Exhibit 10.7
_________ __, 2005
Xxxxxx Xxxxxx & Co. Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Stone Arcade Acquisition Corporation
Gentlemen:
This letter will confirm the agreement of the undersigned to purchase
warrants ("Warrants") of Stone Arcade Acquisition Corporation ("Company")
included in the units ("Units") being sold in the Company's initial public
offering ("IPO") upon the terms and conditions set forth herein. Each Unit is
comprised of one share of Common Stock and two Warrants. The shares of Common
Stock and Warrants will not be separately tradeable until 90 days after the
effective date of the Company's IPO unless Xxxxxx Xxxxxx & Co. Inc. ("Xxxxxx
Xxxxxx") informs the Company of its decision to allow earlier separate trading.
Each of the undersigned agrees that this letter agreement constitutes an
irrevocable obligation by the undersigned to purchase through Xxxxxx Xxxxxx for
the undersigned's account, within the forty-trading day period commencing on the
date separate trading of the Warrants commences ("Separation Date"), as many
Warrants as are available for purchase at market prices not to exceed $.70 per
Warrant, subject to a maximum Warrant purchase obligation equal to the number of
Warrants set forth opposite their respective names below ("Maximum Warrant
Purchase"). Xxxxxx Xxxxxx agrees to fill such order in such amounts and at such
times as instructed by the undersigned, acting through a representative of the
undersigned (the "Representative"), during the forty trading-day period
commencing on the Separation Date. Xxxxxx Xxxxxx further agrees that it will not
charge the undersigned any fees and/or commissions with respect to such purchase
obligation.
The Representative may notify Xxxxxx Xxxxxx that all or part of the
Maximum Warrant Purchase will be made by one or more affiliates of the
undersigned (or another person or entity introduced to Xxxxxx Xxxxxx by the
undersigned (a "Designee")) who (or which) has an account at Xxxxxx Xxxxxx and,
in such event, Xxxxxx Xxxxxx will make such purchase on behalf of said affiliate
or Designee; provided, however, that the undersigned hereby agree to make
payment of the purchase price of such purchase and to fulfill their Maximum
Warrant Purchase in the event and to the extent that their affiliate or Designee
fails to make such payment or purchase.
Each of the undersigned agrees that neither he nor any affiliate or
Designee of his shall sell or transfer the Warrants until after the consummation
of a merger, capital stock exchange, asset acquisition or other similar business
combination with an operating business and acknowledges that, at the option of
Xxxxxx Xxxxxx, the certificates for such Warrants shall contain a legend
indicating such restriction on transferability. Each of the undersigned further
agrees to execute an agreement in form and substance reasonably satisfactory to
Xxxxxx Xxxxxx appointing the Representative and granting the Representative the
authority to act on behalf of the undersigned in connection with this agreement
Very truly yours, Maximum Warrant Purchase
------------------------
Xxxxx X. Xxxxx 1,100,000
------------------------
Xxxxxxx Xxxxxx 1,100,000
------------------------
Xxxx X. Xxxxxxx 600,000
------------------------
Xxxxxxxx X. Xxxxx 600,000
------------------------
Xxxxx X. Xxxxxx 600,000
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4,000,000
2
