4,500,000 Units BBV Vietnam S.E.A. Acquisition Corp. FORM OF UNDERWRITING AGREEMENT
Exhibit
1.1
4,500,000
Units
FORM
OF UNDERWRITING AGREEMENT
November
[Ÿ],
2007
Ladenburg
Xxxxxxxx & Co. Inc.
000
Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Chardan
Capital Markets, LLC
00
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
As
Representatives of the Underwriters
named
on Schedule
A
hereto
Ladies
and Gentlemen:
The
undersigned, BBV Vietnam S.E.A. Acquisition Corp., a Republic of the Xxxxxxxx
Islands corporation (“Company”),
hereby confirms its agreement with Ladenburg Xxxxxxxx & Co. Inc. and Chardan
Capital Markets, LLC (hereinafter referred to as “you”,
“Ladenburg”,
“Chardan”,
or,
collectively, as the “Representatives”)
and
with the other underwriters named on Schedule
A
hereto
for which you are acting as Representatives (the Representatives and the other
Underwriters being collectively referred to herein as the “Underwriters”
or,
individually, an “Underwriter”)
as
follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Purchase
of Firm Units.
On the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of
4,500,000 units (the “Firm
Units”)
of the
Company at a purchase price (net of discounts and commissions, $0.24 of which
shall be deposited into the Trust Fund (as defined herein)) of $7.44 per Firm
Unit. The Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Units set forth opposite their respective names
on
Schedule
A
attached
hereto and made a part hereof at a purchase price (net of discounts and
commissions, $0.24 of which shall be deposited into the Trust Fund) of $7.44
per
Firm Unit. The Firm Units are to be offered initially to the public (the
“Offering”)
at the
offering price of $8.00 per Firm Unit. Each Firm Unit consists of one share
of
the Company’s common stock, par value $.0001 per share (the “Common
Stock”),
and
one warrant to purchase one share of Common Stock (the “Warrant(s)”).
The
shares of Common Stock and the Warrants included in the Firm Units will not
be
separately transferable until the tenth (10th) Business Day (defined below)
following the earliest to occur of (i) the expiration of the Over-allotment
Option (as defined in Section 1.2 hereof), or (ii) the exercise of the
Over-allotment Option in full. The Representatives may decide to allow continued
trading of the Units following such separation. In no event will the Company
allow separate trading until (i) the preparation of an audited balance sheet
of
the Company reflecting receipt by the Company of the proceeds of the Offering
and the filing of such audited balance sheet with the Commission (as herein
defined) on a Form 8-K or similar form by the Company which includes such
balance sheet; and (ii) the tenth (10th) Business Day following the earliest
to
occur of: (x)
the
expiration of the Over-allotment Option, or (y)
the
exercise of the Over-allotment Option in full. Each Warrant entitles its holder
to purchase one share of Common Stock for $5.00 per share during the period
commencing on the later of (a) the consummation by the Company of its “Business
Combination” or (b) one (1) year from the effective date (the “Effective
Date”)
of the
Registration Statement and terminating on the four (4) year anniversary of
the
Effective Date. As used herein, the term “Business
Combination”
shall
mean any acquisition by merger, capital stock exchange, asset or stock
acquisition, control through contractual arrangement, or other similar business
combination consummated by the Company with a business
that is located in Asia.
The
Company may enter into a Business Combination with a company in any industry
or
area in Asia, although the Company’s initial focus will be on acquiring an
operating business that has its primary operating facilities in the Socialist
Republic of Vietnam. The Company has the right to redeem the Warrants (including
the Representatives’ Warrants) upon not less than thirty (30) days written
notice at a price of $0.01 per Warrant at any time after the Warrants become
exercisable; so long as the last sales price of the Common Stock has been at
least $10.00 for any twenty (20) trading days within a thirty (30) trading
day
period ending on the third (3rd) Business Day prior to the day on which notice
is given, provided there is an effective registration statement covering the
resale of the shares of Common Stock issuable upon exercise of the Warrants
and
a current prospectus is available throughout the thirty (30) day written notice
period. As
used
herein, the term “Business
Day”
shall
mean any day other than a Saturday, Sunday or any day on which national banks
in
New York, New York are not open for business.
1
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 third (3rd) Business Day following the Effective Date of the
Registration Statement (or the fourth (4th) Business Day following the Effective
Date, if the Registration Statement is declared effective after 4:30 p.m.)
or at
such earlier time as shall be agreed upon by the Representatives and the Company
at the offices of Chardan or at such other place as shall be agreed upon by
the
Representatives and the Company. The closing of the public offering contemplated
by this Agreement is referred to herein as the “Closing”
and the
hour and date of delivery and payment for the Firm Units is referred to herein
as the “Closing
Date.”
Payment for the Firm Units shall be made on the Closing Date at the
Representatives’ election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds.
$35,314,000 ($40,498,000 if the Over-allotment Option (as defined in Section
1.2) is exercised in full), or approximately $7.85 per unit, of the proceeds
received by the Company for the Firm Units and from the Private Placement (as
defined in Section 1.4) shall be deposited in the trust fund established by
the
Company for the benefit of the public stockholders as described in the
Registration Statement (the “Trust
Fund”)
pursuant to the terms of an Investment Management Trust Agreement (the
“Trust
Agreement”)
which
amount includes up to $1,080,000 ($0.24 per Firm Unit; $1,242,000 if the
Over-allotment Option is exercised in full) payable to the Representatives
as
contingent compensation upon consummation of a Business Combination. The
proceeds (less commissions, expense allowance and actual expense payments or
other fees payable pursuant to this Agreement) shall be paid to the order of
the
Company upon delivery to the Representatives of certificates (in form and
substance satisfactory to the Underwriters) representing the Firm Units (or
through the facilities of the Depository Trust Company (the “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 Representatives may request
in writing at least two (2) Business Days prior to the Closing Date. The Company
will permit the Representatives to examine and package the Firm Units for
delivery, at least one (1) 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 Representatives for all the Firm Units.
2
1.2 Over-Allotment
Option.
1.2.1 Option
Units.
For the
purpose 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 675,000 units from the
Company (the “Over-allotment
Option”).
Such
additional 675,000 units shall be identical in all respects to the Firm Units
and are hereinafter referred to as “Option
Units.”
The
Firm Units and the Option Units are hereinafter collectively referred to as
the
“Units,”
and
the Units, the shares of Common Stock and the Warrants included in the Units
and
the shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the “Public
Securities.”
The
purchase price to be paid for the Option Units (net of discounts and
commissions) will be $7.44 per Option Unit (of which $0.24 of such discounts
and
commissions shall be deposited in the Trust Fund pursuant to Section 1.5).
The
Option Units are to be offered initially to the public at the offering price
of
$8.00 per Option Unit.
1.2.2 Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representatives as to all (at any time) or any part (from time to time)
of the Option Units within forty-five (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 from the
Representatives, 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, which
will not be later than five (5)
Business Days after the date of the notice or such other time as shall be agreed
upon by the Company and the Representatives, at the offices of the
Representatives or at such other place or in such other manner as shall be
agreed upon by the Company and the Representatives. If such delivery and payment
for the Option Units does not occur on the Closing Date, the date and time
of
the closing for such Option Units will be as set forth in the notice
(hereinafter the “Option
Closing Date”).
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.
3
1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representatives election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, by
deposit of the sum of $7.44 per Option Unit (of which $0.24 of the Underwriters’
discounts and commission shall be deposited in the Trust Fund pursuant to
Section 1.5) in the Trust Fund pursuant to the Trust Agreement upon delivery
to
the Representatives of certificates (in form and substance satisfactory to
the
Underwriters) representing the Option Units (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 Representatives requests not less than two (2) Business Days prior
to the Closing Date or the Option Closing Date, as the case may be, and will
be
made available to the Representatives for inspection, checking and packaging
at
the aforesaid office of the Company’s transfer agent or correspondent not less
than one (1) full Business Day prior to such Closing Date or Option Closing
Date.
1.3 Representatives’
Purchase Option.
1.3.1 Purchase
Option.
As
additional consideration, the Company hereby agrees to issue and sell to the
Representatives (and/or their designees) on the Effective Date an option
(“Representatives’
Purchase Option”)
for
the purchase of an aggregate of 315,000 units (the “Representatives’
Units”)
for an
aggregate purchase price of $100.00. The Representatives’ Purchase Option shall
be exercisable, in whole or in part, commencing on the six (6) month anniversary
date of the Effective Date and expiring on the five (5) year anniversary date
of
the Effective Date, for cash or on a cashless basis, at an initial exercise
price per Representatives’ Unit of $10.00, which is equal to one hundred and
twenty-five percent (125%) of the initial public offering price of a Unit.
