EXHIBIT 1.1
UNDERWRITING AGREEMENT
BETWEEN
AD.VENTURE PARTNERS, INC.
AND
WEDBUSH XXXXXX SECURITIES, INC.
DATED: _____________, 2005
AD.VENTURE PARTNERS, INC.
UNDERWRITING AGREEMENT
__________, 2005
Wedbush Xxxxxx Securities, Inc.
As Representative of the several Underwriters
0000 Xxxxxxxx Xxxxxxxxx, 00xx xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Dear Sirs:
The undersigned, Ad.Venture Partners, Inc., a Delaware corporation
("Company"), hereby confirms its agreement with Wedbush Xxxxxx Securities, Inc.
(being referred to herein variously as "you," "Wedbush" or the "Representative")
and with the other underwriters named on Schedule I hereto for which Wedbush is
acting as Representative (the Representative and the other Underwriters being
collectively called the "Underwriters" or, individually, an "Underwriter") as
follows:
1. Purchase and Sale of Securities.
1.1 Firm Securities.
1.1.1 Purchase of Firm Units. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell, severally and
not jointly, to the several Underwriters, an aggregate of 15,000,000 units
("Firm Units") of the Company, at a purchase price (net of discounts and
commissions) of $5.64 per Firm Unit. The Underwriters, severally and not
jointly, agree to purchase from the Company the number of Firm Units set forth
opposite their respective names on Schedule I attached hereto and made a part
hereof at a purchase price (net of discounts and commissions) of $5.64 per Firm
Unit. The Firm Units are to be offered initially to the public ("Offering") at
the offering price of $6.00 per Firm Unit. Each Firm Unit consists of one share
of the Company's common stock, par value $.0001 per share ("Common Stock"), and
two warrants ("Warrant(s)"). The shares of Common Stock and the Warrants
included in the Firm Units will not be separately transferable until the
earlier to occur of (i) the expiration of the Underwriter's option to purchase
up to 2,250,000 additional units to cover overallotments or (ii) 20 days after
the exercise in full or in part by the Underwriters, but in no event will
Wedbush allow separate trading before an audited balance sheet has been prepared
reflecting receipt by the Company of the proceeds of the Offering and filed with
the Securities and Exchange Commission (the "Commission") with a Current Report
on Form 8-K. Each Warrant entitles its holder to exercise it to purchase one
share of Common Stock for $5.00 during the period commencing on the later of the
consummation by the Company of its "Business Combination" or one year from the
effective date ("Effective Date") of the Registration Statement (as defined in
Section 2.1.1 hereof) and terminating on the five-year anniversary of the
Effective Date. "Business Combination" shall mean the acquisition by the
Company, whether by merger, capital stock exchange, asset or stock acquisition
or other similar type of transaction or a combination of the foregoing, of one
or more companies operating in the technology, media or telecommunications
industries (as described more fully in the Registration Statement).
1.1.2 Payment and Delivery. Delivery and payment for the Firm
Units shall be made at 1:00 P.M., New York time, on the third business day
following the effective date of the Registration Statement (or the fourth
business day following the effective date, if the Registration Statement is
declared effective after 4:30 p.m.) or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of the Representative
or at such other place as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm Units are called
"Closing Date." Payment for the Firm Units shall be made on the Closing Date at
the Representative's election by wire transfer in Federal (same day) funds or by
certified or bank cashier's check(s) in New York Clearing House funds, payable
as follows: $81,665,000 of the proceeds received by the Company for the Firm
Units shall be deposited in the trust fund established by the Company for the
benefit of the public stockholders as described in the Registration Statement
("Trust Fund") pursuant to the terms of an Investment Management Trust Agreement
("Trust Agreement") and the remaining
1.
proceeds shall be paid to the order of the Company upon delivery to you of
certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Units (or through the facilities of the Depository Trust
Company ("DTC")) for the account of the Underwriters. The Firm Units shall be
registered in such name or names and in such authorized denominations as the
Representative may request in writing at least two full business days prior to
the Closing Date. The Company will permit the Representative to examine and
package the Firm Units for delivery, at least one full business day prior to the
Closing Date. The Company shall not be obligated to sell or deliver the Firm
Units except upon tender of payment by the Representative for all the Firm
Units.
1.2 Over-Allotment Option.
1.2.1 Option Units. For the purposes of covering any
over-allotments in connection with the distribution and sale of the Firm Units,
the Underwriters are hereby granted, severally and not jointly, an option to
purchase up to an additional 2,250,000 units from the Company ("Over-allotment
Option"). Such additional 2,250,000 units are hereinafter referred to as "Option
Units." The Firm Units and the Option Units are hereinafter collectively
referred to as the "Units," and the Units, the shares of Common Stock and the
Warrants included in the Units and the shares of Common Stock issuable upon
exercise of the Warrants are hereinafter referred to collectively as the "Public
Securities." The purchase price to be paid for the Option Units will be the same
price per Option Unit as the price per Firm Unit set forth in Section 1.1.1
hereof.
1.2.2 Exercise of Option. The Over-allotment Option granted
pursuant to Section 1.2.1 hereof may be exercised by the Representative as to
all (at any time) or any part (from time to time) of the Option Units within 45
days after the Effective Date. The Underwriters will not be under any obligation
to purchase any Option Units prior to the exercise of the Over-allotment Option.
The Over-allotment Option granted hereby may be exercised by the giving of oral
notice to the Company by the Representative, which must be confirmed in writing
by overnight mail or facsimile transmission setting forth the number of Option
Units to be purchased and the date and time for delivery of and payment for the
Option Units (the "Option Closing Date"), which will not be later than five full
business days after the date of the notice or such other time as shall be agreed
upon by the Company and the Representative, at the offices of the Representative
or at such other place as shall be agreed upon by the Company and the
Representative. Upon exercise of the Over-allotment Option, the Company will
become obligated to convey to the Underwriters, and, subject to the terms and
conditions set forth herein, the Underwriters will become obligated to purchase,
the number of Option Units specified in such notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall
be made on the Option Closing Date at the Representative's election by wire
transfer in Federal (same day) funds or by certified or bank cashier's check(s)
in New York Clearing House funds, payable to the Trust Fund at the offices of
the Representative or at such other place as shall be agreed upon by the
Representative and the Company upon delivery to you of certificates
representing such securities (or through the facilities of DTC). The
certificates representing the Option Units to be delivered will be in such
denominations and registered in such names as the Representative requests not
less than two full business days prior to the Closing Date or the Option
Closing Date, as the case may be, and will be made available to the
Representative for inspection, checking and packaging at the aforesaid office
of the Company's transfer agent or correspondent not less than one full
business day prior to such Closing Date.
1.3 Representative's Purchase Option.
1.3.1 Purchase Option. The Company hereby agrees to issue and
sell to the Representative (and/or its designees) on the Effective Date an
option ("Representative's Purchase Option") for the purchase of up to an
aggregate of 750,000 units ("Representative's Units") for an aggregate purchase
price of $100. Each of the Representative's Units is identical to the Firm Units
except that the Warrants included in the Representative's Units
("Representative's Warrants") have an exercise price of $6.65 (133% of the
exercise price of the Warrants included in the Units sold to the public). The
Representative's Purchase Option shall be exercisable, in whole or in part,
commencing on the later of (i) one year from the Effective Date and (ii) the
consummation of a Business Combination and expiring on the five-year anniversary
of the Effective Date at an initial exercise price per Representative's Unit of
$7.50, which is equal to one hundred twenty five percent (125%) of the initial
public offering price of a Unit. The Representative's Purchase Option, the
Representative's Units, the Representative's Warrants and the shares of Common
Stock issuable upon exercise of the Representative's Warrants are hereinafter
2.
referred to collectively as the "Representative's Securities." The Public
Securities and the Representative's Securities are hereinafter referred to
collectively as the "Securities."
