Form of Letter Agreement for Howard M. Lorber and Michael S. Liebowitz]
Exhibit 10.9
[Form of
Letter Agreement for Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxxx]
[ ],
2008
00 Xxxx
Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Deutsche
Bank Securities Inc.
As
Representative of the several Underwriters
c/o
Deutsche Bank Securities Inc.
00 Xxxx
Xxxxxx, 0xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Re: Initial Public Offering of
Open Acquisition Corp.
Ladies
and Gentlemen:
This
letter is being delivered to you in accordance with the Underwriting Agreement
dated as of [ ], 2008 (the “Underwriting
Agreement”), by and between Open Acquisition Corp., a Delaware
corporation (the “Company”), and
Deutsche Bank Securities Inc. (“Deutsche Bank”), as
representative of the underwriters named in Schedule I thereto (the “Underwriters”),
relating to an underwritten initial public offering (the “Initial Public
Offering”) of the Company’s units (the “Units”), each
consisting of one share of the Company’s common stock, par value $0.0001 per
share (the “Common
Stock”), and one warrant (a “Warrant”) entitling
the holder thereof to purchase one share of Common Stock.
Open Acq
LLC (the “Sponsor”) has
purchased from the Company (i) 3,593,750 Units (the “Founder Units”)
pursuant to a Unit Subscription Agreement dated as of January 18, 2008, and (ii)
3,500,000 Warrants (the “Insider Warrants”)
pursuant to an Insider Warrant Purchase Agreement dated as of January 18,
2008. The terms of the Warrants are set forth in the Warrant
Agreement dated as of [ ], 2008, as amended (the “Warrant Agreement”),
by and between the Company and Continental Stock Transfer & Trust
Company. On [ ], 2008, the Sponsor transferred
[ ] shares of Common Stock included in the Founder Units to certain
officers and directors of the Company and other related parties.
In order
to induce the Company and the Underwriters to enter into the Underwriting
Agreement and to proceed with the Initial Public Offering, and in recognition of
the benefit that such Initial Public Offering will confer upon the undersigned
as an officer or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned hereby agrees with the Company as follows:
1. Approval of Business
Combination or Extension Period. The undersigned agrees that
(i) in connection with any vote of the stockholders of the Company on (a) a
proposed extension of the time period within which the Company must consummate a
Business Combination (as defined in the Company’s Amended and Restated
Certificate of Incorporation in effect on the date hereof (the “Certificate of
Incorporation”)) to up to 30 months or (b) a proposed Business
Combination, he will vote any shares of Common Stock included in (or that were
previously part of) the Founder Units that are owned directly or indirectly by
him in accordance with the majority of votes cast by the holders of shares of
Common Stock included in the Units issued in the Initial Public Offering (the
“IPO Shares”),
and (ii) in connection with a stockholder vote to approve a proposed Business
Combination, he will vote any such shares in favor of an amendment to the
Certificate of Incorporation providing for the Company’s perpetual existence
following the consummation of the Business Combination.
2. Liquidation; Waiver of
Claims. a) In the event that the Company fails to consummate a
Business Combination within 24 months (or up to 30 months if the public
stockholders approve an extension pursuant to the terms of the Certificate of
Incorporation) after the date of the final prospectus included in the
Registration Statement on Form S-1 relating to the Initial Public Offering (the
“Registration
Statement”), the undersigned will take all reasonable actions within his
power to (i) cause the Trust Account (as defined in the Certificate of
Incorporation) to be liquidated and the proceeds to be distributed to the
holders of the IPO Shares as soon as reasonably practicable and (ii) cause the
Company to liquidate as soon as reasonably practicable (the earliest date on
which the conditions in clauses (i) and (ii) are both satisfied being the “Liquidation Date”),
in each case in accordance with the terms of the Certificate of Incorporation
and all applicable laws.
(b) The
undersigned hereby waives any and all right, title, interest or claim of any
kind in or to any distributions of the Trust Account as a result of such
liquidation of the Company with respect to any shares of Common Stock included
in (or that were previously part of) the Founder Units that are owned directly
or indirectly by him. In addition, the undersigned hereby waives any
right, title, interest or claim of any kind in respect of any monies in the
Trust Account the undersigned may have in the future as a result of, or arising
out of, any contracts or agreements with the Company and will not seek recourse
or make any claim against the Trust Account for any reason
whatsoever.
