UNDERWRITING AGREEMENT between STONELEIGH PARTNERS ACQUISITION CORP. and HCFP/BRENNER SECURITIES LLC
EXHIBIT
1.1.
between
and
HCFP/XXXXXXX
SECURITIES LLC
Dated:
___________, 2007
__________,
2007
HCFP/Xxxxxxx
Securities LLC
000
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Dear
Sirs:
The
undersigned, Stoneleigh Partners Acquisition Corp., a Delaware corporation
(“Company”), hereby confirms its agreement with HCFP/Xxxxxxx Securities LLC
(being referred to herein variously as “you,” “Xxxxxxx” or the “Representative”)
and with the other underwriters named on Schedule I hereto for which Xxxxxxx
is
acting as Representative (the Representative and the other Underwriters being
collectively called the “Underwriters” or, individually, an “Underwriter”) as
follows:
1.1 Firm
Securities.
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1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York
time, on the fourth business day following the Effective Date of the
Registration Statement or at such other 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: $192,900,000 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 proceeds shall be paid to the order of the
Company (subject to Section 3.13 hereof) 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.
1.2.1 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 3,750,000 Units from the
Company (“Over-allotment Option”). Such additional 3,750,000 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 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.
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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
as follows: $7.74 per Option Unit sold pursuant to the Over-Allotment
Option shall be deposited in the Trust Fund pursuant to the Trust Agreement
upon
delivery to you of certificates (in form and substance satisfactory to the
Underwriters) representing such securities (or through the facilities of DTC)
for the account of the Underwriters. 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.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or their
designees) on the Effective Date an option (“Representative’s Purchase Option”)
for the purchase of an aggregate of 1,250,000 Units (“Representative’s
Units”) for an aggregate purchase price of $100. Each of the Representative’s
Units is identical to the Firm Units. 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 $10.00 per Representative’s Unit.
The Representative’s Purchase Option, the Representative’s Units, the Warrants
underlying the Representative’s Units (the “Representative’s Warrants”) and the
shares of Common Stock issuable upon exercise of the Representative’s Warrants
are hereinafter referred to collectively as the “Representative’s Securities.”
The Public Securities and the Representative’s Securities are hereinafter
referred to collectively as the “Securities.” The Representative understands and
agrees that there are significant restrictions against transferring the
Representative’s Purchase Option during the first year after the Effective Date,
as set forth in Section 3 of the Representative’s Purchase Option.
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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.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Securities and Exchange Commission (“Commission”) a
registration statement and an amendment or amendments thereto, on Form S-1
(File No. 333-133235), 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 000-52460)
providing for the registration under the Securities Exchange Act of 1934, as
amended (“Exchange Act”), of the Units, the Common Stock and Warrants. The
registration of the Units, the Common Stock and Warrants under the Exchange
Act
has been declared effective by the Commission on the date hereof.
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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. The representation
and warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement or Prospectus or any amendment
thereof or supplement thereto.
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.
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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 Company’s formation, 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.
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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 conform 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 the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
2.8.3 Insider
Securities.
Xxxx X.
Xxxxx, Xxxxx X. Xxxxx, Xxxxxxxx Xxxxxxxx, Xxxxx Xxxxxxx and Xxxxxx X.
Xxxxxxx (the “Insider Purchasers”) have
committed to purchase an aggregate of 3,525,000 Warrants (“Insider Warrants” and
together with the shares of Common Stock underlying the Insider Warrants,
collectively referred to as the “Insider Securities”) at approximately $0.57 per
Warrant (for an aggregate purchase price of $2,000,000) from the Company
upon
consummation of the Offering. The Insider Securities have been duly authorized
and, when issued and paid for in accordance with the subscription agreements
(“Subscription Agreements”) entered into by the Insider Purchasers to purchase
such Insider Securities, 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 Insider 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 Insider
Securities has been duly and validly taken.
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2.13.1 Conduct
of Business.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates, consents and permits
of and from all governmental regulatory officials and bodies that it needs
as of
the date hereof to conduct its business purpose 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,
the
Representative’s Purchase Option, the Trust Agreement and the Services Agreement
and to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals, licenses, certificates, permits 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 and the Trust
Agreement and as contemplated by the Prospectus, except with respect to
applicable federal and state securities laws.