The
Representatives’ Purchase Option, the Representatives’ Units, the shares of
Common Stock and the Warrants included in the Representatives’ Units (the
“Representatives’
Warrants”)
and
the shares of Common Stock issuable upon exercise of the Representatives’
Warrants are hereinafter referred to collectively as the “Representatives’
Securities.”
The
Public Securities and the Representatives’ Securities are hereinafter referred
to collectively as the “Securities.”
The
Representatives understand and agree that there are significant restrictions
against transferring the Representatives’ Purchase Option during the first six
(6) months after the Effective Date, as set forth in Section 3 of the
Representatives’ Purchase Option.
1.3.2 Delivery
and Payment.
Delivery and payment for the Representatives’ Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Representatives and their
designees upon payment therefor, certificates for the Representatives’ Purchase
Option in the name or names and in such authorized denominations as the
Representatives may request.
1.4 Private
Placement to Officers and Directors and Designees.
Prior
to the Effective Date, certain officers and directors of the Company and their
designees, or entities wholly owned by them, purchased from the Company pursuant
to the Subscription Agreement (as defined in Section 2.23.2 hereof) an aggregate
of 1,017,857 warrants identical to the Warrants (the “Placement
Warrants”)
at a
purchase price of $1.40 per Placement Warrant in a private placement that
occurred immediately prior to the entering into of this Agreement (the
“Private
Placement”).
The
Placement Warrants and the shares of Common Stock issuable upon exercise of
the
Placement Warrants are hereinafter referred to collectively as the “Placement
Securities.”
There
was no placement agent in the Private Placement and no party shall be entitled
to a placement fee or expense allowance from the sale of the Placement
Securities.
4
1.5 Contingent
Portion of Underwriters’ Discount.
The
Representatives, on their own behalf and behalf of the other Underwriters,
agree
that 3.0% of the gross proceeds from the sale of the Firm Units ($1,080,000)
and
the Option Units (an aggregate of $1,242,000 if the Over-allotment Option is
exercised in full) (the “Contingent
Discount”)
will
be deposited in and held in the Trust Fund and payable to the Representatives,
on a pro rata basis in respect of any IPO Shares (defined in Section 7.6 hereof)
which are not redeemed pursuant to Section 7.6 hereof upon the consummation
of a
Business Combination. The Representatives, on their own behalf and on behalf
of
the other Underwriters, agree that the several Underwriters shall forfeit any
rights or claims to the Contingent Discount in respect of any IPO Shares
redeemed pursuant to Section 7.6 hereof. In addition, in the event the Company
is unable to consummate a Business Combination and Continental Stock Transfer
& Trust Company (“CST”
or
“Escrow
Agent”),
the
trustee of the Trust Fund, commences liquidation of the Trust Fund as provided
in the Trust Agreement, the Representatives, on their own behalf and on behalf
of the other Underwriters, agree that (i) the several Underwriters shall forfeit
any rights or claims to the Contingent Discount; and (ii) the Contingent
Discount, together with all other amounts on deposit in the Trust Fund, and
any
accrued interest thereon (net of taxes payable), shall be distributed on a
pro-rata basis among the holders of the shares of Common Stock included in
the
Units sold in the Offering.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriters as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement and an amendment or amendments thereto, on Form S-1
(File
No. 333-146829), including any related preliminary prospectus (the “Preliminary
Prospectus”,
including any prospectus that is included in the Registration Statement
immediately prior to the effectiveness of the Registration Statement), for
the
registration of the Public Securities under the 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
(the
“Regulations”)
of the
Commission under the Act. The conditions for use of Form S-1 to register the
Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied in all material respects. 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 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
containing information permitted to be omitted at the time of effectiveness
by
Rule 430A of the Regulations filed with the Commission pursuant to Rule 424
of
the Regulations), is hereinafter called the “Prospectus.”
For
purposes of this Agreement, “Time
of Sale”,
as
used in the Act, means 5:00 p.m., New York City time, on the date of this
Agreement. If
the
Company has filed, or is required pursuant to the terms hereof to file, a
registration statement pursuant to Rule 462(b) under the Securities Act
registering the Securities (a “Rule
462(b) Registration Statement”),
then,
unless otherwise specified, any reference herein to the term “Registration
Statement”
shall
be deemed to include such Rule 462(b) Registration Statement. Other than a
Rule
462(b) Registration Statement, which, if filed, becomes effective upon filing,
no other document with respect to the Registration Statement has heretofore
been
filed with the Commission. All of the Public Securities have been registered
under the Securities Act pursuant to the Registration Statement or, if any
Rule
462(b) Registration Statement is filed, will be duly registered under the
Securities Act with the filing of such Rule 462(b) Registration Statement.
The
Registration Statement has been declared effective by the Commission on the
date
hereof.
If,
subsequent to the date of this Agreement, the Company or the Representatives
have determined that at the Time of Sale the Prospectus included an untrue
statement of a material fact or omitted a statement of material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and have agreed to provide an opportunity to
purchasers of the Firm Units to terminate their old purchase contracts and
enter
into new purchase contracts, the Prospectus will be deemed to include any
additional information available to purchasers at the time of entry into the
first such new purchase contract.
5
2.1.2 Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number 000-[Ÿ])
providing for the registration under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”),
of
the Units, the Common Stock and the Warrants. The registration of the Units,
Common Stock and Warrants under the Exchange Act will be declared effective
by
the Commission on or prior to the Effective Date.
2.2
No
Stop Orders, Etc.
Neither
the Commission nor, to the best of the Company’s knowledge, any state regulatory
authority has issued any order or threatened to issue any order preventing
or
suspending the use of any Preliminary Prospectus or has instituted or, to the
best of the Company’s knowledge, threatened to institute any proceedings with
respect to such an order.
6
2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
At the
time the Registration Statement became effective, upon the filing or first
use
(within the meaning of the Regulations) of the Prospectus and at the Closing
Date and the Option Closing Date, if any, the Registration Statement and the
Prospectus contained or will contain all material statements that are required
to be stated therein in accordance with the Act and the Regulations, and did
or
will in all material respects conform to the requirements of the Act and the
Regulations. Neither the Registration Statement nor any Preliminary Prospectus
or the Prospectus, nor any amendment or supplement thereto, on their respective
dates, did or 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 the case of the Preliminary Prospectus and the
Prospectus, 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) or first used (within the meaning of the Regulations) and when
any
amendment thereof or supplement thereto was first filed with the Commission
or
first used (within the meaning of the Regulations), such Preliminary Prospectus
and any amendments thereof and supplements thereto complied or will have been
corrected in the Prospectus to 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 Representatives expressly for use in the Registration
Statement or Prospectus or any amendment thereof or supplement thereto. It
is
understood the statements set forth in the Prospectus under the heading
“Underwriting” constitute, for the purposes of this Agreement, information
furnished by the Representatives with respect to the Underwriters.
2.3.2
Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement, the
Preliminary Prospectus 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, the Preliminary Prospectus 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 Registration Statement, Preliminary Prospectus or the
Prospectus or attached as an exhibit thereto, or (ii) is material to the
Company’s business, has been duly and validly executed by the Company, is in
full force and effect in all material respects 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 Company’s knowledge, any other party is in breach or default
thereunder and, to 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 Company’s knowledge, performance by the Company of
the material provisions of such agreements or instruments will not result in
a
material 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.
7
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 date of the Company’s formation,
except as disclosed in the Registration Statement.
2.3.4 Regulations.
The
disclosures in the Registration Statement, the Preliminary Prospectus and the
Prospectus concerning the effects of Federal, State and local regulation on
the
Company’s business as currently contemplated fairly summarize, to the best of
the Company’s knowledge, such effects and do not omit to state a material fact
necessary to make the statements therein, in light of the circumstances in
which
they were made, not misleading.
2.4 Changes
After Dates in Registration Statement.
2.4.1 No
Material Adverse Change.
Except
as contemplated in the Prospectus, since
the
respective dates as of which information is given in the Registration Statement,
any Preliminary Prospectus and/or 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; (iii) no member of the
Company’s board of directors or management has resigned from any position with
the Company and (iv) no event or occurrence has taken place which materially
impairs, or would likely materially impair, with the passage of time, the
ability of the members of the Company’s board of directors or management to act
in their capacities with the Company as described in the Registration Statement
and the Prospectus.
2.4.2 Recent
Securities Transactions, Etc.
Except
as contemplated in the Prospectus, 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 capital
stock.
2.5 Independent
Accountants.
To the
best of the Company’s knowledge, Amper, Politziner & Xxxxxx, P.C.
(“AP&M”),
whose
report is filed with the Commission as part of the Registration Statement and
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, are independent accountants as required by the Act and the
Regulations and the Public Company Accounting Oversight Board (including
the rules and regulations promulgated by such entity, the “PCAOB”).