(c) The
undersigned acknowledges and agrees that there will be no distribution from the
Trust Account with respect to any Warrants, all rights of which will terminate
on the Company’s liquidation.
3. Indemnification. The
undersigned agrees to indemnify and hold harmless the Company 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, whether pending or
threatened, or any claim whatsoever) which the Company may become subject to as
a result of any claim by any vendor, service provider or prospective target
business, including, but not limited to, accountants, lawyers and investment
bankers, or other individual or entity that is owed money by the Company for
services rendered or products sold but only to the extent necessary to ensure
that such loss, liability, claim, damage or expense does not reduce the amount
in the Trust Account. In the event the Company obtains a valid and
enforceable waiver of any right, title, interest or claim of any kind in or to
any monies held in the Trust Account for the benefit of our stockholders from a
vendor, service provider, prospective target business or other entity, this
indemnification will not be available.
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4. Transfer
Restrictions. The undersigned will not assign, alienate,
pledge, attach, sell or otherwise transfer or encumber (each, a “Transfer”), directly
or indirectly, any Founder Units or any shares of Common Stock or Warrants
included in (or that were previously part of) the Founder Units (including the
Common Stock issuable upon exercise of such Warrants) that he currently owns or
may acquire hereafter from the date hereof until 180 days following the date of
the consummation of a Business Combination, except to a Permitted
Transferee. Any Transfer of such securities to a Permitted Transferee
will be made in accordance with applicable securities laws. Any
Transfer of securities pursuant to this Paragraph 4 after the date hereof shall
be subject to the condition that the Permitted Transferee shall have agreed in
writing to be bound by the terms of Paragraphs 1, 2, 4, 9 and 10
hereof.
“Permitted Transferee”
means (i) the Company, any of the Company’s officers, directors and employees,
or Family Members of such individuals, (ii) in the case of individuals, by gift
to the individual’s Family Member or to a trust, the beneficiary of which is the
individual’s Family Member, (iii) any individual pursuant to a qualified
domestic relations order, (iv) if the transferor is a limited liability company,
any stockholder, partner or member of the transferor and (v) any individual or
entity by virtue of laws or agreements governing descent or distribution upon
the death or dissolution of the transferor. “Affiliate” has the
meaning set forth in Rule 405 under the Securities Act of 1933, as amended and
in effect on the date hereof (the “Securities
Act”). “Family Member” of a
person means such person’s present spouse and/or domestic partner, parents,
lineal ascendants or descendants or any siblings of any of the foregoing, or any
estate planning vehicle formed primarily for the benefit of such person or any
of the foregoing persons.
5. Limitation on
Compensation. b) Neither the undersigned nor any Family Member
or Affiliate of the undersigned will be entitled to receive, and no such person
will accept, a finder’s fee, consulting fee or any other compensation from the
Company for services rendered to the Company prior to or in connection with the
consummation of a Business Combination, other than (i) reimbursement for any
out-of-pocket expenses relating to the Initial Public Offering, the performance
of his duties as an officer or director and identifying, investigating and
consummating a Business Combination, (ii) by virtue of ownership of Founder
Units, Insider Warrants or any securities included in or issuable upon exercise
of such securities and (iii) pursuant to the letter agreement dated as of the
date hereof, between the Company and Open Acq, LLC, relating to the provision of
administrative services to the Company.
(b) Neither
the undersigned nor any Family Member or Affiliate of the undersigned will
accept a finder’s fee, consulting fee or any other compensation (other than by
virtue of ownership of Founder Units, Insider Warrants or any securities
included in or issuable upon exercise of such securities) or fees from any other
entity in connection with a Business Combination, other than compensation or
fees that may be received for any services provided following such Business
Combination.
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6. Due
Diligence. The undersigned authorizes any employer, financial
institution, or consumer credit reporting agency to release to the
Representatives and its legal representatives or agents (including any
investigative search firm retained by the Representatives) any information they
may have about the undersigned’s background and finances (“Information”), purely
for the purposes of the Company’s Initial Public Offering (and shall thereafter
hold such Information confidential). Neither the Representative nor
its agents shall be violating the undersigned’s right of privacy in any manner
in requesting and obtaining the Information and the undersigned hereby releases
them from liability for any damage whatsoever in that connection.
