___________, 2005
Maxim Group LLC
000 Xxxxxxxxx Xxx.
New York, New York 10174
Re: Key Hospitality Acquisition Corporation.
Gentlemen:
This letter will confirm the agreement of the undersigned to purchase warrants
("Warrants") of Key Hospitality Acquisition Corporation ("Company") included in
the units ("Units") being sold in the Company's initial public offering ("IPO")
upon the terms and conditions set forth herein. Each Unit is comprised of one
share of common stock, par value $.001 per share, of the Company (the "Common
Stock") and one Warrant to purchase a share of Common Stock. The shares of
Common Stock and Warrants will not be separately tradable until 90 days after
the effective date of the Company's IPO unless Maxim Group LLC ("Maxim") informs
the Company of its decision to allow earlier separate trading.
The undersigned agrees that on the date hereof it will enter into an agreement
or plan in accordance with the guidelines specified by Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with an
independent broker-dealer (the "Broker") registered under Section 15 of the
Exchange Act which is neither affiliated with the Company, Maxim nor part of the
underwriting or selling group, pursuant to which the Broker will purchase up to
$______ of Warrants in the public marketplace for the undersigned's account
during the forty-trading day period commencing on the later of (i) the date
separate trading of the Warrants has commenced or (ii) 60 calendar days after
the end of the restricted period under Regulation M, at market prices not to
exceed $1.20 per Warrant ("Maximum Warrant Purchase"). The undersigned shall
instruct the Broker to fill such order in such amounts and at such times as the
Broker may determine, in its sole discretion, during the forty-trading day
period described above.
As the date hereof, the undersigned represents and warrants that it is not aware
of any material nonpublic information concerning the Company or any securities
of the Company and is entering into this agreement in good faith and not as part
of a plan or scheme to evade the prohibitions of Rule 10b5-1. The undersigned
agrees that while this agreement is in effect, the undersigned shall comply with
the prohibition set forth in Rule 10b5-1(c)(1)(i)(C) against entering into or
altering a corresponding or hedging transaction or position with respect to the
Company's securities. The undersigned further agrees that it shall not, directly
or indirectly, communicate any material nonpublic information relating to the
Company or the Company's securities to any employee of Maxim or the Broker. The
undersigned does not have, and shall not attempt to exercise, any influence over
how, when or whether to effect purchases of Warrants pursuant to this agreement
or the plan or agreement with the Broker.
The undersigned shall instruct the Broker to make, keep, and produce promptly
upon request a daily time-sequenced schedule of all Warrant purchases made
pursuant to this agreement, on a transaction-by-transaction basis, including (i)
size, time of execution, price of purchase; and (ii) the exchange, quotation
system, or other facility through which the Warrant purchase occurred.
The undersigned agrees that the undersigned shall not sell or transfer the
Warrants until the earlier of the consummation of a merger, capital stock
exchange, asset acquisition or other similar business combination involving the
Company and acknowledges that, at the option of Maxim, the certificates for such
Warrants shall contain a legend indicating such restriction on transferability,
it being understood that the Warrants purchased will be non-callable by the
Company as long as they are held by the undersigned.
This letter agreement shall for all purposes be deemed to be made under and
shall be construed in accordance with the laws of the State of New York, with
regard to the conflicts of laws principals thereof. This Agreement shall be
binding upon the undersigned and the heirs, successors and assigns of the
undersigned.
Very truly yours,
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