To
the best of the Company’s knowledge, AP&M is duly registered and in good
standing with the PCAOB. AP&M has
not,
during the periods covered by the financial statements included in the
Registration Statement and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange
Act.
8
2.6 Financial
Statements; Statistical Data.
2.6.1 Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such
financial statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods involved;
and
the supporting schedules included in the Registration Statement present fairly
the information required to be stated therein. To the best of the Company’s
knowledge,
no
other financial statements or supporting schedules are required to be included
or incorporated by reference in the Registration Statement,
the
Preliminary Prospectus or the Prospectus.
The
Registration Statement, the Preliminary Prospectus and the Prospectus disclose
all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company
with
unconsolidated entities or other persons that may have a material current or
future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. To the best of
the
Company’s knowledge,
there
are no pro forma or as adjusted financial statements which are required to
be
included in
the
Registration Statement and the
Prospectus
in
accordance with Regulation
S-X which have not been included as so required.
2.6.2 Statistical
Data.
The
statistical, industry-related and market-related data included in the
Registration Statement, the Preliminary Prospectus and the Prospectus are based
on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
2.7 Authorized
Capital; Options, Etc.
The
Company had at the date or dates indicated in the Registration Statement, the
Preliminary Prospectus and the Prospectus, as the case may be, duly authorized,
issued and outstanding capitalization as set forth in the Registration
Statement, the Preliminary Prospectus and the Prospectus. Based on the
assumptions stated in the Registration Statement, the Preliminary Prospectus
and
the Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or contemplated by,
the Registration Statement, the Preliminary Prospectus and the Prospectus,
on
the Effective Date of the Prospectus and on the Closing Date and the Option
Closing Date, if any, there will be no options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares of Common
Stock of the Company or any security convertible into shares of Common Stock
of
the Company, or any contracts or commitments to issue or sell shares of Common
Stock or any such options, warrants, rights or convertible
securities.
9
2.8 Valid
Issuance of Securities, Etc.
2.8.1 Outstanding
Securities.
All
issued and outstanding securities of the Company (including, without limitation,
the Placement Securities) 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 Public Securities conform to
all
statements relating thereto contained in the Registration Statement, the
Preliminary Prospectus and the Prospectus. Subject to the disclosure contained
in the Registration Statement, the Preliminary Prospectus and the Prospectus
with respect to the Placement Securities, 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 reserved for issuance 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, the Preliminary
Prospectus and the Prospectus, as the case may be. When issued, the
Representatives’ Purchase Option, the Representatives’ 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 Representatives’ Purchase Option, the
Representatives’ 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 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. The shares of Common Stock issuable upon exercise of the
Representatives’ Purchase Option, the Representatives’ Warrants and the Warrants
have been reserved for issuance upon the exercise of the Representatives’
Purchase Option, the Representatives’ Warrants and the Warrants, respectively,
and, when issued in accordance with the terms of such securities, will be duly
and validly authorized, 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.
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2.8.3 Placement
Warrants.
The
Placement Warrants 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 Placement 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 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. The shares of Common Stock issuable upon
exercise of the Placement Warrants have been reserved for issuance upon the
exercise of the Placement Warrants and, when issued in accordance with the
terms
of the Placement Warrants, will be duly and validly authorized, validly issued,
fully paid and non-assessable, and the holders thereof are not and will not
be
subject to personal liability by reason of being such holders.
2.8.4 No
Integration.
Subject
to the disclosure contained in the Registration Statement, the Preliminary
Prospectus and/or the Prospectus with respect to the Placement Securities,
neither the Company nor any of its affiliates has, prior to the date hereof,
made any offer or sale of any securities which are required to be “integrated”
pursuant to the Act or the Regulations with the offer and sale of the Public
Securities pursuant to the Registration Statement.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Registration Statement, the Preliminary Prospectus or the
Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity
and Binding Effect of Agreements.
This
Agreement, the Warrant Agreement (as defined in Section 2.22 hereof), the Trust
Agreement, the Service Agreement (as defined in Section 3.7.2 hereof), the
Subscription Agreement (as defined in Section 2.23.2 hereof), the Stock Escrow
Agreement (as defined in Section 2.23.3 hereof) and the Warrant Escrow Agreement
(as defined in Section 2.23.4 hereof) have been duly and validly authorized
by
the Company and constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may
be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, Representatives’ Purchase Option, the Trust Agreement, the
Service Agreement, the Subscription Agreement, the Stock Escrow Agreement and
the Warrant Escrow Agreement, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to
the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement; (ii) result in any violation of the provisions
of the Amended and Restated Articles of Incorporation or the By-laws of the
Company; or (iii) to the best of the Company’s knowledge, violate any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company
or
any of its properties or business.
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2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its Amended
and Restated Articles of Incorporation or By-laws or in violation of any
material franchise, license, permit, or, to the best of the Company’s knowledge,
applicable law, rule, regulation, judgment or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any
of
its properties or businesses.
2.13 Corporate
Power; Licenses; Consents.
2.13.1 Conduct
of Business.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business for the purposes described in the
Registration Statement, the Preliminary Prospectus and the Prospectus. The
disclosures in the Registration Statement and the Prospectus 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. Since its formation,
the Company has conducted no business and has incurred no liabilities other
than
in connection with and in furtherance of the Offering.
2.13.2 Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement,
Representatives’ Purchase Option, the Trust Agreement, the Service Agreement,
the Subscription Agreement, the Stock Escrow Agreement and the Warrant Escrow
Agreement and as contemplated by the Prospectus, except with respect to
applicable federal and state securities laws and the rules and regulations
promulgated by the Financial Industry Regulatory Authority (the “FINRA”).
12
2.14 D&O
Questionnaires.
All
information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s stockholders immediately prior to the
Offering (the “Initial
Stockholders”)
and
each of the Company’s officers and directors and provided to the Underwriters as
an exhibit to his or her Insider Letter (as defined in Section 2.23.1) 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, officer or director, to become inaccurate and
incorrect.
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge,
threatened against, or involving the Company or, to the best of the Company’s
knowledge, any Initial Stockholder which has not been disclosed in the
Registration Statement, the Questionnaires, the Preliminary Prospectus and
the
Prospectus.
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its state of incorporation and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the Company.
2.17 No
Contemplation of a Business Combination.
Prior
to the date hereof, neither the Company, its officers and directors nor the
Initial Stockholders had, and as of the Closing, the Company and such officers
and directors and Initial Stockholders will not have had: (i) any specific
Business Combination under consideration or contemplation; or (ii) any
substantive interactions or discussions with any target business regarding
a
possible Business Combination.
2.18 Transactions
Affecting Disclosure to FINRA.
2.18.1 Except
as
described in the Preliminary Prospectus and/or 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
Company’s knowledge, any Initial Stockholder that may affect the Underwriters’
compensation, as determined by the FINRA.
2.18.2 The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) 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 FINRA member; or (iii) to any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within the twelve
(12) months prior to the Effective Date, other than payments to the
Representatives.
13
2.18.3 No
officer, director, or beneficial owner of any class of the Company’s securities
(whether debt or equity, registered or unregistered, regardless of the time
acquired or the source from which derived) (any such individual or entity,
a
“Company
Affiliate”)
is a
member, a person associated, or affiliated with a member of the FINRA.
2.18.4 No
Company Affiliate is an owner of stock or other securities of any member of
the
FINRA (other than securities purchased on the open market).
2.18.5 No
Company Affiliate has made a subordinated loan to any member of the
FINRA.
2.18.6 No
proceeds from the sale of the Public Securities (excluding underwriting
compensation) or the Placement Securities will be paid to any FINRA member,
or
any persons associated or affiliated with a member of the FINRA, except as
specifically authorized herein and in the Subscription Agreement.
2.18.7 Except
with respect to the Representatives, the Company has not issued any warrants
or
other securities, or granted any options, directly or indirectly to anyone
who
is a potential underwriter in the Offering or a related person (as defined
by
FINRA rules) of such an underwriter within the 180-day period prior to the
initial filing date of the Registration Statement.
2.18.8 No
person
to whom securities of the Company have been privately issued within the 180-day
period prior to the initial filing date of the Registration Statement has any
relationship or affiliation or association with any member of the FINRA.
2.18.9 No
FINRA
member intending to participate in the Offering has a conflict of interest
with
the Company. For this purpose, a “conflict of interest” exists when a member of
the FINRA and its associated persons, parent or affiliates in the aggregate
beneficially own 10% or more of the Company’s outstanding subordinated debt or
common equity, or 10% or more of the Company’s preferred equity. “Members
participating in the Offering” include managing agents, syndicate group members
and all dealers which are members of the FINRA.