2.14 D&O
Questionnaires. To the best of the Company’s knowledge, all information
contained in the questionnaires
(“Questionnaires”) completed by each of the Company’s securityholders
immediately prior to the Offering (“Initial Stockholders”) and
provided to the Underwriters as an exhibit to his Insider Letter (as defined
in
Section 2.22) 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.
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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, other than payments to Xxxxxxx.
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 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 securities is or becomes an affiliate or associated
person of an NASD member participating in the offering.
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2.28 Escrow
Agreement.
The
Company has caused the Initial Stockholders to enter into an escrow agreement
(“Escrow Agreement”) with Continental Stock Transfer & Trust Company
(“Escrow Agent”) substantially in the form annexed as an exhibit to
the
Registration Statement, whereby the Common Stock owned by the Initial
Stockholders will be held in escrow by the Escrow Agent, until one year after
the consummation of a Business Combination. During such escrow period, the
Initial Stockholders shall be prohibited from selling or otherwise transferring
such shares (except as otherwise set forth in the Escrow Agreement) but will
retain the right to vote such shares. To the Company’s knowledge, the Escrow
Agreement is enforceable against each of the Initial Stockholders and will
not,
with or without the giving of notice or the lapse of time or both, result
in a
breach of, or conflict with any of the terms and provisions of, or constitute
a
default under, any agreement or instrument to which any of the Initial
Stockholders is a party. The Escrow Agreement shall not be amended, modified
or
otherwise changed without the prior written consent of Xxxxxxx.
2.29 Subscription
Agreements.
The
Company has entered into the Subscription Agreements substantially in the
form
annexed as Exhibit 10.12 to the Registration Statement with the Insider
Purchasers to purchase the Insider Securities. Pursuant to the Subscription
Agreement, the Insider Purchasers have placed the purchase price for the
Insider
Securities in escrow prior to the date hereof. Simultaneously with the
consummation of the Offering, such purchase price shall be deposited into
the
Trust Fund pursuant to the Trust Agreement.
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.
For a
period of five years from the Effective Date, or until such earlier time upon
which the Company is required to be 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
Xxxxxxx.
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3.7.1 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
the Business Combination is fair to the Company’s stockholders from a financial
perspective.
3.7.2 Administrative
Services.
The
Company has entered into an agreement (“Services Agreement”) with PLM
International Inc. (“Affiliate”) pursuant to which the Affiliate will make
available to the Company general and administrative services, including office
space, utilities and secretarial support for the Company’s use for $7,500 per
month.
3.7.3 Affiliate
Compensation.
Except
as set forth above in this Section 3.7, 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 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.
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3.11 Reports
to the Representative.
3.11.1 Periodic
Reports, Etc.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish to
the
Representative (Attn: Avi Lipsker) 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 Form 8-K
or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company,
(iv)
five copies of each registration statement and (v) 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;
provided, however, that the Company shall not be obligated to deliver any of
such information during the 10b5-1 Purchase Period (defined below in Section
3.25) if such information contains material non-public information and the
Representative is effecting the purchases contemplated by Section 3.25
below.
3.11.2 Transfer
Sheets.
For a
period of five years following the Effective Date or until such earlier time
upon which the Company is liquidated, 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.
3.11.3 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 quoted on the Nasdaq
National Market, or until such earlier time upon which the Company is required
to be liquidated, the Company shall engage Xxxxxxxx Xxxxxx (“GM”), for a
one-time fee of $5,000 payable on the Closing Date 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”).
3.11.4 Trading
Reports.
During
such time as the Public Securities are quoted on the NASD OTC Bulletin Board
(or
any successor trading market such as the Bulletin Board Exchange) or the Pink
Sheets, LLC (or similar publisher of quotations) and no other automated
quotation system, the Company shall provide to the Representative, at its
expense, such reports published by the NASD or the Pink Sheets, LLC relating
to
price trading of the Public Securities, as the Representative shall reasonably
request.
3.12 Disqualification
of Form S-1. For a period equal to eight years from the date hereof, unless
the Company is liquidated, the Company will not take any action or actions
which
may prevent or disqualify the Company’s use of Form S-1 (or other appropriate
form) for the registration of the Warrants and the Representative’s Warrants
under the Act.