1.3.2 Payment and Delivery. Delivery and payment for the
Representative's Purchase Option shall be made on the Closing Date. The Company
shall deliver to the Underwriters, upon payment therefor, certificates for the
Representative's Purchase Option in the name or names and in such authorized
denominations as the Representative may request.
2. Representations and Warranties of the Company. The Company represents and
warrants to the Underwriters as follows:
2.1 Filing of Registration Statement.
2.1.1 Pursuant to the Act. The Company has filed with the
Commission a registration statement and an amendment or amendments thereto, on
Form S-1 (File No. 333-124141), including any related preliminary prospectus
("Preliminary Prospectus"), for the registration of the Public Securities under
the Securities Act of 1933, as amended ("Act"), which registration statement and
amendment or amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations ("Regulations") of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as of
such time pursuant to paragraph (b) of Rule 430A of the Regulations), is
hereinafter called the "Registration Statement," and the form of the final
prospectus dated the Effective Date included in the Registration Statement (or,
if applicable, the form of final prospectus filed with the Commission pursuant
to Rule 424 of the Regulations), is hereinafter called the "Prospectus." The
Registration Statement has been declared effective by the Commission on the date
hereof.
2.1.2 Pursuant to the Exchange Act. The Company has filed with
the Commission a Form 8-A (File Number 000- ) providing for the registration
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), of the
Units, the Common Stock and the Warrants. The registration of the Units, Common
Stock and Warrants under the Exchange Act has been declared effective by the
Commission on the date hereof.
2.2 No Stop Orders, Etc. Neither the Commission nor, to the best of the
Company's knowledge, any state regulatory authority has issued any order or
threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus or has instituted or, to the best of the Company's
knowledge, threatened to institute any proceedings with respect to such an
order.
2.3 Disclosures in Registration Statement.
2.3.1 10b-5 Representation. At the time the Registration
Statement became effective and at all times subsequent thereto up to the Closing
Date and the Option Closing Date, if any, the Registration Statement and the
Prospectus will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and will in all material
respects conform to the requirements of the Act and the Regulations; neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, on such dates, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement for the
registration of the Securities or any amendment thereto or pursuant to Rule
424(a) of the Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Act and the Regulations
and did not and will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Nothing has come to the attention of the Company that
has caused the Company to believe that the market-related data included in the
Registration Statement and the Prospectus is not based on or derived from
sources that are
3.
reliable and accurate (in accordance with the methodologies used to derive such
market-related data set forth in the underlying source material) in all material
respects.
2.3.2 Disclosure of Agreements. The agreements and documents
described in the Registration Statement and the Prospectus conform to the
descriptions thereof contained therein and there are no agreements or other
documents required to be described in the Registration Statement or the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a party
or by which its property or business is or may be bound or affected and (i) that
is referred to in the Prospectus, or (ii) is material to the Company's business,
has been duly and validly executed by the Company, is in full force and effect
and is enforceable against the Company and, to the Company's knowledge, the
other parties thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the federal and
state securities laws, and (z) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and none of such agreements or instruments has been assigned by
the Company, and neither the Company nor, to the best of the Company's
knowledge, any other party is in breach or default thereunder and, to the best
of the Company's knowledge, no event has occurred that, with the lapse of time
or the giving of notice, or both, would constitute a breach or default
thereunder. To the best of the Company's knowledge, performance by the Company
of the material provisions of such agreements or instruments will not result in
a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including,
without limitation, those relating to environmental laws and regulations.
2.3.3 Prior Securities Transactions. No securities of the
Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by, or under common control
with the Company since the formation of the Company, except as disclosed in the
Registration Statement.
2.3.4 Regulations. The disclosures in the Registration
Statement concerning the effects of Federal, State and local regulation on the
Company's business as currently contemplated are correct in all material
respects and do not omit to state a material fact.
2.4 Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Change. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise specifically stated therein, (i) there has been
no material adverse change in the condition, financial or otherwise, or business
prospects of the Company, (ii) there have been no material transactions entered
into by the Company, other than as contemplated pursuant to this Agreement, and
(iii) no member of the Company's management has resigned from any position with
the Company.
2.4.2 Recent Securities Transactions, Etc. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, and except as may otherwise be indicated or contemplated
herein or therein, the Company has not (i) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money; or (ii)
declared or paid any dividend or made any other distribution on or in respect to
its equity securities.
2.5 Independent Accountants. Xxxxxx LLP ("Xxxxxx"), whose report is
filed with the Commission as part of the Registration Statement, are independent
accountants as required by the Act and the Regulations. Xxxxxx has not, during
the periods covered by the financial statements included in the Prospectus,
provided to the Company any non-audit services, as such term is used in Section
10A(g) of the Exchange Act.
2.6 Financial Statements. The financial statements, including the notes
thereto and supporting schedules included in the Registration Statement and
Prospectus, fairly present the financial position, the results of operations and
the cash flows of the Company at the dates and for the periods to which they
apply; and such financial statements have been prepared in conformity with
United States generally accepted accounting principles
4.
("GAAP"), consistently applied throughout the periods involved. The Registration
Statement discloses all material off-balance sheet transactions, arrangements,
obligations (including contingent obligations), and other relationships of the
Company with unconsolidated entities or other persons that may have a material
current or future effect on the Company's financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses.
2.7 Authorized Capital; Options; Etc. The Company had at the date or
dates indicated in the Prospectus duly authorized, issued and outstanding
capital stock as set forth in the Registration Statement and the Prospectus.
Based on the assumptions stated in the Registration Statement and the
Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or contemplated by,
the Registration Statement and the Prospectus, on the Effective Date and on the
Closing Date, there will be no options, warrants, or other rights to purchase or
otherwise acquire any authorized but unissued shares of Common Stock of the
Company or any security convertible into shares of Common Stock of the Company,
or any contracts or commitments to issue or sell shares of Common Stock or any
such options, warrants, rights or convertible securities.
2.8 Valid Issuance of Securities; Etc.
2.8.1 Outstanding Securities. All issued and outstanding
securities of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in violation of the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The authorized Common Stock conforms
to all statements relating thereto contained in the Registration Statement and
the Prospectus. The offers and sales of the outstanding Common Stock were at all
relevant times either registered under the Act and the applicable state
securities or Blue Sky laws or, based in part on the representations and
warranties of the purchasers of such shares of Common Stock, exempt from such
registration requirements.
2.8.2 Securities Sold Pursuant to this Agreement. The
Securities have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable; the holders thereof are not and
will not be subject to personal liability by reason of being such holders; the
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements with
respect thereto contained in the Registration Statement. When issued, the
Representative's Purchase Option, the Representative's Warrants and the Warrants
will constitute valid and binding obligations of the Company to issue and sell,
upon exercise thereof and payment of the respective exercise prices therefor,
the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative's Purchase Option, the
Representative's Warrants and the Warrants are enforceable against the Company
in accordance with their respective terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
2.9 Registration Rights of Third Parties. Except as set forth in the
Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity and Binding Effect of Agreements. This Agreement, the
Warrant Agreement (as defined in Section 2.21 hereof), the Trust Agreement (as
defined in Section 2.22 hereof), those certain letter agreements (each
substantially in the form filed as Exhibits 10._ to the Registration Statement),
pursuant to which each of the Initial Stockholders agrees to certain matters,
including but not limited to, certain matters described as being agreed to by
them under the "Proposed Business" section of the Prospectus ("Insider
Letters"), those certain letter agreements (each substantially in the form filed
as Exhibit __ to the Registration Statement), pursuant to which each of the
Initial Stockholders agrees to purchase a certain number of the Company's
warrants after the Offering as
5.
