FOUNDER WARRANT PURCHASE AGREEMENT
THIS
FOUNDER WARRANT PURCHASE AGREEMENT (this “Agreement”)
is
made as of [●],
2007,
between Secure America Acquisition Corporation, a Delaware corporation
(the
“Company”),
and
SECURE AMERICA ACQUISITION HOLDINGS, LLC, a Delaware limited liability
company
(the “Purchaser”).
Except as otherwise indicated herein, capitalized terms used herein are defined
in Section 7 hereof.
WHEREAS,
the Purchaser is an entity affiliated with the officers and directors of the
Company; and
WHEREAS,
in furtherance of the Company’s plan to obtain funding through an initial public
offering (the “Offering”)
of its
units (the “Units”),
each
Unit consisting of one share of common stock (the “Common
Stock”),
par
value $0.0001 per share, of the Company (the “Unit
Common Stock”)
and
one warrant to purchase one share of Common Stock (each, a “Unit
Warrant”
and
collectively, the “Unit
Warrants”),
and
to demonstrate its commitment to this plan, the Purchaser desires to make an
investment in the Company by purchasing 1,525,000 warrants (each, a
“Founder
Warrant”
and
collectively, the “Founder
Warrants”
)
on
the terms and conditions described herein.
NOW
THEREFORE, the parties to this Agreement hereby agree as follows:
Section
1. Authorization,
Purchase and Sale; Terms of the Founder Warrants.
A. Authorization
of the Founder Warrants. The
Company has authorized, and hereby ratifies such authorization by execution
hereof, the issuance and sale to the Purchaser of an aggregate of 1,525,000
Founder Warrants. Each Founder Warrant shall, upon exercise and payment of
the
exercise price specified therein, entitle the holder to purchase one share
of
the Company’s Common Stock.
B. Purchase
and Sale of the Founder Warrants.
The
Company shall sell to the Purchaser, and subject to the terms and conditions
set
forth herein, the Purchaser shall purchase from the Company, prior to the
effectiveness of the Registration Statement, 1,525,000 Founder Warrants. The
purchase price of each Founder Warrant shall be $1.00 per warrant (the
“Purchase
Price”),
which
shall be paid in immediately available funds through wire transfers to the
trust
account (the “Trust
Account”)
to be
established pursuant to that certain Investment Management Trust Agreement
by
and between the Company and Continental Stock Transfer & Trust Company
(“Continental”).
The
aggregate Purchase Price shall be wired to the Trust Account by the Purchaser
so
as to be on deposit in the Trust Account not less than 24 hours prior to the
effectiveness of the Registration Statement. Amounts so received in the Trust
Account shall be credited against the purchase obligations of the
Purchaser.
C. Terms
of the Founder Warrants.
The
Founder Warrants shall carry rights and terms identical to those possessed
by
the Unit Warrants described in the Registration Statement, subject to the
following exceptions: (i) the Founder Warrants are not subject to redemption
so
long as they are owned by the Purchaser or its members as of the date of this
Agreement, (ii) the Founder Warrants may be exercised on a cashless basis while
the Unit Warrants cannot be exercised on a cashless basis and (iii) upon an
exercise of the Founder Warrants, the holder of the Founder Warrants will
receive unregistered shares of Common Stock. The Founder Warrants will be
differentiated from Warrants sold in the Offering through the legends contained
on the certificates representing the Founder Warrants indicating the
restrictions and rights specifically applicable to such Founder Warrants as
are
described in the Registration Statement.
D. Transfer
Restrictions.
The
Founder Warrants, subject to certain limited exceptions described below,
will
not be transferable or salable until they are released from escrow, which
will
not occur until the later of (a) one year after the date of the final prospectus
included in the Registration Statement and (b) sixty days after the consummation
of the Company’s intitial Business Combination. Prior to their release from
escrow, the Founder Warrants may be transferred (i) to persons or entities
controlling, controlled by, or under comon control with the Founder, or
to any
stockholder, member, partner or limited partner of such entity, or (ii)
to
family members and trusts of permitted assignees for estate planning purposes
or, upon the death of any such person, to an estate or beneficiaries of
permitted assignees. In each case, such transferees will be subject to
the same
transfer restrictions as the Founder until after the Company completes
its
initial Business Combination.