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3.13 Payment
of Expenses.
3.13.1 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 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, 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 printing and mailing the “Preliminary Blue Sky
Memorandum,” and all amendments and supplements thereto, fees and disbursements
of GM retained for such purpose (such fees shall be $35,000 in the aggregate
(of
which $15,000 has previously been paid)), and a one-time fee of $5,000 payable
to GM for the preparation of the Secondary Market Trading Survey,
(iv) filing fees, costs and expenses (including fees of $5,000 and
disbursements for the Representative’s counsel) incurred in registering the
Offering with the NASD, (v) costs of placing “tombstone” advertisements in
The
Wall Street Journal,
The
New York Times
and a
third publication to be selected by the Representative, (vi) fees and
disbursements of the transfer and warrant agent, (vii) the Company’s expenses
associated with “due diligence” meetings arranged by the Representative, (viii)
the preparation, binding and delivery of transaction “bibles,” in form and style
reasonably satisfactory to the Representative and (ix) all other costs and
expenses incident to the performance of its obligations hereunder which are
not
otherwise specifically provided for in this Section 3.13.1. 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 herein to be paid by the
Company to the Representative and others. If the Offering contemplated by this
Agreement is not consummated for any reason whatsoever then the Company shall
reimburse the Underwriters in full for their out of pocket expenses, including,
without limitation, its legal fees (up to a maximum of $50,000) and
disbursements and
“road
show” and due diligence expenses. The
Representative shall retain such portion of the $25,000 previously paid as
shall
equal its actual out-of-pocket expenses and refund the balance, if any. If
the
amount previously paid is insufficient to cover such actual out-of-pocket
expenses, the Company shall remain liable for and promptly pay any other actual
out-of-pocket expenses. Subject to, and only upon the Closing, the $25,000
previously paid to the Representative as an advance against its expenses shall
be credited to the Company by reducing the discounts and commissions payable
to
Xxxxxxx upon the sale of the Firm Units by $25,000.
3.13.2 Intentionally
Omitted.
16
3.13.3 Intentionally
Omitted.
3.19 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.
17
3.23.1 Compensation.
As
compensation for the foregoing services, the Company will pay Xxxxxxx a cash
fee
of $7,400,000 to be allocated by Xxxxxxx between itself and Pali Capital,
Inc.
3.23.2 Payment.
All
fees payable under Section 3.23.1 are due and payable to Xxxxxxx, by certified
check or wire transfer, at the closing of the Business Combination.
Notwithstanding the foregoing, if a proposed Business Combination is not
consummated for any reason and at least 80% of the proceeds of the Trust Fund
are not released to the Company, no amounts shall be payable to Xxxxxxx under
3.23.1. The fee payable under Section 3.23.1 shall be paid to Xxxxxxx directly
from the proceeds of the Trust Fund. The Company shall instruct the trustee
under the Trust Agreement to deliver the fee to Xxxxxxx simultaneously with
the
release of the remaining funds from the Trust Fund.
3.23.3 Expenses.
In
addition to the compensation described in Section 3.23.1 above, the Company
shall bear all reasonable out of pocket costs and expenses incurred by Xxxxxxx
and Pali Capital, Inc. in connection with the performance of their services
under this Section 3.23, promptly after submission of appropriate evidence
of
having incurred such costs and expenses.
3.25
10b5-1
Purchase Agreement. Xxxx X. Xxxxx,
the Company's Chairman and Chief Executive Officer, Xxxxx X. Xxxxx, the
Company's Vice Chairman and Chief Financial Officer, Xxxxxxxx Xxxxxxxx, a
Director, and Xxxxx Xxxxxxx, one of the Company's Senior
Advisors, have entered into an agreement with Xxxxxxx in accordance with
Rule 10b5-1 under the Exchange Act, pursuant to which such individual, or an
entity or entities such individuals control, will place limit orders for an
aggregate of $15 million commencing 30 calendar days after the
Company files its preliminary proxy statement seeking approval of the holders
of
the Common Stock for a Business Combination and ending 30 days thereafter
(such period being referred to herein as the "10b5-1 Purchase Period"). These
purchases will be made in accordance with Rule 10b-18 under the Exchange Act
at
prices not to exceed $8.65 per Unit. The purchases will be made by Xxxxxxx
or a
broker as mutually agreed between Xxxxxxx and such individuals in such amounts
and at such times as Xxxxxxx or such broker may determine. Each of Messrs.
