INSIDER WARRANT PURCHASE AGREEMENT
Exhibit
10.2
This
INSIDER WARRANT PURCHASE AGREEMENT, dated as of January 18, 2008 (this
“Agreement”), is entered into by and between Open Acquisition Corp., a
Delaware corporation (the “Company”), and Open Acq LLC, a Delaware
limited liability company (the “Sponsor”).
WHEREAS,
the Company is proposing to file a registration statement (the “Registration
Statement”) on Form S-1 under the Securities Act of 1933, as amended (the
“Securities Act”) with the Securities and Exchange Commission in
connection with a proposed initial public offering (the “Initial Public
Offering”) of 12,500,000 units (“Units”), each consisting of one
share of common stock of the Company, par value $0.0001 per
share (“Common Stock”), and one warrant to purchase one
additional share of Common Stock for $7.50 (a “Warrant”), subject to the
terms and conditions set forth in the Registration Statement; and
WHEREAS,
the Company desires to issue and sell, and the Sponsor desires to purchase
an
aggregate of 3,500,000 Warrants in a private placement to occur on or prior
to
the effectiveness of the Initial Public Offering;
NOW,
THEREFORE, for and in consideration of the promises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Purchase
and Sale of the Insider Warrants. On or prior to the date of
effectiveness of the initial public offering, the Company shall issue and sell
to the Sponsor, and the Sponsor shall purchase from the Company, an aggregate
of
3,500,000 Warrants (the “Insider Warrants”) at a purchase price of $1.00
per Insider Warrant for an aggregate purchase price of
$3,500,000. The terms of the Insider Warrants shall be set forth in a
Warrant Agreement to be entered into by and between the Company and Continental
Stock Transfer & Trust Company (or such other warrant agent as selected by
the Company), as warrant agent, which Warrant Agreement shall contain such
terms
and conditions with respect to the Insider Warrants as are contained in the
Registration Statement and such other terms as are typical in warrants
agreements of blank check companies (the “Warrant
Agreement”).
2. Closing
of Purchase and Sale. The closing of the purchase and sale of the
Insider Warrants hereunder, including payment for and delivery of the Insider
Warrants, shall take place at the offices of the Company or the Company’s legal
counsel on or prior to the effectiveness of the Initial Public
Offering. At the closing, the Company shall deliver to the Sponsor a
certificate evidencing the Insider Warrants, substantially in the form attached
as an exhibit to the Warrant Agreement, registered in the Sponsor’s name, upon
the payment of the aggregate purchase price therefor in immediately available
funds by delivery of a cashiers check or by wire transfer to an account
designated by the Company.
3. Registration
Rights. At the time of the closing of the Initial Public
Offering, the Company and the Sponsor shall enter into a registration rights
agreement pursuant to which the Company will grant certain registration rights
to the Sponsor relating to the Insider Warrants and the Common Stock issuable
upon exercise of the Insider Warrants.
4. Company
Representations and Warranties. In connection with the issuance
and sale of the Insider Warrants, the Company hereby represents and warrants
to
the Sponsor the following:
(a) Organization
and Corporate Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and the Company has all necessary corporate power and authority
to
enter into this Agreement and to consummate the transactions contemplated
hereby.
(b) Authorization;
No Breach. All corporate action necessary to be taken by the
Company to authorize the execution, delivery and performance of this Agreement
and all other agreements and instruments delivered by the Company in connection
with the transactions contemplated hereby has been duly and validly taken and
this Agreement has been duly executed and delivered by the
Company. This Agreement constitutes the valid, binding and
enforceable obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity). The issuance and sale
by the Company of the Insider Warrants does not conflict with the certificate
of
incorporation or by-laws of the Company or any material contract by which the
Company or its property is bound, or any federal or state laws or regulations
or
decree, ruling or judgment of any United States or state court applicable to
the
Company or its property.
(c) Title
to Securities. Upon issuance in accordance with, and payment
pursuant to, the terms hereof and the Warrant Agreement, the Common Stock
issuable upon exercise of the Insider Warrants will be duly and validly issued,
fully paid and nonassessable. Upon issuance in accordance with, and
payment pursuant to, the terms hereof and the Warrant Agreement, the Sponsor
will have good title to the Insider Warrants and the Common Stock issuable
upon
exercise of such Insider Warrants, free and clear of all liens, claims and
encumbrances of any kind, other than transfer restrictions hereunder and under
the other agreements contemplated hereby.
5. Sponsor
Representations and Warranties. In connection with the purchase
of the Insider Warrants, the Sponsor hereby represents and warrants to the
Company the following:
(a) Investment
Representations.