Section
2. The
Closing.
The
closing of the purchase and sale of the Founder Warrants to the Purchaser (the
“Closing”)
shall
take place immediately prior to the effectiveness of the Registration Statement.
At the Closing, the Company shall deliver warrant certificates evidencing the
Founder Warrants to be purchased by the Purchaser hereunder to Continental,
acting as escrow agent, pursuant to the founder warrant escrow agreement, by
and
among the Company, Continental and the Purchaser (the “Founder Warrant
Escrow Agreement”), registered in the Purchaser’s name, upon the
payment of the aggregate purchase price therefor, by wire transfer of
immediately available funds to the Trust Account pursuant to Section 1.B.
above.
Section
3. Representations,
Warranties and Covenants of the Purchaser. As
a
material inducement to the Company to enter into this Agreement and issue and
sell the Founder Warrants to the Purchaser, the Purchaser hereby represents,
warrants and covenants to the Company that:
A. Capacity
and State Law Compliance.
(i)
The
Purchaser is a limited liability company duly organized, validly existing and
in
good standing under the laws of Delaware and is qualified to do business in
every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition, operating
results or assets of the Purchaser.
(ii)
The
execution, delivery and performance of this Agreement by the Purchaser will
have
been duly authorized by the Purchaser as of the Closing.
(iii)
To
the Purchaser’s knowledge, the Purchaser has engaged in the transactions
contemplated by this Agreement within a state in which the offer and sale of
the
Founder Warrants is permitted under applicable securities laws. The Purchaser
understands and acknowledges that the purchase of Common Stock upon exercise
of
the Founder Warrants may require the registration of such Common Stock under
federal and/or state securities laws or the availability of an exemption from
such registration requirements.
2
B. Authorization;
No Breach.
(i) The
Purchaser has the full right, power and authority to enter into this Agreement,
and this Agreement constitutes a valid and binding obligation of the Purchaser,
enforceable in accordance with its terms.
(ii) The
execution and delivery by the Purchaser of this Agreement, and the fulfillment
of and compliance with the terms hereof by the Purchaser do not, and shall
not
as of the
Closing,
conflict with or result in a breach of the terms, conditions or provisions
of
any other agreement, instrument, order, judgment or decree to which the
Purchaser is subject.
C. Investment
Representations.
(i)
The
Purchaser is acquiring the Founder Warrants and, upon exercise thereof, will
acquire the Common Stock issuable upon such exercise (collectively, the
“Securities”),
for
its own account, for investment only and not with a view towards, or for resale
in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as
defined in Rule 501(a)(3) of Regulation D.
(iii) The
Purchaser understands that the Securities are being offered and sold to it
in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws, and that the Company is relying in
part upon the truth and accuracy of, and the Purchaser’s compliance with, the
representations, warranties and agreements of the Purchaser set forth herein
in
order to determine the availability of such exemptions and the eligibility
of
the Purchaser to acquire such Securities.
(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502(c) under
the
Securities Act, including the filing of the Registration Statement.
(v) By
virtue
of the Purchaser’s affiliation with officers and directors of the Company, the
Purchaser has access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities. The Purchaser has been afforded the opportunity to ask questions
of
the other executive officers and directors of the Company. The Purchaser
understands that its investment in the Securities involves a high degree of
risk. The Purchaser has sought such accounting, legal and tax advice as the
Purchaser has considered necessary to make an informed investment decision
with
respect to its acquisition of the Securities. The Purchaser has received and
reviewed a copy of the Registration Statement, including, without limitation,
the language therein under the caption “Risk Factors.”
(vi) The
Purchaser understands that no United States federal or state agency or any
other
government or governmental agency has passed on, or made any recommendation
or
endorsement of, the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.
3
(vii) The
Purchaser understands that: (A) the Securities have not been registered
under the Securities Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (x) subsequently registered
thereunder or (y) sold in reliance on an exemption therefrom; and,
(B) except as specifically set forth in the Registration Rights Agreement,
neither the Company nor any other person is under any obligation to register
such Securities under the Securities Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. In this
regard, the Purchaser represents that it is familiar with Rule 144 adopted
pursuant to the Securities Act, and understands the resale limitations imposed
thereby and by the Securities Act. The Purchaser is able to bear the economic
risk of its investment in the Securities for an indefinite period of
time.
