be used by the Company to repay such loaned
amounts so long as no proceeds from the Trust Account are used for such
repayment; provided, however, that the Company may, for purposes of funding its
working capital requirements (including repaying such loans), receive from the
Trust Account up to $2,000,000 in interest income (net of taxes payable on such
interest), in the event the underwriters’ over-allotment option in the Offering
is not exercised in full, or $2,300,000 in interest income (net of taxes payable
on such interest), if the underwriters’ over-allotment option in the Offering is
exercised in full (or, if the over-allotment option is not exercised in full,
but is exercised in part, the amount in interest income (net of taxes payable on
such interest) to be released shall be increased proportionally in relation to
the proportion of the over-allotment option which was exercised).
8. The
undersigned acknowledges and understands that the Underwriters and the Company
will rely upon the agreements, representations, and warranties set forth herein
in proceeding with the Offering.
9. The
undersigned authorizes any employer, financial institution, or consumer credit
reporting agency to release to the Representatives and its legal representatives
or agents (including any investigative search firm retained by the
Representatives) any information they may have about the undersigned’s
background and finances (“Information”), purely
for the purposes of the Offering (and shall thereafter hold such information
confidential). Neither the Representatives nor its agents shall be
violating the undersigned’s right of privacy in any manner in requesting and
obtaining the Information and the undersigned hereby releases them from
liability for any damage whatsoever in that connection.
10. The
undersigned acknowledges and agrees that the Company will not consummate any
Business Combination with any company with which the undersigned has had any
discussions, formal or otherwise, prior to the consummation of the IPO, with
respect to a Business Combination.
11. The
undersigned acknowledges and agrees that the Company will not consummate any
Business Combination which involves a company which is affiliated with any of
the Founders 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.
12. The
undersigned has full right and power, without violating any agreement to which
he or she is bound (including, without limitation, any non-competition or
non-solicitation agreement with any employer or former employer), to enter into
this Letter Agreement and to serve as an officer of the Company or as a director
on the board of directors of the Company, as applicable, and hereby consents to
being named in the Prospectus as an officer and/or as a director of the Company,
as applicable.
5
13. As
used in this Letter Agreement, (i) “Business Combination” shall mean a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination, involving the Company and one or more businesses;
(ii) “Founder” shall mean Xxxxxx X. Xxxxxxx; (iii) “Founder Shares” shall mean
the 3,593,750 shares of the Common Stock of the Company acquired by the Initial
Stockholders for an aggregate purchase price of $25,000, or approximately $0.007
per share, prior to the consummation of the Offering; (iv) “Public Stockholders”
shall mean the holders of securities issued in the Offering; (v) “Sponsor” shall
mean RLJ SPAC Acquisition, LLC; (vi) “Sponsor Warrants” shall mean the Warrants
to purchase up to 6,166,667 shares of the Common Stock of the Company that are
acquired by the Sponsor at a price per Warrant of $0.75 in a private placement
that shall occur simultaneously with the consummation of the Offering; and (vii)
“Trust Account” shall mean the trust fund into which a portion of the net
proceeds of the Offering will be deposited.
14. This
Letter Agreement, and the exhibits thereto, constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and
supersede all prior understandings, agreements, or representations by or among
the parties hereto, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby. This Letter
Agreement may not be changed, amended, modified or waived (other than to correct
a typographical error) as to any particular provision, except by a written
instrument executed by the parties hereto.
15. Neither
party may assign either this Letter Agreement or any of its rights, interests,
or obligations hereunder without the prior written consent of the other party.
Any purported assignment in violation of this paragraph shall be void and
ineffectual and shall not operate to transfer or assign any interest or title to
the purported assignee. This Letter Agreement shall be binding on the
undersigned and each of his or her heirs, personal representatives, successors
and assigns.
16. This
Letter Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflicts of
law principles that would result in the application of the substantive laws of
another jurisdiction. The parities hereto (i) agree that any action, proceeding,
claim or dispute arising out of, or relating in any way to, this Letter
Agreement shall be brought and enforced in the courts of New York, in the State
of New York, and irrevocably submits to such jurisdiction and venue, which
jurisdiction and venue shall be exclusive and (ii) waives any objection to such
exclusive jurisdiction and venue or that such courts represent an inconvenient
forum.
17. Any
notice, consent or request to be given in connection with any of the terms or
provisions of this Letter Agreement shall be in writing and shall be sent by
express mail or similar private courier service, by certified mail (return
receipt requested), by hand delivery or facsimile transmission.
6
18. This
Letter Agreement shall terminate on the earlier of (i) the expiration of the
Founder Lock-up Period, or (ii) the liquidation of the Company; provided,
however, that this Letter Agreement shall earlier terminate in the event that
the Offering is not consummated and closed by March 31, 2011.
[Signature page
follows]
7
Sincerely,
By:
_________________________
Name: Xxxxxx X.
Xxxxxxx
Acknowledged
and Agreed:
By:
_________________________
X. Xxx Xxxxxxxx
President and Chief Executive
Officer
[Signature Page to Insider Letter
Agreement for Founder]
Exhibit
A
(Attached)
Exhibit
B
(Attached)