(i) The
Sponsor is familiar with the Company’s business plans and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Insider Warrants. The
Sponsor has been afforded the opportunity to ask questions of the executive
officers and directors of the Company. The Sponsor understands that
its investment in the Insider Warrants involves a high degree of
risk. The Sponsor has sought such accounting, legal and tax advice as
the Sponsor has considered necessary to make an informed investment decision
with respect to the Sponsor’s acquisition
of the Insider Warrants. The Sponsor has such knowledge and expertise
in financial and business matters, knows of the high degree of risk associated
with investments generally and particularly investments in the securities of
companies in the development stage such as the Company, is capable of evaluating
the merits and risks of an investment in the Insider Warrants, and is able
to
bear the economic risk of an investment in the Insider Warrants in the amount
contemplated hereunder. The Sponsor understands that there presently
is no public market for the Insider Warrants and none is anticipated to develop
in the foreseeable future. The Sponsor can afford a complete loss of
its investment in the Insider Warrants. The Sponsor is purchasing the
Insider Warrants for investment for the Sponsor’s own account only and not with
a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act; provided however the Company
acknowledges that certain of the Insider Warrants may ultimately be purchased
by
certain directors of the Company provided that such directors make the same
representations and warranties as are contained in this Agreement and any
agreement with the directors includes the same terms and conditions as are
contained in this Agreement.
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(ii) The
Sponsor understands that the Insider Warrants have not been registered under
the
Securities Act or any state securities law by reason of a specific exemption
therefrom, and that the Company is relying on the truth and accuracy of, and
the
Sponsor’s compliance with, the representations and warranties and agreements of
the Sponsor set forth herein to determine the availability of such exemptions
and the eligibility of the Sponsor to acquire such Insider Warrants, including,
but not limited to, the bona fide nature of the Sponsor’s investment intent as
expressed herein.
(iii) The
Sponsor further acknowledges and understands that the Insider Warrants must
be
held indefinitely unless the Insider Warrants are subsequently registered under
the Securities Act or an exemption from such registration is
available. The Sponsor understands that the certificates evidencing
the Insider Warrants will be imprinted with a legend that prohibits the transfer
of the Insider Warrants unless the Insider Warrants are registered or such
registration is not required in the opinion of counsel for the
Company.
(iv) The
Sponsor represents that the Sponsor is an “accredited investor” as that
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act.
(v) The
Sponsor did not decide to enter into this Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502(c) of the
Securities Act.
(vi) The
Sponsor understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation
or
endorsement of the Insider Warrants or the fairness or suitability
of the investment in the Insider Warrants, nor have such authorities passed
upon
or endorsed the merits of the offering of the Insider Warrants.
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(b) Organization
and Corporate Power. The Sponsor is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Sponsor has all necessary limited liability
company power and authority to enter into this Agreement and to consummate
the
transactions contemplated hereby.
(c) Authorization;
No Breach. All limited liability company action necessary to be
taken by the Sponsor to authorize the execution, delivery and performance of
this Agreement and all other agreements and instruments delivered by the Sponsor
in connection with the transactions contemplated hereby has been duly and
validly taken, and this Agreement has been duly executed and delivered by the
Sponsor. This Agreement constitutes the valid, binding and
enforceable obligation of the Sponsor, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
application now or hereafter in effect affecting the rights and remedies of
creditors and by general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity). The purchase by the
Sponsor of the Insider Warrants does not conflict with the organizational
documents of the Sponsor or with any material contract by which the Sponsor
or
its property is bound, or any laws or regulations or decree, ruling or judgment
of any court applicable to the Sponsor or its property.
6. Survival
of Representations and Warranties. All of the representations and
warranties contained herein shall survive the closing date of the purchase
and
sale of the Insider Warrants.
7. Transfer
and Redemption Restrictions.
(a) Transfer
Restrictions. The Sponsor hereby acknowledges and agrees to be
bound by the transfer restrictions set forth in the Warrant
Agreement.
(b) Redemption. Each
of the Company and the Sponsor hereby acknowledges and agrees that,
notwithstanding a call for redemption of the Insider Warrants by the Company
in
accordance with the terms of the Warrant Agreement, no Insider Warrants held
by
the Sponsor or any of its Permitted Transferees (as defined in the Warrant
Agreement) at the time of such call for redemption shall be redeemable by the
Company.
8. Miscellaneous.
(a) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of law thereof.
(b) Further
Execution. The parties agree to take all such further action as
may reasonably be necessary to carry out and consummate this Agreement as soon
as practicable, and to take whatever steps may be necessary to obtain any
governmental approval in connection with or otherwise qualify the issuance
of
the Insider Warrants that are the subject of this Agreement.
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(c) Amendments. This
Agreement may not be amended, modified or waived, in whole or in part, except
by
an agreement in writing signed by each of the parties hereto.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first written above.
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COMPANY:
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By:
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/s/ Xxxxxxx X. Xxxxxxxxx | ||
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Name:
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Xxxxxxx
X. Xxxxxxxxx
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Title:
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President
and Chief Executive Officer
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SPONSOR:
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OPEN
ACQ LLC
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By:
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/s/ Xxxxxx X. Xxxxxx | ||
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Name:
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Xxxxxx
X. Xxxxxx
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Title:
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Managing
Member
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