described under the "Principal Stockholders" section of the Prospectus ("Warrant
Purchase Commitment Letters"), and those certain lock-up agreements (each
substantially in the form filed as Exhibit __ to the Registration Statement),
whereby the Common Stock owned by the Initial Stockholders will be subject to
the lock-up until six-months after the consummation of an initial Business
Combination (as defined in the Registration Statement) ("Lock-Up Agreements"),
the Representative's Purchase Option and the Services Agreement (as defined in
Section 2.27 hereof) have been duly and validly authorized by the Company and
constitute the valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (ii) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.11 No Conflicts, Etc. The execution, delivery, and performance by the
Company of this Agreement, the Warrant Agreement, the Representative's Purchase
Option, the Trust Agreement, the Insider Letters, the Services Agreement and the
Lock-up Agreements, the consummation by the Company of the transactions herein
and therein contemplated and the compliance by the Company with the terms hereof
and thereof do not and will not, with or without the giving of notice or the
lapse of time or both (i) result in a breach of, or conflict with any of the
terms and provisions of, or constitute a default under, or result in the
creation, modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms of
any agreement or instrument to which the Company is a party except pursuant to
the Trust Agreement referred to in Section 2.22 hereof; (ii) result in any
violation of the provisions of the Amended and Restated Certificate of
Incorporation or the Bylaws of the Company; or (iii) violate any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or business.
2.12 No Defaults; Violations. No material default exists in the due
performance and observance of any term, covenant or condition of any material
license, contract, indenture, mortgage, deed of trust, note, loan or credit
agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not in violation
of any term or provision of its Amended and Restated Certificate of
Incorporation or Bylaws or in violation of any material franchise, license,
permit, applicable law, rule, regulation, judgment or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or businesses.
2.13 Corporate Power; Licenses; Ownership.
2.13.1 Conduct of Business. The Company has all requisite
corporate power and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies that it needs as of the date hereof to conduct
its business and to consummate a Business Combination as described in the
Prospectus. The disclosures in the Registration Statement concerning the effects
of federal, state and local regulation on this offering and the Company's
business purpose as currently contemplated are correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
2.13.2 Transactions Contemplated Herein. The Company has all
corporate power and authority to enter into this Agreement and to carry out the
provisions and conditions hereof, and all consents, authorizations, approvals
and orders required in connection therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery, of the
Securities and the consummation of the transactions and agreements contemplated
by this Agreement, the Warrant Agreement, the Representative's Purchase Option,
the Trust Agreement, the Insider Letters, the Services Agreement, and the
Lock-up Agreements and as contemplated by the Prospectus, except with respect to
applicable federal and state securities laws.
6.
2.13.3 Ownership. Except as set forth in the Prospectus, the
Company owns or has valid leasehold interests in all material properties and
assets required for the operation of its business as now conducted or as
presently proposed to be conducted, including those described in the
Registration Statement and the Prospectus as being owned by it; and the Company
has good and marketable title to all properties and assets owned by it material
to its business in each case free from liens, encumbrances and defects that
would materially affect the value thereof or materially interfere with the use
made or to be made thereof by the Company or its subsidiaries. All real property
leases to which the Company or any of its subsidiaries is a party are valid,
subsisting and, to the knowledge of the Company, enforceable by the Company or
such subsidiary, in each case with no exceptions that would materially interfere
with the use made or to be made thereof by the Company or its subsidiaries and
each of the Company and its subsidiaries enjoys peaceful and undisturbed
possession under all such leases to which it is a party as lessee. The Company
owns or possesses, or can acquire on a timely basis and on commercially
reasonable terms, all material trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property necessary for the Company's purpose as currently
contemplated.
2.14 D&O Questionnaires. To the best of the Company's knowledge, all
information contained in the director and officer questionnaires and NASD
supplemental questionnaires ("Questionnaires") completed by each of the
Company's stockholders immediately prior to the Offering ("Initial
Stockholders") and provided to the Underwriters as an exhibit to his or her
Insider Letter (as defined in Section 2.10) is true and correct and the Company
has not become aware of any information which would cause the information
disclosed in the questionnaires completed by each Initial Stockholder to become
inaccurate and incorrect.
2.15 Litigation; Governmental Proceedings. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the best of the Company's knowledge, threatened
against, or involving the Company or, to the best of the Company's knowledge,
any Initial Stockholder, which has not been disclosed in the Registration
Statement or the Questionnaires, except for actions, suits, proceedings,
inquiries, arbitrations, investigations, litigation or government proceedings
pending against any Initial Stockholder that would not individually or in the
aggregate have a material adverse effect on such Initial Stockholder, the
Company or the Offering.
2.16 Good Standing. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its state of
incorporation, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification, except where
the failure to qualify would not have a material adverse effect on the Company.
2.17 Stop Orders. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or any part
thereof.
2.18 Transactions Affecting Disclosure to NASD.
2.18.1 Finder's Fees. Except as described in the Prospectus,
there are no claims, payments, arrangements, agreements or understandings
relating to the payment of a finder's, consulting or origination fee by the
Company or any Initial Stockholder with respect to the sale of the Securities
hereunder or any other arrangements, agreements or understandings of the Company
or, to the best of the Company's knowledge, any Initial Stockholder that may
affect the Underwriters' compensation, as determined by the National Association
of Securities Dealers, Inc. ("NASD").
2.18.2 Payments Within Twelve Months. The Company has not made
any direct or indirect payments (in cash, securities or otherwise) (i) to any
person, as a finder's fee, consulting fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who
raised or provided capital to the Company, (ii) to any NASD member or (iii) to
any person or entity that has any direct or indirect affiliation or association
with any NASD member, within the twelve months prior to the Effective Date.
7.
2.18.3 Use of Proceeds. None of the net proceeds of the
Offering will be paid by the Company to any participating NASD member or its
affiliates, except as specifically authorized herein and except as may be paid
in connection with a Business Combination as contemplated by the Prospectus.
2.18.4 Insiders' NASD Affiliation. Based on the Questionnaires
distributed to such persons, except as set forth on Schedule 2.18.4, no officer,
director or any beneficial owner of the Company's unregistered securities has
any direct or indirect affiliation or association with any NASD member. The
Company will advise the Representative and its counsel if it learns that any
officer, director or owner of at least 5% of the Company's outstanding Common
Shares is or becomes an affiliate or associated person of an NASD member
participating in the Offering.
2.19 Foreign Corrupt Practices Act. Neither the Company nor any of the
Initial Stockholders or any other person acting on behalf of the Company has,
directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or any political party or candidate for office
(domestic or foreign) or other person who was, is, or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) that (i) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or proceeding, (ii)
if not given in the past, might have had a material adverse effect on the
assets, business or operations of the Company as reflected in any of the
financial statements contained in the Prospectus or (iii) if not continued in
the future, might adversely affect the assets, business, operations or prospects
of the Company. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply with the Foreign Corrupt Practices Act
of 1977, as amended.
2.20 Officers' Certificate. Any certificate signed by any duly
authorized officer of the Company and delivered to you or to your counsel shall
be deemed a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.
2.21 Warrant Agreement. The Company has entered into a warrant
agreement with respect to the Warrants and the Representative's Warrants with
Continental Stock Transfer & Trust Company substantially in the form filed as
Exhibit ____ to the Registration Statement ("Warrant Agreement").
2.22 Investment Management Trust Agreement. The Company has entered
into the Trust Agreement with respect to certain proceeds of the Offering
substantially in the form filed as Exhibit ____ to the Registration Statement
("Trust Agreement").
2.23 Covenants Not to Compete. To the best of the Company's knowledge,
no Initial Stockholder, employee, officer or director of the Company is subject
to any noncompetition agreement or non-solicitation agreement with any employer
or prior employer which could materially affect his ability to be an Initial
Stockholder, employee, officer and/or director of the Company.