7. Resignation/Termination. The
undersigned agrees not to resign as [Chairman of the Board of
Directors][President, Chief Executive Officer, Secretary, Treasurer and
Director] until the earlier of the consummation by the Company of a Business
Combination or the Liquidation Date without the unanimous consent of the
Company’s independent directors. The undersigned acknowledges that
the foregoing does not limit in any way the right of the Company to terminate
the undersigned’s employment at any time, subject to any other contractual
rights the undersigned may have.
8. Representations and
Warranties. The undersigned represents and warrants
that:
(a) Except
as described in the Registration Statement, there are no claims, payments,
arrangements, contracts, agreements or understandings relating to the payment of
a brokerage commission or finder’s, consulting, origination or similar fee by
the undersigned with respect to the sale of the securities pursuant to the
Underwriting Agreement or any other arrangements, agreements or understandings
by the undersigned that may affect the Underwriters’ compensation pursuant to
the Underwriting Agreement;
(b) He
is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act
or practice relating to the offering of securities in any
jurisdiction;
(c) He
has never been convicted of or pleaded guilty to any crime (i) involving any
fraud or (ii) relating to any financial transaction or handling of funds of
another person or (iii) pertaining to any dealings in any securities and the
undersigned is not currently a defendant in any such criminal
proceeding;
(d) He
has never been suspended or expelled from membership in any securities or
commodities exchange or association or had a securities or commodities license
or registrations denied, suspended or revoked;
(e) He
has full right and power, without violating any agreement by which he is bound,
to enter into this letter agreement and to serve as [Chairman of the Board of
Directors][President, Chief Executive Officer, Secretary, Treasurer and
Director];
(f) He
is an “accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act;
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(g) The
undersigned’s biographical information furnished to the Company and attached
hereto as Exhibit A is true and accurate in all material respects, does not omit
any material information with respect to the undersigned’s background and
contains all of the material information required to be disclosed pursuant to
Section 401 of Regulation S-K, promulgated under the Securities Act;
and
(h) The
undersigned’s questionnaires furnished to the Company and the Underwriters and
attached hereto as Exhibit B are true and accurate in all material
respects.
9. No
Amendments. The undersigned agrees that he will not propose
any amendment to Articles II, V or VI of the Certificate of Incorporation or
support, endorse or recommend any proposal that stockholders amend such
provisions, other than in connection with a proposed Business Combination or a
proposed extension of the time period within which the Company must consummate a
Business Combination to up to 30 months, without the affirmative vote of at
least 95% of the IPO Shares.
10. Miscellaneous. c)
The undersigned acknowledges and understands that the Company and the
Underwriters will rely upon the agreements, representations and warranties set
forth herein in proceeding with the Initial Public Offering. Nothing
contained herein shall be deemed to render the Underwriters a representative of,
or a fiduciary with respect to, the Company, its stockholders, or any creditor
or vendor of the Company with respect to the subject matter hereof.
(b) This
letter agreement shall be binding on the undersigned and such person’s
successors and assigns. This letter agreement shall terminate on the
earlier of (i) the consummation of a Business Combination and (ii) the
Liquidation Date; provided that such
termination shall not relieve the undersigned from liability for any breach of
this letter agreement that occurred prior to its termination, and provided
further that paragraph 2 of this letter agreement shall survive a termination
pursuant to clause (ii).
(c) This
letter agreement constitutes the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings (whether written or oral) between the parties
relating to such subject matter. None of the parties shall be liable
or bound to any other party in any manner by any representations and warranties
or covenants relating to such subject matter except as specifically set forth
herein.
(d) This
letter agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to the principles of conflicts of laws
thereof.
(e) No
term or provision of this letter agreement may be amended, changed, waived,
altered or modified except by written instrument executed and delivered by the
party against whom such amendment, change, waiver, alteration or modification is
to be enforced.
[Signature
page follows]
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Accepted
and agreed:
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By:
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Accepted
and agreed:
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DEUTSCHE
BANK SECURITIES INC.
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By:
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Name:
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Title:
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By:
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Name:
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Exhibit
A
[Biographical
Information Furnished to the Company]
Exhibit
B
[Questionnaires
Furnished to the Company and the Underwriters]