(viii) The
Purchaser is an investor in securities of companies in the development stage
and
acknowledges that it has knowledge and experience in financial and business
matters, knows of the high degree of risk associated with investments
generally and particularly investments in the securities of companies in
the
development stage such as the Company, is capable of evaluating the merits
and
risks of an investment in the Securities and is able to bear the economic
risk
of an investment in the Securities in the amount contemplated hereunder.
The
Purchaser has adequate means of providing for its current financial needs
and
contingencies and will have no current or anticipated future needs for liquidity
which would be jeopardized by the investment in the Securities. The Purchaser
can afford a complete loss of its investment in the
Securities.
(ix) Without
in any way limiting the representations set forth above, the Purchaser agrees
not to make any disposition of the Securities (or any part thereof) unless
and
until:
(A) There
is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or
(B)
the
Purchaser shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition and, if reasonably requested by the
Company, the Purchaser shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will
not
require registration of such Securities under the Securities Act.
Notwithstanding the foregoing, the Purchaser also understands and acknowledges
that the transfer or exercise of the Founder Warrants is subject to the specific
conditions to such transfer or exercise as outlined herein, as to which the
Purchaser specifically assents by its execution hereof.
D. No
Group. By
virtue
of the Purchaser’s purchase of the Founder Warrants under this Agreement, such
participation shall not be construed so as to make the Purchaser part of, or
a
participant in, a “group” as defined in Rule 13d-5 of the Exchange Act with
respect to any securities of the Company.
4
E. Rescission
Right Waiver and Indemnification.
(i) The
Purchaser understands and acknowledges that an exemption from the registration
requirements of the Securities Act requires that there be no general
solicitation of purchasers of the Founder Warrants. In this regard, if the
Offering were deemed to be a general solicitation with respect to the Founder
Warrants, the offer and sale of such Founder Warrants might not be exempt from
registration and, if not, the Purchaser would have a prima facie claim, subject
to applicable defenses, to rescind its purchase of the Founder Warrants. In
order to facilitate the completion of the Offering and in order to protect
the
Company, its stockholders and the Trust Account from claims that may adversely
affect the Company or the interests of its stockholders, the Purchaser hereby
agrees to waive, to the maximum extent permitted by applicable law, any claims,
right to xxx or rights in law or arbitration, as the case may be, to seek
rescission of its purchase of the Founder Warrants. The Purchaser acknowledges
and agrees that this waiver is being made in order to induce the Company to
sell
the Founder Warrants to the Purchaser. The Purchaser further agrees that the
foregoing waiver of rescission rights shall, to the extent permitted under
applicable law, apply to any and all known or unknown actions, causes of action,
suits, claims, or proceedings (collectively, “Rescission Claims”)
and
related losses, costs, penalties, fees, liabilities and damages, whether
compensatory, consequential or exemplary, and expenses in connection therewith
(collectively, “Losses
and Expenses”),
including, without limitation, reasonable attorneys’ and expert witness fees and
disbursements and all other expenses reasonably incurred in investigating,
preparing or defending against any Rescission Claims, whether pending or
threatened, in connection with any present or future actual or asserted right
to
rescind the purchase of the Founder Warrants hereunder or relating to the
purchase of the Founder Warrants and the transactions contemplated
hereby.
(ii) The
Purchaser hereby waives any and all right, title, interest or claim of any
kind
in or to any distributions from the Trust Account with respect to any shares
of
Common Stock acquired by the Purchaser in connection with the exercise of
the
Founder Warrants purchased pursuant to this Agreement (“Claim”)
and
hereby waives any Claim 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 against the Trust Account for any reason whatsoever.
(iii) The
Purchaser agrees to indemnify and hold harmless the Company and the Trust
Account against any and all Losses and Expenses whatsoever to which the Company
and the Trust Account may become subject as a result of the purchase of the
Founder Warrants by the Purchaser, including, but not limited to, any Claim
by
the Purchaser, but only to the extent necessary to ensure that such Losses
and
Expenses do not reduce the amount in the Trust Account. Further, the Purchaser
agrees to indemnify and hold harmless SunTrust Xxxxxxxx Xxxxxxxx, Inc.,
individually and as representative of the underwriters (“SunTrust”)
against any and all Losses and Expenses whatsoever to which SunTrust may become
subject as a result of the purchase of the Founder Warrants by the Purchaser,
including, but not limited to, any Claim by the Purchaser.