2.24 Investments. No more than 45% of the "value" (as defined in
Section 2(a)(41) of the Investment Company Act of 1940 ("Investment Company
Act")) of the Company's total assets consist of, and no more than 45% of the
Company's net income after taxes is derived from, securities other than
"Government securities" (as defined in Section 2(a)(16) of the Investment
Company Act).
2.25 Subsidiaries. The Company does not own an interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business entity.
2.26 Related Party Transactions. There are no business relationships or
related party transactions involving the Company or any other person required to
be described in the Prospectus that have not been described as required.
8.
2.27 Administrative Services. The Company has entered into an agreement
(the "Services Agreement") with eXact Advertising, LLC substantially in the form
annexed as Exhibit __ to the Registration Statement pursuant to which the
Affiliate will make available to the Company general and secretarial support for
the Company's use for $7,500 per month.
3. Covenants of the Company. The Company covenants and agrees as follows:
3.1 Amendments to Registration Statement. The Company will deliver to
the Representative, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the Representative
shall reasonably object in writing.
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is
required to be delivered under the Act, the Company will use all reasonable
efforts to comply with all requirements imposed upon it by the Act, the
Regulations and the Exchange Act and by the regulations under the Exchange Act,
as from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Public Securities in accordance with the provisions
hereof and the Prospectus. If at any time when a Prospectus relating to the
Public Securities is required to be delivered under the Act, any event shall
have occurred as a result of which, in the opinion of counsel for the Company or
counsel for the Underwriters, the Prospectus, as then amended or supplemented,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify the Representative promptly and prepare and file with the
Commission, subject to Section 3.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
3.2.2 Filing of Final Prospectus. The Company will file the
Prospectus (in form and substance satisfactory to the Representative) with the
Commission pursuant to the requirements of Rule 424 of the Regulations.
3.2.3 Exchange Act Registration. Until the earlier of five
years from the Effective Date or the date that the Company is liquidated, the
Company will use its best efforts to maintain the registration of the Units,
Common Stock and Warrants under the provisions of the Exchange Act. The Company
will not deregister the Units under the Exchange Act without the prior written
consent of Wedbush.
3.3 Blue Sky Filings. The Company will endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Public Securities for offering and
sale under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction. Until the earliest of (i) the date on which all
Underwriters shall have ceased to engage in market making activities in respect
of the Public Securities, (ii) the date on which the Public Securities are
listed or quoted, as the case may be, on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market (or any successor to such
entities) and (iii) the date of the liquidation of the Company (the period from
the Effective Date to such earliest date, the "Blue Sky Compliance Period"), in
each jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
3.4 Delivery to Underwriters of Prospectuses. The Company will deliver
to each of the several Underwriters, without charge, from time to time during
the period when the Prospectus is required to be delivered under the Act or the
Exchange Act, such number of copies of each Preliminary Prospectus and the
Prospectus as such Underwriters may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to you two original executed Registration Statements, including
9.
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed
consents of certified experts.
3.5 Effectiveness and Events Requiring Notice to the Representative.
The Company will use its best efforts to cause the Registration Statement to
remain effective until distribution of the Public Securities is complete and
will notify the Representative immediately and confirm the notice in writing
(i) of the effectiveness of the Registration Statement and any amendment
thereto, (ii) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceeding for that purpose, (iii) of
the issuance by any state securities commission of any proceedings for the
suspension of the qualification of the Public Securities for offering or sale
in any jurisdiction or of the initiation, or the threatening, of any proceeding
for that purpose, (iv) of the mailing and delivery to the Commission for filing
of any amendment or supplement to the Registration Statement or Prospectus, (v)
of the receipt of any comments or request for any additional information from
the Commission, and (vi) of the happening of any event during the period
described in Section 3.4 hereof that, in the judgment of the Company, makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If the Commission or any state securities commission shall enter a
stop order or suspend such qualification during any such time, the Company will
make every reasonable effort to obtain promptly the lifting of such order.
3.6 Affiliated Transactions.
3.6.1 Business Combinations. The Company will not consummate a
Business Combination with any entity which is affiliated with any Initial
Stockholder unless the Company obtains an opinion from an independent investment
banking firm that is a member of the NASD that the Business Combination is fair
to the Company's stockholders from a financial perspective.
3.6.2 Compensation. Except for payments made to eXact
Advertising, LLC as disclosed in the Prospectus, the Company shall not pay any
Initial Stockholder or any of their affiliates any fees or compensation from
the Company, for services rendered to the Company prior to, or in connection
with, the consummation of a Business Combination; provided that the Initial
Stockholders and their affiliates shall be entitled to reimbursement from the
Company for their reasonable out-of-pocket expenses incurred in connection with
seeking and consummating a Business Combination.
3.7 Secondary Market Trading and Standard & Poor's. During the Blue Sky
Compliance Period, and in any event no less than 60 days prior to the
consummation of a Business Combination, the Company will apply to be included in
Standard & Poor's Daily News and Corporation Records Corporate Descriptions for
a period of five years from the consummation of a Business Combination. Promptly
after the consummation of the Offering, the Company shall take such steps as may
be necessary to obtain a secondary market trading exemption for the Company's
securities in the State of California. The Company shall also take such other
action as may be reasonably requested by the Representative to obtain a
secondary market trading exemption in such other states as may be requested by
the Representative.
3.8 Reports to the Representative.
3.8.1 Periodic Reports, Etc. For a period of five years from
the Effective Date, the Company will furnish to the Representative and its
counsel copies of such financial statements and other periodic and special
reports as the Company from time to time furnishes generally to holders of any
class of its securities, and promptly furnish to the Representative (i) a copy
of each periodic report the Company shall be required to file with the
Commission, (ii) a copy of every press release and every news item and article
with respect to the Company or its affairs which was released by the Company,
(iii) a copy of each Current Report on Form 8-K and Schedules 13D, 13G, 14D-1 or
13E-4 received or prepared by the Company, (iv) five copies of each registration
statement filed by the Company with the Commission under the Securities Act, (v)
a copy of monthly statements, if any, setting forth such information regarding
the Company's results of operations and financial position (including balance
sheet, profit and loss statements and data regarding outstanding purchase
orders) as is regularly prepared by management of the Company and (vi) such
additional documents and information with respect to the Company and the affairs
of any future subsidiaries of the Company as the Representative may from time to
time reasonably request.
10.
3.8.2 Transfer Sheets. During the Blue Sky Compliance Period,
the Company shall retain a transfer and warrant agent acceptable to the
Representative ("Transfer Agent") and will furnish to the Underwriters at the
Company's sole cost and expense such transfer sheets of the Company's securities
as the Representative may request, including the daily and monthly consolidated
transfer sheets of the Transfer Agent and DTC. The Underwriters acknowledge that
Continental Stock Transfer & Trust Company is an acceptable Transfer Agent.
3.8.3 Secondary Market Trading Survey. Until such time as the
Public Securities are listed or quoted, as the case may be, on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market, the
Company shall engage Xxxxxxx XxXxxxxxx LLP, counsel to the Underwriters
("Xxxxxxx") to deliver and update to the Underwriters on a timely basis, but in
any event on the Effective Date and at the beginning of each fiscal quarter, a
written report detailing those states in which the Public Securities may be
traded in non-issuer transactions under the Blue Sky laws of the fifty States
("Secondary Market Trading Survey").