Engle, Coyne, Davidson and Xxxxxxx will make available to Xxxxxxx
monthly statements confirming that such individual has sufficient funds to
satisfy these transactions.
3.26 Insider
Securities.
3.26.1 Insider
Securities Purchase Price.
Simultaneously with the consummation of the Offering, the purchase price
to be
paid for the Insider Securities by the Insider Purchasers shall be deposited
in
the Trust Fund.
3.26.2 Exercise.
The
Company hereby acknowledges and agrees that, if the Warrants are called for
redemption, so long as the Insider Warrants are held by the Insider Purchasers
or their affiliates, such Insider Warrants shall be exercisable by the holders
on a “cashless basis.”
18
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 GM.
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.
4.2.1 Effective
Date Opinion of Counsel.
On the
Effective Date, the Representative shall have received the favorable opinion
of
Blank Rome LLP (“BR”), counsel to the Company, dated the Effective Date,
addressed to the Representative and in form and substance reasonably
satisfactory to GM substantially to the effect that:
(i) 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. The Company
is
duly qualified and licensed and in good standing as a foreign corporation in
each jurisdiction in which its ownership or leasing of any properties or the
character of its operations requires such qualification or licensing, except
where the failure to qualify would not have a material adverse effect on the
Company.
(ii) 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 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
stockholder of the Company arising by operation of law or under the Certificate
of Incorporation or Bylaws of the Company. 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 exempt from such
registration requirements. The authorized and outstanding capital stock of
the
Company is as set forth in the Prospectus.
(iii) The
Securities and Insider Securities have been duly authorized and, when issued
and
paid for, in accordance with the terms thereof, will be validly issued, fully
paid and non-assessable; the holders thereof are not subject to personal
liability by reason of being such holders. The Securities and Insider Securities
are not subject to the preemptive rights of any holders of any security of
the
Company arising by operation of law or under the Certificate of Incorporation
or
Bylaws of the Company. When issued, the Representative’s Purchase Option, the
Representative’s Warrants, the Insider Warrants and the Warrants will
constitute valid and binding obligations of the Company to issue and sell,
upon
exercise thereof and payment therefor, the number and type of securities of
the
Company called for thereby and such Warrants, the Representative’s Purchase
Option, the Insider Warrants and the Representative’s Warrants, when
issued, in each case, are enforceable against the Company in accordance with
their respective terms. The certificates representing the Securities are in
proper legal form.
19
(iv) Each
of
this Agreement, the Warrant Agreement, the Services Agreement, the Trust
Agreement, the Subscription Agreements, the Escrow Agreement and the
Representative’s Purchase Option have been duly and validly authorized and, when
executed and delivered by the Company, will constitute the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.
(v) The
execution, delivery and performance of this Agreement, the Warrant Agreement,
the Representative’s Purchase Option, the Trust Agreement, the Subscription
Agreements, the Escrow Agreement and the Services Agreement, the issuance
and sale of the Securities, the consummation of the transactions contemplated
hereby and thereby, and compliance by the Company with the terms and provisions
hereof and thereof, do not and will not, with or without the giving of notice
or
the lapse of time, or both, (a) to such counsel’s knowledge, conflict with, or
result in a breach of, any of the terms or provisions of, or constitute a
default under, or result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to the terms of, any mortgage, deed of trust, note, indenture,
loan, contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the provisions
of
the Certificate of Incorporation or the By-Laws of the Company, or (c) to such
counsel’s knowledge, violate any United States statute or any judgment, order or
decree, rule or regulation applicable to the Company of any court, or of any
United States federal, state or other regulatory authority or other governmental
body having jurisdiction over the Company, its properties or
assets.
(vi) The
Registration Statement, each Preliminary Prospectus and the Prospectus and
any
post-effective amendments or supplements thereto (other than the financial
statements and other financial and statistical data and information included
therein (or omitted therefrom) as to which no opinion need be rendered) each
as
of their respective dates complied as to form in all material respects with
the
requirements of the Act and Regulations. The Securities and each agreement
filed
as an exhibit to the Registration Statement conform in all material respects
to
the description thereof contained in the Registration Statement and the
Prospectus. No United States statute or regulation required to be described
in
the Prospectus is not described as required, nor are any contracts or documents
of a character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement not so
described or filed as required.