2.18.10
Except with respect to the Representatives in connection with the Offering,
the
Company has not entered into any agreement or arrangement (including, without
limitation, any consulting agreement or any other type of agreement) during
the
180-day period prior to the initial filing date of the Registration Statement,
which arrangement or agreement provides for the receipt of any item of value
and/or the transfer of any warrants, options, or other securities from the
Company to a FINRA member, any person associated with a member (as defined
by
FINRA rules), any potential underwriters in the Offering and any related
persons.
2.19 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that: (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding; (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus; or (iii) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company. The Company’s internal accounting controls and
procedures are sufficient to cause the Company to comply with the Foreign
Corrupt Practices Act of 1977, as amended.
14
2.20 Patriot
Act.
Neither
the Company
nor, to the Company’s knowledge, any officer, director or Initial Stockholder
has violated: (i) the Bank Secrecy Act, as amended; (ii) the Money Laundering
Control Act of 1986, as amended; or (iii) the Uniting and Strengthening of
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations
promulgated under any such law, or any successor law.
2.21 Officers’
Certificate.
Any
certificate signed by any duly authorized officer of the Company and delivered
to the Representatives or to the Representatives’ counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.22 Warrant
Agreement.
The
Company has entered into a warrant agreement with respect to the Warrants,
the
Representatives’ Warrants and the Placement Warrants with CST substantially in
the form filed as an exhibit to the Registration Statement (the “Warrant
Agreement”),
providing for, among other things, the payment of a warrant solicitation fee
as
contemplated by Section 3.9 hereof.
2.23 Agreements
With Initial Stockholders.
2.23.1 Insider
Letters.
The
Company has caused to be duly executed legally binding and enforceable
agreements (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, contribution or
noncompete 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)
annexed as exhibits to the Registration Statement (the “Insider
Letter”),
pursuant to which each of the officers, directors and Initial Stockholders
of
the Company agree to certain matters, including but not limited to, certain
matters described as being agreed to by them under the “Proposed Business”
Section of the Prospectus.
15
2.23.2 Subscription
Agreement.
Certain
of the Company’s officers and directors and their designees have executed and
delivered an agreement, annexed as an exhibit to the Registration Statement
(the
“Subscription
Agreement”),
pursuant to which such persons, among other things, have purchased an aggregate
of 1,017,857 Placement Warrants in the Private Placement. Pursuant to the
Subscription Agreement all of the proceeds from the sale of the Placement
Warrants will be deposited by the Company in the Trust Fund in accordance with
the terms of the Trust Agreement prior to the Closing.
2.23.3 Stock
Escrow Agreement.
The
Company has caused the Initial Stockholders to enter into a stock escrow
agreement (the “Stock
Escrow Agreement”)
with
the Escrow Agent substantially in the form filed as an exhibit to the
Registration Statement whereby the Common Stock owned by the Initial
Stockholders (not including any shares of Common Stock underlying the Placement
Warrants which any of them may have purchased) will be held in escrow by the
Escrow Agent, until one (1) year following consummation of the Company’s initial
Business Combination. During such escrow period, the Initial Stockholders shall
be prohibited from selling or otherwise transferring such shares (except: (i)
to
the Company’s directors, officer or employees, or their affiliates, (ii) to
family members and trusts of permitted assignees for estate planning purposes,
or upon the death of any such person, to and estate or beneficiaries of
permitted assignees, (iii) after a Business Combination in a transaction whereby
all the outstanding shares of the Company are exchanged or converted into cash
or another entity’s securities; and (iv) as otherwise set forth in the Stock
Escrow Agreement) unless approved by the Company’s public stockholders, but will
retain the right to vote such shares. The Stock Escrow Agreement shall not
be
amended, modified or otherwise changed without the prior written consent of
the
Representatives, such consent not to be unreasonably withheld.
2.23.4 Warrant
Escrow Agreement.
The
Company has caused the holders of the Placement Warrants to enter into a warrant
escrow agreement (the “Warrant
Escrow Agreement”)
with
the Escrow Agent substantially in the form filed as an exhibit to the
Registration Statement whereby the Placement Warrants owned by such holders
will
be held by the Escrow Agent until the sixtieth (60th) day following consummation
of the initial Business Combination. During such escrow period, the holders
of
the Placement Warrants shall be prohibited from selling or otherwise
transferring such Placement Warrants (except: (i) to the Company’s directors,
officer or employees, or their affiliates, (ii) to family members and trusts
of
permitted assignees for estate planning purposes, or upon the death of any
such
person, to and estate or beneficiaries of permitted assignees, (iii) after
a
Business Combination in a transaction whereby all the outstanding shares of
the
Company are exchanged or converted into cash or another entity’s securities; and
(iv) as otherwise set forth in the Warrant Escrow Agreement) unless approved
by
the Company’s public stockholders. The Warrant Escrow Agreement shall not be
amended, modified or otherwise changed without the prior written consent of
the
Representatives, such consent not to be unreasonably withheld.
2.24 Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering and the Private Placement substantially in the form filed as an
exhibit to the Registration Statement.
16
2.25 Covenants
Not to Compete.
No
Initial Stockholder of the Company is subject to any noncompetition agreement
or
non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be an Initial Stockholder, employee, officer
or
director of the Company.
2.26 Investments.
No more
than 45% of the “value” (as defined in Section 2(a)(41) of the Investment
Company Act of 1940 (“Investment Company Act”)) of the Company’s total assets
consist of, and no more than 45% of the Company’s net income after taxes is
derived from, securities other than “Government Securities” (as defined in
Section 2(a)(16) of the Investment Company Act).
2.27 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.28 Related
Party Transactions.
No
relationship, direct or indirect, exists between or among any of the Company
or
any Company Affiliate, on the one hand, and any director, officer, shareholder,
customer or supplier of the Company or any Company Affiliate, on the other
hand,
which is required by the Act, the Exchange Act or the Regulations to be
described in the Registration Statement, the Preliminary Prospectus and/or
the
Prospectus which is not so described and described as required. There are no
outstanding loans, advances (except normal advances for business expenses in
the
ordinary course of business) or guarantees of indebtedness by the Company to
or
for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus. The Company has
not
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director
or
officer of the Company.
2.29 No
Influence.
The
Company has not offered, or caused the Underwriters to offer, the Firm Units
to
any person or entity with the intention of unlawfully influencing: (i) a
customer or supplier of the Company or any Company Affiliate to alter the
customer’s or supplier’s level or type of business with the Company or such
affiliate; or (ii) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
2.30 Definition
of “Knowledge”.
As
used
in herein, the term “knowledge
of the Company”
(or
similar language) shall mean the knowledge of the officers and directors of
the
Company who are named in the Prospectus, with the assumption that such officers
and directors shall have made reasonable and diligent inquiry of the matters
presented.
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement.
The
Company will deliver to the Representatives, prior to filing, any amendment
or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Representatives shall reasonably object in writing.
3.2 Federal
Securities Laws.
17
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 during such period to amend the Registration Statement or amend
or
supplement the Prospectus to
comply
with the Act, the Company will notify the Representatives promptly and prepare
and file with the Commission, subject to Section 3.1 hereof, an appropriate
amendment to the Registration Statement or amendment or supplement to the
Prospectus (at the expense of the Company) so as to correct such statement
or
omission or effect such compliance.
3.2.2 Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representatives) with the Commission pursuant to the requirements of Rule 424
of
the Regulations.
3.2.3 Exchange
Act Registration.
For a
period of five (5) 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
the Representatives.
3.2.4 Xxxxxxxx-Xxxxx
Compliance.
As soon
as it is legally required to do so, the
Company shall take all actions necessary to obtain and thereafter maintain
material compliance with each applicable provision of the Xxxxxxxx-Xxxxx Act
of
2002 and the rules and regulations promulgated thereunder and related or similar
rules and regulations promulgated by any other governmental or self regulatory
entity or agency with jurisdiction over the Company.
3.3 Blue
Sky Filing.
The
Company will endeavor in good faith, in cooperation with the Representatives,
at
or prior to the time the Registration Statement becomes effective, to qualify
the Public Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may reasonably designate, provided that
no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representatives agree that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
18
3.4 Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act such number of copies of each Preliminary
Prospectus and Prospectus and all amendments and supplements to such documents
as such Underwriters may reasonably request and, as soon as the Registration
Statement or any amendment or supplement thereto becomes effective, deliver
to
Representatives two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed
consents of certified experts.
3.5 Effectiveness
and Events Requiring Notice to the Representatives.