3.9 Payment of Expenses.
3.9.1 General Expenses Related to the Offering. The Company
hereby agrees to pay on each of the Closing Date and the Option Closing Date, if
any, to the extent not paid at the Closing Date, all expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to (i) the preparation (exclusive of the fees and expenses of
counsel to the Underwriters), printing, filing and mailing (including the
payment of postage with respect to such mailing) of the Registration Statement,
the Preliminary and Final Prospectuses and the printing and mailing of this
Agreement and related documents, including the cost of all copies thereof and
any amendments thereof or supplements thereto supplied to the Underwriters in
quantities as may be required by the Underwriters, (ii) the printing, engraving,
issuance and delivery of the Units, the shares of Common Stock and the Warrants
included in the Units and the Representative's Purchase Option, including any
transfer or other taxes payable thereon, (iii) the qualification of the Public
Securities under state or foreign securities or Blue Sky laws, including the
costs of preparing, printing and mailing the "Preliminary Blue Sky Memorandum,"
and all amendments and supplements thereto, the preparation of the Secondary
Market Trading Survey (as defined above), and the reasonable fees and
disbursements of Xxxxxxx related thereto; provided that the Company shall not be
required to reimburse the Representative or Xxxxxxx for any amounts under this
clause (iii) in excess of $50,000, (iv) filing fees, costs and expenses
(excluding fees and disbursements for the Representative's counsel) incurred in
registering the Offering with the NASD and the Commission, (v) fees and
disbursements of the Transfer Agent, (vi) the Company's expenses associated with
"due diligence" and "road show" meetings arranged by the Representative, and
(vii) all other costs and expenses customarily borne by an issuer incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 3.9.1. The Company also agrees that,
if requested by the Representative, it will engage and pay for an investigative
search firm of the Representative's choice to conduct an investigation of the
principals of the Company as shall be mutually selected by the Representative
and the Company. The Representative may deduct from the net proceeds of the
Offering payable to the Company on the Closing Date, or the Option Closing Date,
if any, the expenses set forth in this Agreement to be paid by the Company to
the Representative and others.
3.9.2 Nonaccountable Expenses. The Company further agrees
that, in addition to the expenses payable pursuant to Section 3.9.1, on the
Closing Date, it will pay to the Representative a nonaccountable expense
allowance equal to one percent (1%) of the gross proceeds received by the
Company from the sale of the Firm Units, by deduction from the proceeds of the
Offering contemplated herein.
3.10 Application of Net Proceeds. The Company will apply the net
proceeds from the Offering received by it in a manner consistent with the
application described under the caption "Use Of Proceeds" in the Prospectus.
3.11 Delivery of Earnings Statements to Security Holders. The Company
will make generally available to its security holders as soon as practicable,
but not later than the first day of the sixteenth full calendar month following
the Effective Date, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions of Rule
158(a) under Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
11.
3.12 [Notice to NASD. In the event any person or entity (regardless of
any NASD affiliation or association) is engaged to assist the Company in its
search for a merger candidate or to provide any other merger and acquisition
services, the Company will provide the following to the NASD and Wedbush prior
to the consummation of the Business Combination: (i) complete details of all
services and copies of agreements governing such services; and (ii)
justification as to why the person or entity providing the merger and
acquisition services should not be considered an "underwriter and related
person" with respect to the Company's initial public offering, as such term is
defined in Rule 2710 of the NASD's Conduct Rules. The Company also agrees that
proper disclosure of such arrangement or potential arrangement will be made in
the proxy statement which the Company will file for purposes of soliciting
stockholder approval for the Business Combination.]
3.13 Stabilization. Except with respect to the agreements between
Wedbush and the Initial Stockholders filed as Exhibits ____ through ____ to the
Registration Statement, neither the Company, nor, to its knowledge, any of its
employees, directors or stockholders (without the consent of Wedbush) has taken
or will take, directly or indirectly, any action designed to or that has
constituted or that might reasonably be expected to cause or result in, under
the Exchange Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Units.
3.14 Internal Controls. During the Blue Sky Compliance Period, the
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management's general or specific authorization, (ii) transactions are
recorded as necessary in order to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.15 Form 8-K. The Company shall, on the date hereof, retain its
independent public accountants to audit the financial statements of the Company
as of the Closing Date ("Audited Financial Statements") reflecting the receipt
by the Company of the proceeds of the initial public offering. As soon as the
Audited Financial Statements become available, the Company shall immediately
file a Current Report on Form 8-K with the Commission, which Report shall
contain the Company's Audited Financial Statements.
3.16 NASD. During the period of the distribution of the Public
Securities, the Company shall advise the NASD if it is aware that any 5% or
greater stockholder of the Company becomes an affiliate or associated person of
an NASD member participating in the distribution of the Company's Public
Securities.
3.17 Corporate Proceedings. All corporate proceedings and other legal
matters necessary to carry out the provisions of this Agreement and the
transactions contemplated hereby shall have been done to the reasonable
satisfaction to counsel for the Underwriters.
3.18 Investment Company. The Company shall cause the proceeds of the
Offering to be held in the Trust Fund to be invested only in "government
securities" with specific maturity dates as set forth in the Trust Agreement and
disclosed in the Prospectus. The Company will otherwise conduct its business in
a manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates a Business Combination, it will be
engaged in a business other than that of investing, reinvesting, owning, holding
or trading securities.
3.19 Colorado Trust Filing. In the event the Securities are registered
in the State of Colorado, the Company will cause a Colorado Form ES to be filed
with the Commissioner of the State of Colorado no less than 10 days prior to the
distribution of the Trust Fund in connection with a Business Combination and
will do all things necessary to comply with Section 00-00-000 and Rule 51-3.4 of
the Colorado Securities Act.
4. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of the
Company as of the date hereof and as of each of the Closing Date and the Option
Closing Date, if any, to the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof and to the performance by the
Company of its obligations hereunder and to the following conditions:
12.
4.1 Regulatory Matters.
4.1.1 Effectiveness of Registration Statement. The
Registration Statement shall have become effective not later than 5:00 P.M., New
York time, on the date of this Agreement or such later date and time as shall be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending or contemplated by the Commission and any
request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Xxxxxxx.
4.1.2 NASD Clearance. By the Effective Date, the
Representative shall have received clearance from the NASD as to the amount of
compensation allowable or payable to the Underwriters as described in the
Registration Statement.
4.1.3 No Blue Sky Stop Orders. No order suspending the sale of
the Units in any jurisdiction designated by you pursuant to Section 3.3 hereof
shall have been issued on either on the Closing Date or the Option Closing Date,
and no proceedings for that purpose shall have been instituted or shall be
contemplated.
4.2 Company Counsel Matters.
4.2.1 Closing Date Opinion of Counsel. On each of the Closing
Date and the Option Closing Date, if any, the Representative shall have received
the favorable opinion of Xxxxxx Godward LLP ("Xxxxxx"), counsel to the Company,
dated the as of the Closing Date or the Option Closing Date, as the case may be,
addressed to the Representative and in form and substance satisfactory to
Xxxxxxx and attached hereto as Exhibit A. [DISCUSS]
4.2.2 Reliance. In rendering such opinion, such counsel may
rely (i) as to matters involving the application of laws other than the laws of
the United States and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably satisfactory
to Xxxxxxx) of other counsel reasonably acceptable to Xxxxxxx, familiar with the
applicable laws, and (ii) as to matters of fact, to the extent they deem proper,
on certificates or other written statements of officers of the Company and
officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to Xxxxxxx
if requested. The opinion of counsel for the Company and any opinion relied upon
by such counsel for the Company shall include a statement to the effect that it
may be relied upon by counsel for the Underwriters in its opinion delivered to
the Underwriters.
4.3 Cold Comfort Letter. At the time this Agreement is executed, and at
each of the Closing Date and the Option Closing Date, if any, you shall have
received a letter, addressed to the Representative and in form and substance
satisfactory in all respects (including the non-material nature of the changes
or decreases, if any, referred to in clause (iii) below) to you and to Xxxxxxx
from Xxxxxx dated, respectively, as of the date of this Agreement and as of the
Closing Date and the Option Closing Date, if any:
(i) Confirming that they are independent accountants
with respect to the Company within the meaning of the Act and the applicable
Regulations and that they have not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act;
(ii) Stating that in their opinion the financial
statements of the Company included in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published Regulations thereunder;
(iii) Stating that, on the basis of a limited review
which included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest
available unaudited interim financial statements), a reading of the latest
available minutes of the stockholders and
13.