5
(iv) The
Purchaser acknowledges and agrees that the stockholders of the Company,
including those who purchase the Units in the Offering, are and shall be
third-party beneficiaries of the foregoing provisions of Section 3.E. of
this Agreement.
(v) The
Purchaser agrees that, to the extent any waiver of rights under this
Section 3.E. is ineffective as a matter of law, the Purchaser has offered
such waiver for the benefit of the Company as an equitable right that shall
survive any statutory disqualification or bar that applies to a legal right.
The
Purchaser further acknowledges the receipt and sufficiency of consideration
received from the Company hereunder in this regard.
Section
4. Conditions
Precedent to Closing.
A. The
obligations of the Company to the Purchaser under this Agreement are subject
to
the fulfillment on or before the Closing of each of the following
conditions:
(i) Representations
and Warranties.
The
representations and warranties of the Purchaser contained in Section 3
shall be true at and as of the Closing as though then made.
(ii) Performance.
The
Purchaser shall have performed and complied with all agreements, obligations
and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
(iii) Corporate
Consents.
The
Company shall have obtained the consent of its Board of Directors authorizing
the execution, delivery and performance of this Agreement and the issuance
and
sale of the Founder Warrants hereunder.
B. This
Agreement evidences the agreement between the Company, on the one hand, and
the
Purchaser, on the other hand. Accordingly the Company may (but shall not be
required to) waive any closing condition with respect to the
Purchaser.
Section
5. Termination. This
Agreement may be terminated by agreement of the Company and the Purchaser
at any
time prior to the consummation of the Closing if the Offering is not closed
within the time periods described in the Underwriting Agreement after the
Registration Statement is declared effective, and this Agreement shall
automatically terminate without any further action by any party and thereafter
be null and void upon termination of the Underwriting Agreement or the
Offering.
Section
6. Survival.
All of
the representations, warranties, covenants and agreements contained in Section
3
shall survive the Closing for a period of six (6) months, except as
otherwise specifically provided herein.
6
Section
7. Definitions.
For the
purposes of this Agreement, the following terms have the meanings set forth
below:
“Business
Combination”
means
a
merger, stock exchange, asset acquisition, stock purchase or similar business
combination of the Company with a target business or businesses and which meets
the size, timing and other criteria outlined in the Registration
Statement.
“Commission”
means
the United States Securities and Exchange Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Person”
means
any individual, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture, unincorporated
organization or governmental entity or any department, agency or political
subdivision thereof.
“Registration
Statement”
means
the Company’s registration statement on Form S-1 (File No. 333-144028),
as the
same has been, and may be, amended from time to time hereafter and filed with
the Commission.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Underwriting
Agreement”
means
that certain underwriting agreement to be entered into by and among the Company
and SunTrust immediately prior to the effectiveness of the Registration
Statement.
Section
8. Miscellaneous.
A. Legends.
(i) The
certificates evidencing the Founder Warrants will include the legend set forth
below:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED,
SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THESE SECURITIES ARE ALSO SUBJECT
TO
INVESTMENT REPRESENTATIONS AND RESTRICTIONS ON TRANSFER OR SALE PURSUANT
TO A
FOUNDER WARRANT PURCHASE AGREEMENT DATED [●],
2007,
WHICH RESTRICTS THE TRANSFER THEREOF AS PROVIDED IN THE FOUNDER WARRANT
PURCHASE
AGREEMENT, A COPY OF WHICH CAN BE OBTAINED FROM THE COMPANY AT ITS EXECUTIVE
OFFICES. THESE
SECURITIES ARE ALSO SUBJECT TO THE TERMS AND PROVISIONS OF A FOUNDER
WARRANT ESCROW AGREEMENT DATED [●],
2007
WHICH RESTRICTS THE TRANSFER THEREOF AS PROVIDED THEREIN, A COPY OF WHICH
CAN BE
OBTAINED FROM THE COMPANY AT ITS EXECUTIVE OFFICES.
