WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (this
“Agreement”) entered into as of the 20th day of
December, 2010, by and
between WRASP 34, Inc., a Delaware corporation with an address at 0000
Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx by the Xxx, XX 00000 (the
“Company”)
and Xxxxxx Xxxxxx (the
“Purchaser”).
WHEREAS,
the Purchaser desires to purchase, and the Company desires to sell, a warrant in
the form attached hereto as Exhibit A (the “Warrant”) to purchase
287,137 shares (the “Shares”) of the
Company’s common stock, par value $.0001 per share (the “Common Stock”), upon
the terms and conditions hereof; and
WHEREAS,
the Purchaser agrees that the Shares shall be subject to a repurchase option by
the Company in accordance with the terms and conditions described in Section 1.2
herein; and
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the Purchaser and the Company hereby agree as follows:
SECTION
1: SALE OF THE WARRANT
1.1 Sale of the
Warrant. Subject to the terms and conditions hereof, the
Company will sell and deliver to the Purchaser and the Purchaser will purchase
from the Company, upon the execution and delivery hereof, the Warrant for a
purchase price equal to $101.13 (the “Purchase
Price”).
1.2 Repurchase
Option. (a) Anytime
following the date of this Agreement (the “Repurchase Period”), the Company
shall have an irrevocable, exclusive option, but not the obligation, to
repurchase all or any portion of the Warrant or any shares of Common Stock
underlying the Warrant (to the extent repurchased, the “Repurchased
Securities”), in accordance with Section 1.2(b) herein (the "Repurchase
Option"). The Repurchase Option shall be exercisable at a price equal to
(i) two times the sum of (a) the Purchase Price and (b) any advances and
additional cash contributions to capital made by a Purchaser (ii) less any
amounts paid to Purchaser in connection with the Repurchase of any shares of
Common Stock of the Purchaser by the Company (the "Repurchase Price"). The
Repurchase Option shall be exercisable by the Company, at any time, by
delivering written notice (the “Repurchase Notice”) to such Purchaser of its
election to exercise its Repurchase Option. The Repurchase Notice shall provide
(i) that the Company is exercising its Repurchase Option in connection with this
Agreement; (ii) the number of Warrants the Company is repurchasing and (iii) the
aggregate Repurchase Price to be paid for the Repurchased Securities. The
Repurchase Notice shall be accompanied by a check made out in the name of such
Purchaser, or other immediately available funds shall be provided, for an amount
equal to the Repurchase Price. Upon delivery of the Repurchase Notice and the
Repurchase Price, the Warrants so repurchased and all rights and interests
therein or relating thereto shall be deemed cancelled and the Company shall have
the right to retain and transfer to its own name the Repurchased Securities. The
Repurchase Option set forth in this Section may be assigned by the Company in
whole or in part in its sole discretion.
(b) If the Company shall exercise the
Repurchase Option, at any time during the Repurchase Period and the Company
consummates (i) a merger or other business combination with an operating
business or (ii) a transaction pursuant to which the Company ceases to be a
“shell company,” as defined by Rule 12b-2 under the Securities Exchange Act of
1934, as amended and a “blank check company,” as defined by Rule 419 of the
Securities Act of 1933, as amended (a transaction pursuant to clause (i) or (ii)
above, the “Business Combination”), upon written request from the Purchaser
delivered within 30 days after the consummation of the Business Combination, the
Company shall have the obligation to reissue to the Purchaser, in exchange for
such Purchaser paying the Company the Repurchase Price, such number of Warrants
as shall be necessary so that the Purchaser shall acquire (1) all of
the Repurchased Securities, if the Business Combination is consummated any time
during the 30 day period from the date that the Company repurchases the
Warrants; (2) two-thirds (2/3) of the Warrants, if the Business Combination is
consummated any time during the period beginning 31 days through and including
60 days from the date that the Company repurchases the Warrants; or (3)
one-third (1/3) of the Warrants, if the Business Combination is consummated any
time during the period beginning 61 days through and including 90 days from the
date that the Company repurchases the Warrants. If the Company shall consummate
a Business Combination at any time after the 90th day
that the Company has exercised the Repurchase Option, the Purchaser shall not
have the right to cause the Company to reissue any of the
Warrants. The number of Repurchased Securities to be reissued shall
be adjusted to the extent the number of outstanding shares of Common Stock or
the Company is adjusted at any time prior to the Business
Combination. For example, if current shareholders of the Company are
required to surrender and cancel any warrants to purchase shares of Common Stock
as a condition to the Business Combination, the number of Repurchased Securities
to be reissued shall be reduced on a pari passu basis. However, the
aggregate Repurchase Price will still be paid by the Purchaser upon issuance of
such readjusted number of Repurchased Securities.
SECTION
2: CLOSING DATE; DELIVERY
2.1 Closing
Date. The closing of the purchase and sale of the Warrant
hereunder (the “Closing”) shall be
held immediately following the execution and delivery of this
Agreement.