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that (a)
the unaudited financial statements of the Company included in the Registration
Statement do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations or are not fairly
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited financial statements
of the Company included in the Registration Statement, (b) at a date not later
than five days prior to the Effective Date, Closing Date or Option Closing Date,
as the case may be, there was any change in the capital stock or long-term debt
of the Company, or any decrease in the stockholders' equity of the Company as
compared with amounts shown in the __________, 2005 balance sheet included in
the Registration Statement, other than as set forth in or contemplated by the
Registration Statement, or, if there was any decrease, setting forth the amount
of such decrease, and (c) during the period from __________, 2005 to a specified
date not later than five days prior to the Effective Date, Closing Date or
Option Closing Date, as the case may be, there was any decrease in revenues, net
earnings or net earnings per share of Common Stock, in each case as compared
with the corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement, or, if there was any such decrease,
setting forth the amount of such decrease;
(iv) Setting forth, at a date not later than five
days prior to the Effective Date, the amount of liabilities of the Company
(including a break-down of commercial papers and notes payable to banks);
(v) Stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings, statements and
other financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers, percentages,
statements and information may be derived from the general accounting records,
including work sheets, of the Company and excluding any questions requiring an
interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries and other appropriate procedures (which
procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter and found them to be in
agreement;
(vi) Stating that they have not during the
immediately preceding five year period brought to the attention of the Company's
management any reportable condition related to internal structure, design or
operation as defined in the Statement on Auditing Standards No. 60
"Communication of Internal Control Structure Related Matters Noted in an Audit,"
in the Company's internal controls; and
(vii) Statements as to such other matters incident to
the transaction contemplated hereby as you may reasonably request.
4.4 Officers' Certificates.
4.4.1 Officers' Certificate. At each of the Closing Date and
the Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Chairman of the Board or the President
and the Secretary or Assistant Secretary of the Company, dated the Closing Date
or the Option Closing Date, as the case may be, respectively, to the effect that
the Company has performed all covenants and complied with all conditions
required by this Agreement to be performed or complied with by the Company prior
to and as of the Closing Date, or the Option Closing Date, as the case may be,
and that the conditions set forth in Section 4.5 hereof have been satisfied as
of such date and that, as of Closing Date and the Option Closing Date, as the
case may be, the representations and warranties of the Company set forth in
Section 2 hereof are true and correct. In addition, the Representative will have
received such other and further certificates of officers of the Company as the
Representative may reasonably request.
4.4.2 Secretary's Certificate. At each of the Closing Date and
the Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary or Assistant Secretary of the
Company, dated the Closing Date or the Option Date, as the case may be,
respectively, certifying (i) that the Bylaws and Amended and Restated
Certificate of Incorporation of the Company are true and complete, have not been
modified and are in full force and effect, (ii) that the resolutions relating to
the public offering contemplated by this Agreement are in full force and effect
and have not been modified, (iii) all correspondence between the
14.
Company or its counsel and the Commission, and (iv) as to the incumbency of the
officers of the Company. The documents referred to in such certificate shall be
attached to such certificate.
4.5 No Material Changes. Prior to and on each of the Closing Date and
the Option Closing Date, if any, (i) there shall have been no material adverse
change or development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus, (ii) no action suit or proceeding, at law
or in equity, shall have been pending or threatened against the Company or any
Initial Stockholder before or by any court or federal or state commission, board
or other administrative agency wherein an unfavorable decision, ruling or
finding may materially adversely affect the business, operations, prospects or
financial condition or income of the Company, except as set forth in the
Registration Statement and Prospectus, (iii) no stop order shall have been
issued under the Act and no proceedings therefor shall have been initiated or
threatened by the Commission, and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.6 Delivery of Agreements.
4.6.1 Effective Date Deliveries. On the Effective Date, the
Company shall have delivered to the Representative executed copies of the
Lock-up Agreements, the Trust Agreement, the Warrant Agreement, the Insider
Letters and the Warrant Commitment Purchase Letters.
4.6.2 Closing Date Deliveries. On the Closing Date, the
Company shall have delivered to the Representative the Representative's Purchase
Option.
4.7 Opinion of Counsel for the Underwriters. All proceedings taken in
connection with the authorization, issuance or sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to you and
to Xxxxxxx and you shall have received from such counsel a favorable opinion,
dated the Closing Date and the Option Closing Date, if any, with respect to such
of these proceedings as you may reasonably require. On or prior to the Effective
Date, the Closing Date and the Option Closing Date, as the case may be, counsel
for the Underwriters shall have been furnished such documents, certificates and
opinions as they may reasonably require for the purpose of enabling them to
review or pass upon the matters referred to in this Section 4.7, or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
4.8 Secondary Market Trading Survey. On the Closing Date, the
Representative shall have received the Secondary Market Trading Survey from
Xxxxxxx.
5. Indemnification.
5.1 Indemnification of Underwriters.
5.1.1 General. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless each of the Underwriters, and each
dealer selected by you that participates in the offer and sale of the Securities
(each a "Selected Dealer") and each of their respective directors, officers and
employees and each person, if any, who controls any such Underwriter
("controlling person") within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, 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, commenced or threatened, or any claim whatsoever, whether
arising out of any action between any of the Underwriters and the Company or
between any of the Underwriters and any third party or otherwise) to which they
or any of them may become subject under the Act, the Exchange Act or any other
statute or
15.
at common law or otherwise or under the laws of foreign countries, arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in (i) any Preliminary Prospectus, the Registration Statement or
the Prospectus (as from time to time each may be amended and supplemented); (ii)
in any post effective amendment or amendments or any new registration statement
and prospectus in which is included securities of the Company issued or issuable
upon exercise of the Representative's Purchase Option; or (iii) any application
or other document or written communication (in this Section 5 collectively
called "application") executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Securities
under the securities laws thereof or filed with the Commission, any state
securities commission or agency, Nasdaq or any securities exchange; or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
furnished to the Company with respect to an Underwriter by or on behalf of such
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in any
application, as the case may be. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Preliminary
Prospectus, the indemnity agreement contained in this paragraph shall not inure
to the benefit of any Underwriter to the extent that any loss, liability, claim,
damage or expense of such Underwriter results from the fact that a copy of the
Prospectus was not given or sent to the person asserting any such loss,
liability, claim or damage at or prior to the written confirmation of sale of
the Securities to such person as required by the Act and the Regulations, and if
the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the
Company with its obligations under Section 3.4 hereof. The Company agrees
promptly to notify the Representative of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale of the Securities or in connection
with the Registration Statement or Prospectus.
5.1.2 Procedure. If any action is brought against an
Underwriter, a Selected Dealer or a controlling person in respect of which
indemnity may be sought against the Company pursuant to Section 5.1.1, such
Underwriter or Selected Dealer shall promptly notify the Company in writing of
the institution of such action and the Company shall assume the defense of such
action, including the employment and fees of counsel (subject to the reasonable
approval of such Underwriter or Selected Dealer, as the case may be) and payment
of actual expenses; provided, that the failure to give such notice shall not
relieve the Company from any liability it may have under Sections 5.1.1 or 5.1.2
hereof, except to the extent the Company has been materially prejudiced (through
forfeiture of substantive rights or defenses) by such failure and; provided
further, that the failure to notify the Company shall not relieve the Company
from any liability that it may have to an indemnified party as determined under
Sections 5.1.1 or 5.1.2 hereof. Such Underwriter, Selected Dealer or controlling
person shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Underwriter, Selected Dealer or controlling person unless (i) the employment of
such counsel at the expense of the Company shall have been authorized in writing
by the Company in connection with the defense of such action, or (ii) the
Company shall not have employed counsel to take charge of the defense of such
action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the
Underwriter, Selected Dealer and/or controlling person shall be borne by the
Company. Notwithstanding anything to the contrary contained herein, if the
Underwriter, Selected Dealer or controlling person shall assume the defense of
such action as provided above, the Company shall have the right to approve the
terms of any settlement of such action which approval shall not be unreasonably
withheld.