The
Company will use its best efforts to cause the Registration Statement to remain
effective and will notify the Representatives immediately and confirm the notice
in writing: (i) of the effectiveness of the Registration Statement and any
amendment thereto; (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or of the initiation, or the
threatening, of any proceeding for that purpose; (iii) of the issuance by any
state securities commission of any proceedings for the suspension of the
qualification of the Public Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus; (v) of the receipt
of
any comments or request for any additional information from the Commission;
and
(vi) of the happening of any event during the period described in Section 3.4
hereof that, in the judgment of the Company, makes any statement of a material
fact made in the Registration Statement, the Preliminary Prospectus and/or
the
Prospectus untrue or that requires the making of any changes in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus in order to make
the
statements therein, (with respect to the Prospectus in light of the
circumstances under which they were made), not misleading. If the Commission
or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will make every reasonable effort to
obtain promptly the lifting of such order.
3.6 Review
of Financial Statements.
Until
the earlier of five (5) years from the Effective Date, or until such earlier
date upon which the Company is required to be liquidated, the Company, at its
expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) the Company’s financial statements for
each of the first three fiscal quarters prior to the announcement of quarterly
financial information, the filing of the Company’s Form 10-Q quarterly report
and the mailing of quarterly financial information to stockholders.
3.7 Affiliated
Transactions.
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 stating the Business Combination
is
fair to the Company’s stockholders from a financial perspective.
19
3.7.2 Administrative
Services.
The
Company has entered into an agreement (the “Service
Agreement”)
with
Bantry Bay Ventures-Asia, LLC (the “Affiliate”)
in the
form filed as an exhibit to the Registration Statement pursuant to which the
Affiliate will make available to the Company general and administrative services
including office space, utilities, receptionist and secretarial support for
the
Company’s use for $7,500 per month.
3.7.3 Compensation.
Except
as set forth 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,
this Offering or the consummation of a Business Combination; provided
that
the
Initial Stockholders shall be entitled to reimbursement from the Company for
their out-of-pocket expenses incurred on the Company’s behalf, which includes an
aggregate of $200,100 in loans which were made to the Company prior to the
effective date of the Registration Statement and expenses incurred by them
in
connection with seeking and consummating a Business Combination as described
in
the Registration Statement.
3.8 Secondary
Market Trading.
The
Company will apply to be included in Mergent, Inc. Manual for a period of five
(5) years from the consummation of a Business Combination. Promptly after the
consummation of the Offering, the Company shall take such steps as may be
necessary to obtain a secondary market trading exemption for the Company’s
securities in the State of California. The Company shall also take such other
action as may be reasonably requested by the Representatives to obtain a
secondary market trading exemption in such other states as may be requested
by
the Representatives.
3.9 Reserved.
3.10 Financial
Public Relations Firm.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall retain a financial public relations firm
reasonably acceptable to the Representatives for a term to be agreed upon by
the
Company and the Representatives.
3.11 Reports
to the Representatives.
3.11.1 Periodic
Reports, Etc.
For a
period of five (5) 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
Representatives and their 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
Representatives: (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 Representatives may from time to time reasonably request; provided
that the
Representatives shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representatives and their counsel in connection with the Representatives’
receipt of such information. Documents filed with the Commission pursuant to
its
Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”)
shall
be deemed to have been delivered to the Representatives pursuant to this
section.
20
3.11.2 Transfer
Sheets.
For a
period of five (5) years following the Effective Date or until such earlier
time
upon which the Company is required to be liquidated, the Company shall retain
a
transfer and warrant agent acceptable to the Representatives (the “Transfer
Agent”)
and
during the two (2) year period following the Closing Date, will furnish to
the
Underwriters at the Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Representatives may request, including the daily and
monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental
Stock Transfer & Trust Company is an acceptable Transfer Agent to the
Underwriters.
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
Global Select Market or Nasdaq Global Market, or until such earlier time upon
which the Company is required to be liquidated, the Company shall engage
Xxxxxxxxxx & Xxxxx LLP (“R&P”),
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 (the “Secondary
Market Trading Survey”),
a
copy of which will be provided to the Company and Xxxxx Xxxxx.
3.11.4 Trading
Reports.
During
such time as the Public Securities are quoted on the 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 Representatives, at its
expense, such reports published by the OTC Bulletin Board or the Pink Sheets,
LLC relating to price trading of the Public Securities, as the Representatives
shall reasonably request. In addition to the requirements of the preceding
sentence, for a period of two (2) years from the Closing Date, the Company,
at
its expense, shall provide Chardan a subscription to the Company’s weekly
Depository Transfer Company Security Position Reports.
3.12 Disqualification
of Form S-1.
For a
period equal to seven
(7)
years from the date hereof, 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 Representatives’
Purchase Option and the securities underlying the Representatives’ Purchase
Option under the Act.
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 Prospectus and/or the final Prospectus
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
Representatives’ 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 for counsel of Chardan’s choice retained for such purpose
(such fees shall be $35,000 in the aggregate to be due on the Closing Date
(of
which $7,500 has previously been paid)), and a one-time fee of $5,000 payable
to
the counsel of Chardan’s choice for the preparation of the Secondary Market
Trading Survey; (iv) filing fees incurred in registering the Offering with
the
FINRA (including all COBRADesk fees); (v) fees and disbursements of the transfer
and warrant agent; (vi) the Company’s expenses associated with “due diligence”
meetings arranged by the Representatives (none of which will be received or
paid
on behalf of an underwriter and related person); (vii) the preparation, binding
and delivery of leather bound volumes in form and style reasonably satisfactory
to Chardan and transaction lucite cubes or similar commemorative items in a
style and quantity as reasonably requested by Chardan; (viii) all costs and
expenses associated with “road show” marketing and “due diligence” trips for the
Company’s management to meet with prospective investors, including without
limitation, all travel, food and lodging expenses associated with such trips;
(ix) all costs associated with an independent third-party background
investigation of each of the Company’s officers, directors and Initial
Stockholders; and (x) all other reasonable 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 Representatives 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 above to be paid by the
Company to the Representatives and others, as agreed to by the Company in
writing. If the Offering is not consummated for any reason whatsoever, except
as
a result of the Representatives’ or any Underwriter’s breach or default with
respect to any of its obligations described in this Agreement, then the Company
shall reimburse the Representatives in full for their out-of-pocket accountable
expenses actually incurred by the Representatives, including, without
limitation, their legal fees (less any amounts previously paid). Additionally,
upon any such termination, the Representatives shall return to the Company
any
portion of the amounts advanced towards the Underwriters’ discount (of which
$25,000 has previously been paid (“Advance”))
in
excess of the out-of-pocket accountable expenses actually incurred by the
Representatives, including, without limitation, their legal fees.
21
3.13.2 Fee
on
Business Combination.
Upon
consummation of a Business Combination, the Company and the Underwriters agree
that in addition to the expenses payable pursuant to Section 3.13.1, the Company
will pay to the Representatives the Contingent Discount as set forth in Section
1.5 above.
3.13.3 Fee
on
Termination of Offering.
Notwithstanding anything contained herein to the contrary, upon termination
of
the Offering the Company shall: (A) reimburse the Representatives for, or
otherwise pay and bear, the expenses and fees to be paid and borne by the
Company as provided for in Paragraph 3.13.1 above, as applicable, and (B)
reimburse the Representatives for the full amount of their accountable
out-of-pocket expenses actually incurred to such date (which shall include,
but
shall not be limited to, all fees and disbursements of the Representatives’
counsel, travel, lodging and other “road show” expenses, mailing, printing and
reproduction expenses, and any expenses incurred by the Representatives in
conducting their due diligence), less the amounts previously paid and any
amounts previously paid to the Representatives in reimbursement for such
expenses. If applicable, and solely in the event of a termination of this
Offering, the Representatives shall refund to the Company any portion of the
Advance previously received by the Representatives which is in excess of the
accountable out-of-pocket expenses actually incurred to such date by the
Representatives.
22
3.14 Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering received by it in a manner
consistent with the application described under the caption “Use of Proceeds” in
the Prospectus.
3.15 Delivery
of Earnings Statements to Security Holders.
The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth (15th) full
calendar month following the Effective Date, an earnings statement (which need
not be certified by independent public or independent certified public
accountants unless required by the Act or the Regulations, but which shall
satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering
a
period of at least twelve (12) consecutive months beginning after the Effective
Date.
3.16 Notice
to FINRA.
3.16.1 Business
Combination.
In the
event any person or entity (regardless of any FINRA affiliation or association)
is engaged to assist the Company in its search for a merger candidate or to
provide any other merger and acquisition services, the Company will provide
the
following to the FINRA and the Representatives prior to the consummation of
the
Business Combination: (i) complete details of all services and copies of
agreements governing such services; and (ii) justification as to why the person
or entity providing the merger and acquisition services should not be considered
an “underwriter and related person” with respect to the Company’s initial public
offering, as such term is defined in Rule 2710 of the FINRA’s Conduct Rules. The
Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the proxy statement which the Company will file
for
purposes of soliciting stockholder approval for the Business Combination.
