Exhibit 10.7
July __, 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 20 trading days
following the earlier to occur of the expiration of the underwriters'
over-allotment option or its exercise in full unless Xxxxxx Xxxxxx & Co. Inc.,
as representative of the underwriters ("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 order for Xxxxxx Xxxxxx to purchase 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 each on a not-held
basis, 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 (or such other broker dealer(s) as Xxxxxx Xxxxxx may
assign the order to) agrees to fill such order in such amounts and at such times
as it may determine, in its sole discretion, during the forty trading-day period
commencing on the Separation Date. Each order will be a limit order under NASD
rules governing such orders. Xxxxxx Xxxxxx further agrees that it will not
charge the undersigned any fees and/or commissions with respect to such purchase
obligation.
Each of the undersigned may notify Xxxxxx Xxxxxx that all or part of
the Maximum Warrant Purchase will be made by one or more affiliates of the
undersigned who (or which) has an account at Xxxxxx Xxxxxx and, in such event,
Xxxxxx Xxxxxx will make such purchase on behalf of said affiliate; 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 fails to make such payment or
purchase.
Each of the undersigned agrees that neither he nor any affiliate 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.
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