5.2 Indemnification of the Company. Each Underwriter, severally and not
jointly, agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the foregoing indemnity
from the Company to the several Underwriters, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions
made in any Preliminary Prospectus, the Registration Statement or Prospectus or
any amendment or supplement thereto or in any application, in reliance upon, and
in strict conformity with, written information furnished to the Company with
respect to such Underwriter by or on behalf of the Underwriter expressly for use
in such Preliminary Prospectus, the
16.
Registration Statement or Prospectus or any amendment or supplement thereto or
in any such application. In case any action shall be brought against the Company
or any other person so indemnified based on any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereto or
any application, and in respect of which indemnity may be sought against any
Underwriter, such Underwriter shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the several Underwriters by the provisions of Section
5.1.2.
5.3 Contribution.
5.3.1 Contribution Rights. In order to provide for just and
equitable contribution under the Act in any case in which (i) any person
entitled to indemnification under this Section 5 makes claim for indemnification
pursuant hereto but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the Act, the Exchange Act or otherwise may be required on the part of any
such person in circumstances for which indemnification is provided under this
Section 5, then, and in each such case, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
the Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
offering price appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5.3.1, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Public Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section 5, each director,
officer and employee of an Underwriter or the Company, as applicable, and each
person, if any, who controls an Underwriter or the Company, as applicable,
within the meaning of Section 15 of the Act shall have the same rights to
contribution as the Underwriters or the Company, as applicable.
5.3.2 Contribution Procedure. Within fifteen days after
receipt by any party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for
contribution in respect thereof is to be made against another party
("contributing party"), notify the contributing party of the commencement
thereof, but the omission to so notify the contributing party will not relieve
it from any liability which it may have to any other party other than for
contribution hereunder. In case any such action, suit or proceeding is brought
against any party, and such party notifies a contributing party or its
representative of the commencement thereof within the aforesaid fifteen days,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any such
contributing party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding effected by such
party seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of such contributing party. The contribution provisions contained in
this Section 5 are intended to supersede, to the extent permitted by law, any
right to contribution under the Act, the Exchange Act or otherwise available.
The Underwriters' obligations to contribute pursuant to this Section 5.3 are
several and not joint.
6. Default by an Underwriter.
6.1 Default Not Exceeding 10% of Firm Units or Option Units. If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Units or Option Units that all Underwriters have agreed to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
17.
6.2 Default Exceeding 10% of Firm Units or Option Units. In the event
that the default addressed in Section 6.1 above relates to more than 10% of the
Firm Units or Option Units, you may in your discretion arrange for yourself or
for another party or parties to purchase such Firm Units or Option Units to
which such default relates on the terms contained herein. If within one business
day after such default relating to more than 10% of the Firm Units or Option
Units you do not arrange for the purchase of such Firm Units or Option Units,
then the Company shall be entitled to a further period of one business day
within which to procure another party or parties reasonably satisfactory to you
to purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
will be terminated without liability on the part of the Company (except as
provided in Sections 3.11 and 5 hereof) or the several Underwriters (except as
provided in Section 5 hereof); PROVIDED HOWEVER, that if such default occurs
with respect to the Option Units, this Agreement will not terminate as to the
Firm Units; and PROVIDED, FURTHER, that nothing herein shall relieve a
defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default hereunder.
6.3 Postponement of Closing Date. In the event that the Firm Units or
Option Units to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, you or the Company shall have the right to postpone the Closing
Date or Option Closing Date for a reasonable period, but not in any event
exceeding five business days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment to the Registration Statement or the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Securities.
7. Additional Covenants.
7.1 Additional Shares or Options. The Company hereby agrees that until
the earlier of the consummation of a Business Combination or the distribution of
the Trust Fund referred to in Section 7.7 hereof, it shall not issue any shares
of Common Stock or any options or other securities convertible into Common
Stock, or any shares of Preferred Stock which participate in any manner in the
Trust Fund or which vote as a class with the Common Stock on a Business
Combination.
7.2 Trust Fund Waiver Acknowledgment. The Company hereby agrees that it
will not commence its due diligence investigation of any operating business in
the technology, media or telecommunications industries which the Company seeks
to acquire (each a "Target Business") or obtain the services of any vendor or
other third party unless and until such Target Business, vendor, or other third
party acknowledges in writing, whether through a letter of intent, memorandum of
understanding or other similar document (and subsequently acknowledges the same
in any definitive document replacing any of the foregoing), that (a) it has read
the Prospectus and understands that the Company has established the Trust Fund,
initially in an amount of $[81,665,000] (without giving effect to any exercise
of the Over-allotment Option) for the benefit of the Public Stockholders and
that the Company may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event they elect to convert their IPO Shares (as described
below in Section 7.7), (ii) to the Public Stockholders in the event that the
Company does not effect a Business Combination within 18 months from the
consummation of this Offering (subject to extension for an additional 6-month
period, as described in the Prospectus) or (iii) to the Company after it
consummates a Business Combination and (b) for and in consideration of the
Company (1) agreeing to evaluate such Target Business for purposes of
consummating a Business Combination with it or (2) agreeing to engage the
services of the vendor or other third party, as the case may be, such Target
Business, vendor or other third party agrees that it does not have any right,
title, interest or claim of any kind in or to any monies in the Trust Fund
("Claim") and waives any Claim it may have in the future as a result of, or
arising out of, any negotiations, contracts or agreements with the Company and
will not seek recourse against the Trust Fund for any reason whatsoever.
7.3 Insider Letters and Lock-up Agreements. The Company shall not take
any action or omit to take any action that would cause a breach of any of the
Insider Letters executed between each Initial Stockholder and Wedbush or any of
the Lock-up Agreements executed between each Initial Stockholder and the Company
and will not allow any amendments to, or waivers of any provisions of, such
Insider Letters or Lock-up Agreements without the prior written consent of
Wedbush.
18.
7.4 Warrant Purchase Commitment Letters. The Company shall not take any
action or omit to take any action that would cause a breach of any of the
Warrant Purchase Commitment Letters executed between each Initial Stockholder
and Wedbush and will not allow any amendments to, or waivers of any provisions
of, such Warrant Purchase Commitment Letters without the prior written consent
of Wedbush.
7.5 Certificate of Incorporation and Bylaws. The Company shall not take
any action or omit to take any action that would cause the Company to be in
breach or violation of its Amended and Restated Certificate of Incorporation or
Bylaws. Prior to the consummation of a Business Combination or until the
distribution of the Trust Fund referred to in Section 7.7 hereof, the Company
will not amend its Amended and Restated Certificate of Incorporation without the
prior written consent of Wedbush.
7.6 Blue Sky Requirements. The Company shall provide counsel to the
Representative with ten copies of all proxy information and all related material
filed with the Commission in connection with a Business Combination concurrently
with such filing with the Commission. In addition, the Company shall furnish any
other state in which its initial public offering was registered, such
information as may be requested by such state.