3.16.2 Broker/Dealer.
In the
event the Company intends to register as a broker/dealer, merge with or acquire
a registered broker/dealer, or otherwise become a member of FINRA, it shall
promptly notify the FINRA.
3.17 Stabilization.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of the Representatives) has taken or will
take, directly or indirectly, any action designed to or that has constituted
or
that might reasonably be expected to cause or result in, under the Exchange
Act,
or otherwise, stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Units.
23
3.18 Internal
Controls.
The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary in order to permit preparation of financial statements
in
accordance with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.19 Accountants.
For a
period of five (5) years from the Effective Date or until such earlier time
upon
which the Company is required to be liquidated, the Company shall retain
AP&M or other independent public accountants reasonably acceptable to the
Representatives.
3.20 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 (the
“Audited
Financial Statements”)
reflecting the receipt by the Company of the proceeds of the initial public
offering and the Private Placement, as well as the proceeds from the exercise
of
the Over-Allotment if such exercise has occurred on the date of the Prospectus.
Within three (3) trading days of the Effective Date, the Company will file
a
Current Report on Form 8-K with the Commission, which Report shall contain
the
Company’s Audited Financial Statements.
3.21 FINRA.
The
Company shall advise the FINRA if it is aware that any 5% or greater stockholder
of the Company becomes an affiliate or associated person of a FINRA member
participating in the distribution of the Company’s Public
Securities.
3.22 Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
3.23 Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust Fund
to
be invested only in “government securities” with specific maturity dates or in
money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act as set forth in the Trust Agreement and disclosed
in
the Prospectus. The Company will otherwise conduct its business in a manner
so
that it will not become subject to the Investment Company Act. Furthermore,
once
the Company consummates a Business Combination, it will be engaged in a business
other than that of investing, reinvesting, owning, holding or trading
securities.
3.24 Business
Combination Announcement.
Within
five (5) Business Days following the consummation by the Company of a Business
Combination, the Company shall
cause an announcement (“Business
Combination
Announcement”)
to be
placed, at its cost, in The Wall Street Journal, The New York Times and a third
publication to be selected by the Representatives announcing the consummation
of
the Business
Combination
and
indicating that the Representatives were the co-managing underwriters in the
Offering (subject to an aggregate maximum amount of $10,000). The Company shall
supply the Representatives with a draft of the Business
Combination
Announcement and provide the Representatives with a reasonable advance
opportunity to comment thereon. The Company will not place the Business
Combination
Announcement without the final approval of the Representatives, which approval
will not be unreasonably withheld.
24
3.25 Colorado
Trust Filing.
In the
event the Securities are registered in the State of Colorado, the Company will
cause a Colorado Form ES to be filed with the Commissioner of the State of
Colorado no less than ten (10) days prior to the distribution of the Trust
Fund
in connection with a Business Combination and will do all things necessary
to
comply with Section 00-00-000 and Rule 51-3.4 of the Colorado Securities
Act.
3.26 Press
Releases.
The
Company agrees it will not issue press releases or engage in any other
publicity, without Chardan’s prior written consent (not to be unreasonably
withheld), for a period of forty (40) days after the Closing Date.
3.27 Reserved.
3.28 Electronic
Prospectus. The
Company shall cause to be prepared and delivered to the Representatives, at
its
expense, within one (1) Business Day from the effective date of this Agreement,
an Electronic Prospectus
to be used by the Underwriters in connection with the Offering. As used herein,
the term “Electronic
Prospectus”
means
a
form of prospectus, and any amendment or supplement thereto, that meets each
of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representatives, that may be transmitted electronically
by
the other Underwriters to offerees and purchasers of the Units for at least
the
period during which a Prospectus relating to the Units is required to be
delivered under the Securities Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to XXXXX, except to the
extent that graphic and image material cannot be disseminated electronically,
in
which case such graphic and image material shall be replaced in the electronic
prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to the
Representatives, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt
of a request by an investor or his or her representative within the period
when
a prospectus relating to the Units is required to be delivered under the
Securities Act, the Company shall transmit or cause to be transmitted promptly,
without charge, a paper copy of the Prospectus.
3.29 Reservation
of Shares.
The
Company will reserve and keep available that maximum number of its authorized
but unissued securities which are issuable upon exercise of the Warrants and
the
Representatives’ Purchase Option, Representatives’ Warrants and the Placement
Warrants outstanding from time to time.
25
3.30 Board
Advisor.
The
Company agrees that it will, upon completion of the proposed public offering
contemplated herein, for a period of no less than two (2) years, engage a
designee of Chardan as an advisor (“Advisor”)
to its
Board of Directors where such Advisor shall attend meetings of the Board,
receive all notices and other correspondence and communications sent by the
Company to members of its Board of Directors provided, that such Advisor shall
not be entitled to any compensation, other than reimbursement for all costs
incurred in attending such meetings including, food, lodging, and transportation
(for U.S. coach travel). The Company further agrees that, during said two (2)
year period, it shall schedule no less than four (4) meetings of its Board
of
Directors in each such year at which meetings such Advisor shall be permitted
to
attend as set forth herein; said meetings shall be held quarterly each year
and
ten (10) days advance notice of such meetings shall be given to the Advisor.
Further, during such two (2) year period, the Company shall give notice to
Chardan with respect to any proposed acquisitions, mergers, reorganizations
or
other similar transactions. The Company shall indemnify and hold such Advisor
harmless against any and all claims, actions, damages, costs and expenses,
and
judgments arising solely out of the attendance and participation of such Advisor
at any such meeting described herein, and, if the Company maintains a liability
insurance policy affording coverage for the acts of its officers and directors,
it shall, if possible, include such Advisor as an insured under such
policy.
3.31 Reserved.
3.32 Private
Placement Proceeds.
Immediately upon establishment of the Trust Fund and prior to the Closing,
the
Company shall deposit $1,425,000 of the proceeds from the Private Placement
in
the Trust Fund and shall provide the Representatives with evidence of the
same.
3.33 No
Amendment to Charter.
(i) The
Company covenants and agrees it will not seek to amend or modify provisions
(A)
- (H) of Article Sixth of its Amended and Restated Articles
of
Incorporation without the prior approval of holders of 95% or more of the
Company’s IPO Shares (as defined in Section 7.6(ii) of this
Agreement).
(ii) The
Company acknowledges that the purchasers of the Firm Units and Option Units
in
this Offering shall be deemed to be third party beneficiaries of Section 3.33
of
this Agreement.
(iii) The
Representatives and the Company specifically agree that, except pursuant to
its
own terms, this Section 3.33 shall not be modified or amended in any
way.
3.34 Financial
Printer.
The
Company shall retain a financial printer, reasonably acceptable to the
Representatives, for the purpose of facilitating the Company’s XXXXX filings and
the printing of the Preliminary Prospectus and Prospectus.
4. Conditions
of Underwriters’ Obligations.
The
obligations of the several Underwriters to purchase and pay for the Units,
as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and the Option Closing Date, if any, to the accuracy
of
the statements of officers of the Company made pursuant to the provisions hereof
and to the performance by the Company of its obligations hereunder and to the
following conditions:
26
4.1
Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by the Representatives, 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 R&P.
4.1.2
FINRA
Clearance.
By the
Effective Date, the Representatives shall have received clearance from the
FINRA
as to the amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3 No
Commission Stop Order.
At each
of the Closing Date and the Option Closing Date, the Commission has not issued
any order or threatened to issue any order preventing or suspending the use
of
any Preliminary Prospectus or the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such
an
order.
4.1.4 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by the
Representatives pursuant to Section 3.3 hereof shall have been issued on either
the Closing Date or the Option Closing Date, and no proceedings for that purpose
shall have been instituted or shall be contemplated.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel.
On the
Closing Date, the Representatives shall have received the favorable opinion
of
Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C. (“Xxxxx
Xxxxx”),
counsel to the Company, dated the Closing Date, addressed to the Representatives
and in form and substance satisfactory to the Representatives 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 jurisdiction of incorporation, with
full
power and authority to own its properties and conduct its business as described
in the Registration Statement, the Preliminary Prospectus and the
Prospectus.
(ii) All
issued and outstanding securities of the Company (including, without limitation,
the Placement Securities) 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 Amended and Restated Articles of
Incorporation or By-laws of the Company. Except with respect to the Placement
Securities which are not covered by this opinion, the offers and sales of the
outstanding Common Stock were at all relevant times either registered under
the
Act and, to our knowledge, the applicable state securities or Blue Sky Laws
or
exempt from such registration requirements. The authorized capital stock of
the
Company is as set forth in the Preliminary Prospectus and the Prospectus. The
Units, the Common Stock and the Warrants conform to the descriptions thereof
contained in the Registration Statement, the Preliminary Prospectus and the
Prospectus.