7
(ii) By
accepting the certificates bearing the aforesaid legend, the Purchaser agrees,
prior to any permitted transfer of the Founder Warrants represented by the
certificates and subject to the restrictions contained herein, to give written
notice to the Company expressing its desire to effect such transfer and
describing briefly the proposed transfer. Upon receiving such notice, the
Company shall present copies thereof to its counsel and the following provisions
shall apply:
(x) subject
to the transfer restrictions contained elsewhere in this Agreement, if, in
the
reasonable opinion of counsel to the Company, the proposed transfer of such
Founder Warrants may be effected without registration under the Securities
Act
and applicable state securities acts, the Company shall promptly thereafter
notify the Purchaser, whereupon the Purchaser shall be entitled to transfer
such
Founder Warrants, all in accordance with the terms of the notice delivered
by
the Purchaser and upon such further terms and conditions as shall be required
to
ensure compliance with the Securities Act and the applicable state securities
acts, and, upon surrender of the certificate evidencing such Founder Warrants,
in exchange therefor, a new certificate not bearing a legend of the character
set forth above if such counsel reasonably believes that such legend is no
longer required under the Securities Act and the applicable state securities
acts; and
(y) subject
to the transfer restrictions contained elsewhere in this Agreement, if, in
the
reasonable opinion of counsel to the Company, the proposed transfer of such
Founder Warrants may not be effected without registration under the Securities
Act or the applicable state securities acts, a copy of such opinion shall be
promptly delivered to the Purchaser, and such proposed transfer shall not be
made unless such registration is then in effect.
(iii) The
Company may, from time to time, make stop transfer notations in its records
and
deliver stop transfer instructions to its transfer agent to the extent its
counsel considers it necessary to ensure compliance with the Securities Act
and
the applicable state securities acts.
B. Successors
and Assigns.
Except
as otherwise expressly provided herein, all covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and permitted assigns of
the
parties hereto, whether so expressed or not. Notwithstanding the foregoing
or
anything to the contrary herein, the parties may not assign this
Agreement.
C. Severability.
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement is held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
8
D. Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, any one
of
which need not contain the signatures of more than one party, but all such
counterparts, taken together, shall constitute one and the same Agreement.
Facsimile signatures shall be deemed originals for all purposes
hereunder.
E. Descriptive
Headings; Interpretation.
The
descriptive headings of this Agreement are inserted for convenience only and
do
not constitute a substantive part of this Agreement. The use of the word
“including” in this Agreement shall be by way of example rather than by
limitation.
F. Governing
Law.
The
general corporation law of the State of Delaware shall govern all issues and
questions concerning the construction, validity, enforcement and interpretation
of this Agreement, without giving effect to any choice of law or conflict of
law
rules or provisions that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
G. Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the recipient, sent
to
the recipient by reputable overnight courier service (charges prepaid) or mailed
to the recipient by certified or registered mail, return receipt requested
and
postage prepaid. Such notices, demands and other communications shall be
sent:
if
to the
Company, to:
0000
Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxx, Co-Chief Executive Officer
with
a
copy (which shall not constitute notice) to:
Xxxxx
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C.
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxx, Esq.
and
if to
Purchaser:
Secure
America Acquisition Holdings, LLC
0000
Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attn:
C.
Xxxxxx XxXxxxxx, Chief Executive Officer
or
in any
case to such other address or to the attention of such other person
as
the recipient party has specified by prior written notice to the
sending party.
9
H. No
Strict Construction.
The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions
of
this Agreement.
{Remainder
of page left intentionally blank. Signature page(s) to follow}
10
IN
WITNESS WHEREOF, the undersigned have executed this Founder Warrant Purchase
Agreement as of the date first written above.
| COMPANY: | ||
| |
|
|
| By: | ||
|
Name: C. Xxxxxx XxXxxxxx |
||
| Title: Co-Chief Executive Officer and Chairman | ||
| PURCHASER: |
SECURE
AMERICA ACQUISITION
HOLDINGS,
LLC
|
|
| |
|
|
| By: | ||
|
Name: C. Xxxxxx XxXxxxxx |
||
|
Title:
Chief Executive Officer
|
||