7.7 Acquisition/Distribution Procedure. The Company agrees: (i) that,
prior to the consummation of the initial Business Combination, it will submit
such transaction to the Company's stockholders for their approval ("Business
Combination Vote") even if the nature of the acquisition is such as would not
ordinarily require stockholder approval under applicable state law; and (ii)
that, in the event that the Company does not effect a Business Combination
within 18 months from the consummation of this Offering (subject to extension
for an additional six-month period, as described in the Prospectus), the Company
will be liquidated and will distribute to all holders of IPO Shares (as defined
below) an aggregate sum equal to the Company's "Liquidation Value." The
Company's "Liquidation Value" shall mean the Company's book value, as determined
by the Company and approved by Xxxxxx. In no event, however, will the Company's
Liquidation Value be less than the Trust Fund, inclusive of any net interest
income thereon. Only holders of IPO Shares shall be entitled to receive
liquidating distributions and the Company shall pay no liquidating distributions
with respect to any other shares of capital stock of the Company. With respect
to the initial Business Combination Vote, the Company shall cause all of the
Initial Stockholders to vote the shares of Common Stock owned by them
immediately prior to this Offering in accordance with the vote of the holders of
a majority of the IPO Shares. At the time the Company seeks approval of the
initial Business Combination, the Company will offer each holder of the
Company's Common Stock issued in this Offering (the "IPO Shares") the right to
convert their IPO Shares at a per share conversion price (the "Conversion
Price") equal to the amount in the Trust Fund (inclusive of any net interest
income therein) calculated as of two business days prior to the consummation of
such proposed Business Combination divided by the total number of IPO Shares.
If holders of less than 20% in interest of the Company's IPO Shares vote
against such approval of a Business Combination and elect to convert their IPO
Shares, the Company may, but will not be required to, proceed with such
Business Combination. If the Company elects to so proceed, it will convert
shares, based upon the Conversion Price, from those holders of IPO Shares who
affirmatively requested such conversion and who voted against the Business
Combination. Only holders of IPO Shares shall be entitled to receive
distributions from the Trust Fund and the Company shall pay no distributions
with respect to any other shares of capital stock of the Company. If holders of
20% or more in interest of the IPO Shares vote against approval of any
potential Business Combination and elect to convert their IPO Shares, the
Company will not proceed with such Business Combination and will not convert
such shares.
7.8 Rule 419. The Company agrees that it will use its best efforts to
prevent the Company from becoming subject to Rule 419 under the Act prior to the
consummation of any Business Combination, including but not limited to using its
best efforts to prevent any of the Company's outstanding securities from being
deemed to be a "xxxxx stock" as defined in Rule 3a-51-1 under the Exchange Act
during such period.
7.9 Presentation of Potential Target Businesses. The Company shall
cause each of the Initial Stockholders to agree that, in order to minimize
potential conflicts of interest which may arise from multiple affiliations, the
Initial Stockholders will present to the Company for its consideration, prior to
presentation to any other person or company, any suitable opportunity to acquire
a Target Business, until the earlier of the consummation by the Company of a
Business Combination, the distribution of the Trust Fund or until such time as
the Initial Stockholders cease to be an officer or director of the Company,
subject to any pre-existing fiduciary obligations the Initial Stockholders might
have.
19.
7.10 Target Net Assets. The Company agrees that the initial Target
Business(es) in a Business Combination must have a fair market value equal to
at least 80% of the Company's net assets at the time of such Business
Combination. The fair market value of such business(es) must be determined by
the Board of Directors of the Company based upon standards generally accepted
by the financial community, such as actual and potential sales, earnings and
cash flow and book value. If the Board of Directors of the Company is not able
to independently determine that the Target Business(es) has a fair market value
of at least 80% of the Company's net assets at the time of such Business
Combination, the Company will obtain an opinion from an unaffiliated,
independent investment banking firm which is a member of the NASD with respect
to the satisfaction of such criteria.
8. Representations and Agreements to Survive Delivery. Except as the context
otherwise requires, all representations, warranties and agreements contained in
this Agreement shall be deemed to be representations, `warranties and agreements
at the Closing Dates and such representations, warranties and agreements of the
Underwriters and Company, including the indemnity agreements contained in
Section 5 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter, the Company or any
controlling person, and shall survive termination of this Agreement or the
issuance and delivery of the Securities to the several Underwriters.
9. Effective Date of This Agreement and Termination Thereof.
9.1 Effective Date. This Agreement shall become effective on the
Effective Date at the time the Registration Statement is declared effective by
the Commission.
9.2 Termination. You shall have the right to terminate this Agreement
at any time prior to any Closing Date, (i) if any domestic or international
event or act or occurrence has materially disrupted, or in your opinion will in
the immediate future materially disrupt, general securities markets in the
United States; or (ii) if trading on the New York Stock Exchange, the American
Stock Exchange, the Boston Stock Exchange or on the NASD OTC Bulletin Board (or
successor trading market) shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for securities
shall have been required on the NASD OTC Bulletin Board or by order of the
Commission or any other government authority having jurisdiction, or (iii) if
the United States shall have become involved in a new war or an increase in
major hostilities, or (iv) if a banking moratorium has been declared by a New
York State or federal authority, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States
securities market, or (vi) if the Company shall have sustained a material loss
by fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act which, whether or not such loss shall have been
insured, will, in your opinion, make it inadvisable to proceed with the delivery
of the Units, (vii) if any of the Company's representations, warranties or
covenants hereunder are breached, or (viii) if the Representative shall have
become aware after the date hereof of such a material adverse change in the
conditions or prospects of the Company, or such adverse material change in
general market conditions, including without limitation as a result of terrorist
activities after the date hereof, as in the Representative's judgment would make
it impracticable to proceed with the offering, sale and/or delivery of the Units
or to enforce contracts made by the Underwriters for the sale of the Securities.
9.3 Expenses. In the event that this Agreement shall not be carried out
for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the obligations of the Company to pay the
out of pocket expenses related to the transactions contemplated herein shall be
governed by Section 3.9.1 hereof.
9.4 Indemnification. Notwithstanding any contrary provision contained
in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of
Section 5 shall not be in any way effected by, such election or termination or
failure to carry out the terms of this Agreement or any part hereof.
20.
10. Miscellaneous.
10.1 Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed, delivered or
telecopied and confirmed and shall be deemed given when so delivered or
telecopied and confirmed or if mailed, two days after such mailing
If to the Representative:
Wedbush Xxxxxx Securities, Inc.
0000 Xxxxxxxx Xxxxxxxxx, 00xx xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx XxXxxxxxx, Vice President
Copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
If to the Company:
Ad.Venture Partners, Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx-Xxxxxxx aMarca, Esq.
10.2 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
10.3 Amendment. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
10.4 Entire Agreement. This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
10.5 Binding Effect. This Agreement shall inure solely to the benefit
of and shall be binding upon the Representative, the Underwriters, the Company
and the controlling persons, directors and officers referred to in Section 5
hereof, and their respective successors, legal representatives and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provisions herein contained.
10.6 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California, without
giving effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of, relating in any way to this
Agreement shall be brought and
21.
enforced in the courts of the State of [CALIFORNIA] of the United States of
America located in the [CITY AND COUNTY OF LOS ANGELES], and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in this Section 10. Such mailing shall be deemed personal
service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company agrees that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
10.7 No Fiduciary Duty. The Company acknowledges that neither the
representative, the Underwriters nor the controlling persons of any of them
shall have any fiduciary or advisory duty to the Company or any of its
controlling persons arising out of, or in connection with, this Agreement or the
offer and sale of the Units.
10.8 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
10.9 Waiver, Etc. The failure of any of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way effect the
validity of this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of this Agreement.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Agreement shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which enforcement of
such waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
AD.VENTURE PARTNERS, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
Accepted on the date first
above written
WEDBUSH XXXXXX SECURITIES INC.
By:
-------------------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director - Head of Investment Banking
22.
SCHEDULE I
AD. VENTURE PARTNERS, INC.
[15,000,000] UNITS
NUMBER OF FIRM UNITS
UNDERWRITER TO BE PURCHASED
---------------------------------------------------- -------------------------
Wedbush Xxxxxx Securities Inc. [__________]
Xxxxx Xxxxxxxx, Inc. [__________]
Ramius Capital Group, LLC [__________]
SCHEDULE 2.18.4
[ List all Company directors, officers and beneficial owners of Company stock
that have NASD affiliations ]