2.2 Delivery at Closing.
At the Closing, the Company will deliver to the Purchaser the Warrant in the
Purchaser’s name, representing the right to purchase the Shares to be purchased
by Purchaser hereunder, against payment of the Purchase Price.
SECTION
3: REPRESENTATIONS AND WARRANTIES OF PURCHASER
The
undersigned Purchaser hereby represents and warrants to the Company as
follows:
3.1 Transfer
Restrictions. Neither the Warrant, nor, upon issuance, the
Shares, has been registered under the Securities Act of 1933, as amended (the
“Securities
Act”) and cannot be sold or otherwise transferred without an effective
registration or an exemption therefrom, and as of the date hereof, may not be
sold pursuant to the exemptions provided by Section 4(1) of the Securities Act,
in accordance with the letter from Xxxxxxx X. Xxxxx, Chief of the Office of
Small Business Policy of the Securities and Exchange Commission’s Division of
Corporation Finance, to Xxx Worm of NASD Regulation, Inc., dated January 21,
2000.
3.2 Experience. The
Purchaser has such knowledge and experience in financial and business matters
that the Purchaser is capable of evaluating the merits and risks of investment
in the Company and of making an informed investment decision. The
Purchaser has adequate means of providing for the Purchaser's current needs and
possible future contingencies and the Purchaser has no need, and anticipates no
need in the foreseeable future, to sell the Warrant for which the Purchaser
subscribes or, upon issuance, the Shares. The Purchaser is able to
bear the economic risks of this investment and, consequently, without limiting
the generality of the foregoing, the Purchaser is able to hold the Warrant or,
upon issuance, the Shares, for an indefinite period of time and has sufficient
net worth to sustain a loss of the Purchaser's entire investment in the Company
in the event such loss should occur. Except as otherwise indicated herein, the
Purchaser is the sole party in interest as to its investment in the Company, and
it is acquiring the Warrant solely for investment for the Purchaser’s own
account and has no present agreement, understanding or arrangement to subdivide,
sell, assign, transfer or otherwise dispose of all or any part of the Warrant
subscribed for or, upon issuance, the Shares, to any other person.
3.3 Investment; Access to
Data. The Purchaser has carefully reviewed and understands the
risks of, and other considerations relating to, a purchase of the Warrant and
the underlying Shares and an investment in the Company. The Purchaser has been
furnished materials relating to the Company, the private placement of the
Warrants or anything else that it has requested and has been afforded the
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering and obtain any additional information which the
Company possesses or can acquire without unreasonable effort or
expense. Representatives of the Company have answered all inquiries
that the Purchaser has made of them concerning the Company, or any other matters
relating to the formation and operation of the Company and the offering and sale
of the Warrants. The Purchaser has not been furnished any offering
literature other than the materials that the Company may have provided at the
request of the Purchaser; and the Purchaser has relied only on such information
furnished or made available to the Purchaser by the Company as described in this
Section. The Purchaser is acquiring the Warrant for investment for the
Purchaser's own account, not as a nominee or agent and not with the view to, or
for resale in connection with, any distribution thereof. The
Purchaser acknowledges that the Company is a start-up company with no current
operations, assets or operating history, which may possibly cause a loss of
Purchaser’s entire investment in the Company.
3.4 Authorization. (a)
This Agreement, upon execution and delivery thereof, will be a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting enforcement of creditors' rights
generally.
(b) The
execution, delivery and performance by Purchaser of this Agreement and
compliance therewith and the purchase and sale of the Warrant will not result in
a violation of and will not conflict with, or result in a breach of, any of the
terms of, or constitute a default under, any provision of state or Federal law
to which Purchaser is subject, or any mortgage, indenture, agreement,
instrument, judgment, decree, order, rule or regulation or other restriction to
which the Purchaser is a party or by which the undersigned Purchaser is bound,
or result in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of Purchaser pursuant to any such
term.
3.5 Accredited
Investor. Purchaser is an accredited investor as defined in
Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended.
SECTION
4: MISCELLANEOUS
4.1 Governing
Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware, without regard to conflicts of laws principles
thereof.
4.2 Survival. The
terms, conditions and agreements made herein shall survive the
Closing.
4.3 Successors and
Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.
4.4 Entire Agreement; Amendment;
Waiver. This Agreement constitutes the entire and full
understanding and agreement between the parties and supersedes all prior oral or
written agreements and understandings with regard to the subject matter
hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by all
the parties hereto.
4.5 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together, shall constitute one
instrument.
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remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the
undersigned have hereunto set their hands as of the day and year first above
written.
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WRASP
34, INC.
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By:
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/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx
X. Xxxxxxxxx
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President
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PURCHASER
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/s/ Xxxxxx Xxxxxx
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Xxxxxx
Xxxxxx
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Exhibit
A
See Form
of Warrant attached as Exhibit 4.2 to this Registration
Statement.