(vii) Counsel
has participated in conferences with officers and other representatives of
the
Company, representatives of the independent public accountants for the Company
and representatives of the Underwriters at which the contents of the
Registration Statement, the Prospectus and related matters were discussed and
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as otherwise set forth in this
opinion), no facts have come to the attention of such counsel which should
lead
them to believe that either the Registration Statement or the Prospectus or
any
amendment or supplement thereto, as of the date of such opinion contained any
untrue statement of a material fact or omitted to state a 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 (it being
understood that such counsel need express no opinion with respect to the
financial statements and other financial and statistical data and information
and statistical data included in or omitted from the Registration Statement
or
the Prospectus).
20
(viii) The
Registration Statement is effective under the Act. To such counsel’s knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
(ix) To
such
counsel’s knowledge, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or
threatened against the Company that is required to be described in the
Registration Statement.
4.2.2 Closing
Date and Option 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 BR, dated the Closing Date or
the
Option Closing Date, as the case may be, addressed to the Representative and
in
form and substance reasonably satisfactory to GM, confirming as of the Closing
Date and, if applicable, the Option Closing Date, the statements made by BR
in
its opinion delivered on the Effective Date.
4.2.3 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 (other than as to Delaware General Corporation Law),
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 GM) of other counsel reasonably acceptable to GM,
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 the Underwriters’ counsel 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.
21
(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
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 April 4, 2007 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 April 4, 2007 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;
22
(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.
4.4.1 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 By-Laws and
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 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.
23
4.6.1 Effective
Date Deliveries.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Trust Agreement, the Warrant Agreement, the Services Agreement,
the Escrow Agreement, the Subscription Agreements and all of the
Insider Letters.
4.6.2 Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representative executed
copies of the Representative’s Purchase Option.
4.9 Insider
Securities.
On the
Closing Date, the Insider Purchasers shall have purchased the Insider Securities
and the purchase price for such Insider Securities shall be deposited into
the
Trust Fund.
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 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 Units
under
the securities laws thereof or filed with the Commission, any state securities
commission or agency, the NASD OTC Bulletin Board, 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 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 solely 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.
24
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. 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 reasonably
satisfactory to the Underwriter or Selected Dealer, as the case may be, to
have
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 (in addition to a local firm of attorneys in any applicable
jurisdiction) selected by the Underwriter, Selected Dealer and/or controlling
person as to any action 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. The Company shall
not
settle any action without the prior consent of the Representative, unless such
settlement provides for a full release of the Underwriters and Selected Dealers
(whether or not named a party to the action), without admission of any
wrongdoing.
25
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, 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.
26
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 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.
5.3.3 Trust
Fund Waiver.
Notwithstanding anything in this Agreement to the contrary, each Underwriter
agrees that it does not have any right, title, interest or claim of any kind
in
or to any monies in the Trust Fund (each a “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.
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.
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 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
by you or the Company without liability on the part of the Company (except
as
provided in Sections 3.13.1 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.
27
28
29
30
10.2 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, or (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 Units.
31
11. Miscellaneous.
If
to the
Representative:
HCFP/Xxxxxxx
Securities LLC
000
Xxxxxxx Xxxxxx - 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Avi
Lipsker, Managing Director
32
Copy
to:
Xxxxxxxx
Xxxxxx
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxx
Xxxx Xxxxxx, Esq.
If
to the
Company:
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Chief
Financial Officer
Copy
to:
Blank
Rome LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X.
Xxxxxxx, Esq.
33
34
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,
STONELEIGH
PARTNERS ACQUISITION
CORP.
By: ___________________________________
Name:
Title:
Accepted
on the date first
above
written.
HCFP/XXXXXXX
SECURITIES LLC
By:
_____________________________________
Name:
Avi
Lipsker
Title:
Managing Director
35
SCHEDULE
I
25,000,000
Units
Underwriter
|
Number
of Units
to
be Purchased
|
||
HCFP/Xxxxxxx
Securities LLC
|
|||
Pali Capital, Inc. | |||
Total
|
25,000,000
|
||