27
(iii) 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 arising by operation of law or under
the
Amended and Restated Articles of Incorporation or By-laws of the Company or,
to
such counsel’s knowledge, similar rights that entitle or will entitle any person
to acquire any security from the Company upon issuance or sale thereof. When
issued, the Representatives’ Purchase Option, the Representatives’ 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
Representatives’ Purchase Option and the Representatives’ Warrants, when issued,
in each case, will be enforceable against the Company in accordance with their
respective terms, except: (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (b) as enforceability of any indemnification or contribution
provision may be limited under the United States and state securities laws;
and
(c) 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. The
certificates representing the Securities are in due and proper form. A
sufficient number of shares of Common Stock have been reserved for issuance
upon
exercise of the Representatives’ Purchase Option, the Warrants and the
Representatives’ Warrants. The shares of Common Stock underlying the
Representatives’ Purchase Option, the Warrants and Representatives’ Warrants
will, upon exercise of the Representatives’ Purchase Option, the Warrants and
the Representatives’ Warrants and payment of the exercise price thereof, be duly
and validly issued, fully paid and non-assessable and will not have been issued
in violation of or subject to, to such counsel’s knowledge, preemptive or
similar rights that entitle or will entitle any person to acquire, to such
counsel’s knowledge, any securities from the Company upon issuance
thereof.
(iv) The
Placement Warrants 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 Placement 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 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. A sufficient number of shares of Common
Stock have been reserved for issuance upon exercise of the Placement Warrants.
The shares of Common Stock underlying the Placement Warrants will, upon exercise
thereof and payment of the exercise price therefor, be duly and validly issued,
fully paid and non-assessable and will not have been issued in violation of
or
subject to, to such counsel’s knowledge, preemptive or similar rights that
entitle or will entitle any person to acquire any securities from the Company
upon issuance thereof.
28
(v) The
Company has full corporate right, power and authority to execute and deliver
this Agreement, the Warrant Agreement, the Service Agreement, the Trust
Agreement, the Subscription Agreement, the Stock Escrow Agreement, the Warrant
Escrow Agreement and the Representatives’ Purchase Option and to perform its
obligations thereunder, and all corporate action required to be taken for the
due and proper authorization, execution and delivery of this Agreement, the
Warrant Agreement, the Service Agreement, the Trust Agreement, the Subscription
Agreement, the Stock Escrow Agreement, the Warrant Escrow Agreement and the
Representatives’ Purchase Option has been duly and validly taken.
(vi) This
Agreement, the Warrant Agreement, the Service Agreement, the Trust Agreement,
the Subscription Agreement, the Stock Escrow Agreement, the Warrant Escrow
Agreement and the Representatives’ Purchase Option have each 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, except: (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (b) as enforceability of any
indemnification or contribution provisions may be limited under the United
States and state securities laws; and (c) 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.
(vii) The
execution, delivery and performance of this Agreement, the Warrant Agreement,
the Representatives’ Purchase Option, the Stock Escrow Agreement, the Warrant
Escrow Agreement, the Trust Agreement, the Subscription Agreement and the
Service 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 Amended and Restated Articles of
Incorporation or the By-laws of the Company; or (c) to such counsel’s knowledge,
violate any statute or any judgment, order or decree, rule or regulation
applicable to the Company of any court, domestic or foreign, or of any federal,
state or other regulatory authority or other governmental body having
jurisdiction over the Company, its properties or assets.
29
(viii) The
Registration Statement, each Preliminary Prospectus and the Prospectus and
any
post-effective amendments or supplements thereto (other than the financial
statements included therein, 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, the Preliminary
Prospectus and the Prospectus.
(ix) 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.
(x) To
such
counsel’s knowledge, there is no action, suit or other proceeding before or by
any court of governmental agency or body, domestic or foreign, now pending,
or
threatened against the Company that is required to be described in the
Registration Statement that is not so described.
(xi) No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any judicial, regulatory or other
legal or governmental agency or body is required for the execution, delivery
and
performance by the Company of the Underwriting Agreement or consummation by
the
Company of the transactions contemplated by the Underwriting Agreement, the
Registration Statement, Preliminary Prospectus and the Prospectus, except for:
(a) such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Units by the Underwriters
(as to which such counsel need express no opinion); (b) such as have been made
or obtained under the Securities Act; and (c) such as are required by the FINRA.
(xii) The
statements under the captions “Description of Securities” and Item 14 of Part II
of the Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters, documents
and proceedings.
The
opinion of counsel shall further include a statement to the effect that 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, Preliminary Prospectus, 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, Preliminary Prospectus
and
the Prospectus (except as otherwise set forth in this opinion), no facts have
come to the attention of such counsel which lead them to believe that either
the
Registration Statement, Preliminary Prospectus 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 schedules and other financial and statistical data
included in the Registration Statement, Preliminary Prospectus or the
Prospectus). The opinion of counsel shall state that such counsel is not opining
as to the Placement Securities with respect to any rights to rescind or the
effect any exercise of such rights will have on any other securities of the
Company or on the Offering.
30
4.2.2 Option
Closing Date Opinion of Counsel.
On each
Option Closing Date, if any, the Representatives shall have received the
favorable opinion of Xxxxx Xxxxx, dated each Option Closing Date, addressed
to
the Representatives and in form and substance reasonably satisfactory to counsel
to the Representatives, confirming as of each Option Closing Date, the
statements made by Xxxxx Xxxxx in its opinion delivered on the Closing
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, 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 the Representatives) of other
counsel reasonably acceptable to the Representatives, 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 jurisdiction 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.
4.3 Cold
Comfort Letter.
At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, Representatives shall have received a letter, addressed
to
the Representatives and in form and substance satisfactory in all respects
(including the non-material nature of the changes or decreases, if any, referred
to in clause (iii) below) to Representatives and to R&P from AP&M dated,
respectively, as of the date of this Agreement and as of the Closing Date and
the Option Closing Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during
the periods covered by the financial statements included in the Registration
Statement, the Preliminary Prospectus and 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, the Preliminary Prospectus and the Prospectus comply
as
to form in all material respects with the applicable accounting requirements
of
the Act and the published Regulations thereunder;
31
(iii) Stating
that, on the basis of a limited review which included 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, the Preliminary Prospectus
and the Prospectus 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, Preliminary
Prospectus and the Prospectus; (b) at a date not later than five (5) 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 October 1, 2007 balance sheet included in the Registration
Statement, the Preliminary Prospectus and the Prospectus, other than as set
forth in or contemplated by the Registration Statement, the Preliminary
Prospectus and the Prospectus, or, if there was any decrease, setting forth
the
amount of such decrease; and (c) during the period from October 1, 2007 (balance
sheet date) to a specified date not later than five (5) 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, the
Preliminary Prospectus and the Prospectus, or, if there was any such decrease,
setting forth the amount of such decrease;
(iv) Stating
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 Registration Statement, the Preliminary Prospectus
and 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;
(v) Stating
they have not, since inception, provided the Company’s management with any
written communication in accordance with Statement on Auditing Standards No.
60
“Communication of Internal Control Structure Related Matters Noted in an Audit”;
and
(vi) Statements
as to such other matters incident to the transaction contemplated hereby as
the
Representatives may reasonably request.
4.4 Officers’
Certificates.
32
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representatives
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 Representatives will have received such other and further certificates
of
officers of the Company as the Representatives may reasonably
request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representatives
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 Amended
and Restated Articles 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.
4.5 No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any: (i)
there shall have been no material adverse change or development involving a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement
and
Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have
been pending or threatened against the Company or any Initial Stockholder before
or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations, prospects or financial condition
or
income of the Company, except as set forth in the Registration Statement, the
Preliminary Prospectus and Prospectus; (iii) no stop order shall have been
issued under the Act and no proceedings therefor shall have been initiated
or
threatened by the Commission; and (iv) the Registration Statement, the
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto shall contain all material statements which are required to be stated
therein in accordance with the Act and the Regulations and shall conform in
all
material respects to the requirements of the Act and the Regulations, and
neither the Registration Statement, the Preliminary Prospectus nor the
Prospectus nor any amendment or supplement thereto shall contain any untrue
statement of a material fact or omits to state any material fact required to
be
stated therein or necessary to make the statements therein (in the case of
the
Prospectus, in light of the circumstances under which they were made), not
misleading.
4.6 Delivery
of Agreements.
33
4.6.1 Effective
Date Deliveries.
On the
Effective Date, the Company shall have delivered to the Representatives executed
copies of the Stock Escrow Agreement, Warrant Escrow Agreement, the Trust
Agreement, the Warrant Agreement, the Service Agreement, all of the Insider
Letters and the Subscription Agreement.
4.6.2
Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representatives and their
designees executed copies of the Representatives’ Purchase Option.
4.7 Secondary
Market Trading Survey.
On the
Closing Date, the Representatives shall have received the Secondary Market
Trading Survey from R&P.
5. Indemnification.
5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters and each dealer selected by Representatives
that participates in the offer and sale of the Units (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 federal, state
or
local statute, law, rule, regulation or ordinance or at common law or otherwise
or under the laws, rules and regulation 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 Representatives’ 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 OTC Bulletin Board or 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 the Prospectus, or any amendment or supplement thereof. With
respect to any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Prospectus, the indemnity agreement contained
in this paragraph shall not inure to the benefit of any Underwriter to the
extent that any loss, liability, claim, damage or expense of such Underwriter
results from the fact that a copy of the Prospectus was not given or sent to
the
person asserting any such loss, liability, claim or damage at or prior to the
written confirmation of sale of the Securities to such person as required by
the
Act and the Regulations, and if the untrue statement or omission has been
corrected in the Prospectus, unless such failure to deliver the Prospectus
was a
result of non-compliance by the Company with its obligations under Section
3.4
hereof. The Company agrees promptly to notify the Representatives 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 Preliminary Prospectus, the
Registration Statement, or the Prospectus.
34
5.1.2
Procedure.
If any
action is brought against an Underwriter or Controlling Person in respect of
which indemnity may be sought against the Company pursuant to Section 5.1.1,
such Underwriter 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) and payment of actual expenses. Such Underwriter 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 or such 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; (ii) the Company
shall not have employed counsel 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 selected by the
Underwriter and/or Controlling Person shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if the Underwriter
or
Controlling Person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment
or
supplement thereto, or in any Application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto or in any such Application, which furnished
written information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto or any Application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
35
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.
5.3.2 Contribution
Procedure.
Within
fifteen (15) 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 (15) 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.
36
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
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, the Representatives may in their discretion
arrange for themselves 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 (1) Business Day after such default relating to more
than
10% of the Firm Units or Option Units, the Representatives 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 (1) Business Day within which to procure
another party or parties satisfactory to the Company and the Representatives
to
purchase said Firm Units or Option Units on such terms. In the event the
Representatives do not arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
may be terminated by the Company without liability on the part of the Company
(except as provided in Sections 3.13 and 5 hereof) or the several Underwriters
(except as provided in Section 5 hereof); provided,
however,
that if
such default occurs with respect to the Option Units, this Agreement will not
terminate as to the Firm Units; and provided
further
that
nothing herein shall relieve a defaulting Underwriter of its liability, if
any,
to the other several Underwriters and to the Company for damages occasioned
by
its default hereunder.
6.3 Postponement
of Closing Date.
In the
event the Firm Units or Option Units to which the default relates are to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, the Representatives or the Company shall have
the
right to postpone the Closing Date or Option Closing Date for a reasonable
period, but not in any event exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus, as the case may
be,
or in any other documents and arrangements, and the Company agrees to file
promptly any amendment to, or to supplement, the Registration Statement, the
Preliminary Prospectus and/or the Prospectus, as the case may be, that in the
opinion of counsel for the Underwriters may thereby be made necessary. The
term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party
to
this Agreement with respect to such Securities.
37
7. Additional
Covenants.
7.1 Additional
Shares or Options.
The
Company hereby agrees that until the Company consummates a Business Combination,
it shall not issue any shares of Common Stock or any options or other securities
convertible into Common Stock, or any shares of Preferred Stock which
participate in any manner in the Trust Fund or which vote as a class with the
Common Stock on a Business Combination.
7.2 Trust
Fund Waiver Acknowledgments.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business or businesses which the Company seeks to acquire
(each, a “Target
Business”)
or
obtain the services of any vendor unless and until such Target Business or
vendor acknowledges in writing, whether through a letter of intent, memorandum
of understanding or other similar document (and subsequently acknowledges the
same in any definitive document replacing any of the foregoing), that: (i)
it
has read the Prospectus and understands that the Company has established the
Trust Fund, initially in an amount of $35,314,000 (which includes $1,080,000
of
deferred underwriting discounts and which does not give effect to any exercise
of the Over-allotment Option) for the benefit of the Public Stockholders and
that, except for a portion of the interest earned on the amounts held in the
Trust Fund, the Company may disburse monies from the Trust Fund only: (a) to
the
Public Stockholders in the event of the redemption of their shares or the
dissolution and liquidation of the Trust Fund as part of the Company’s plan of
dissolution and liquidation; or (b) to the Company after it consummates a
Business Combination; and (ii) for and in consideration of the Company (A)
agreeing to evaluate such Target Business for purposes of consummating a
Business Combination with it; or (B) agreeing to engage the services of the
vendor, as the case may be, such Target Business or vendor agrees that it does
not have any right, title, interest or claim of any kind in or to any monies
of
the Trust Fund (“Claim”)
and
waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever. The
foregoing letters shall substantially be in the form attached hereto
as Exhibit
A
and B,
respectively. Furthermore, each officer and director of the Company shall
execute a waiver letter in the form attached hereto as Exhibit
C.
7.3 Insider
Letters.
The
Company shall not take any action or omit to take any action which would cause
a
breach of any of the Insider Letters executed between each Initial Stockholder
and the Representatives or the Subscription Agreement and will not allow any
amendments to, or waivers of, such Insider Letters or the Subscription Agreement
without the prior written consent of the Representatives.
7.4 Amended
and Restated Articles of Incorporation and By-laws.
The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Amended and Restated Articles
of
Incorporation or By-laws. Subject to Section 3.33, prior to the consummation
of
a Business Combination, the Company will not amend its Amended and Restated
Articles of Incorporation, without the prior written consent of the
Representatives.
38
7.5 Blue
Sky Requirements.
The
Company shall provide counsel to the Representatives with ten copies of all
proxy information and all related material filed with the Commission in
connection with a Business Combination concurrently with such filing with the
Commission. In addition, the Company shall furnish any other state in which
its
initial public offering was registered, such information as may be requested
by
such state.
7.6 Acquisition/Liquidation
Procedure.
(i) The
Company agrees: (a) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company’s stockholders for their approval
(“Business
Combination Vote”)
even
if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law; and (b) that, in the event
that
the Company does not effect a Business Combination within eighteen (18) months
from the consummation of this Offering (subject to extension for an additional
six (6) month period or upon the prior consent of the holders of 95% of the
Company’s Common Stock, each as described in the Prospectus) (the “Termination
Date”),
the
Company shall take all action necessary to dissolve the Corporation and
liquidate the Trust Account to holders of IPO Shares (as defined below) as
soon
as reasonably practicable, in accordance with the laws of the Republic of
Xxxxxxxx Islands. Upon liquidation of the Trust Account, the Company will
distribute to all holders of IPO Shares an aggregate sum equal to $7.85 per
IPO
Share (plus a portion of the interest earned, but net of (i) taxes payable
on
interest earned, and (ii) up to $1,000,000 of interest income released to the
Company to fund its working capital), plus a pro rata share of any remaining
net
assets, subject to any valid claims by the Company’s creditors that are not
covered by amounts held in the Trust Fund or the indemnities provided by the
Company’s directors and officers. Only holders of IPO Shares shall be entitled
to receive liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of capital stock of the Company,
including the shares of Common Stock underlying the Placement Warrants.
(ii)
With
respect to the Business Combination Vote, the Company shall use its best efforts
to cause all of the Initial Stockholders to vote the shares of Common Stock
owned by them immediately prior to this Offering in accordance with the majority
of the IPO Shares voted by the holders of the IPO Shares in connection with
the
Business Combination Vote. At the time the Company seeks approval of any
potential Business Combination, the Company will offer each of the holders
of
Common Stock issued in this Offering (the “IPO
Shares”)
the
right to convert their IPO Shares at a per share price equal to $7.85 (the
“Conversion
Price”)
(plus
a portion of the interest earned, but net of (i) taxes payable on interest
earned, and (ii) up to $1,000,000 of interest income released to the Company
to
fund its working capital). If holders of one share less than 30.00% of the
Company’s IPO Shares vote against such approval of a Business Combination, the
Company may, but will not be required to, proceed with such Business
Combination. If the Company elects to so proceed, it will convert shares, based
upon the Conversion Price, from those holders of IPO Shares who affirmatively
requested such conversion and who voted against the Business Combination. If
holders of 30.00% or more in interest of the IPO Shares vote against approval
of
any potential Business Combination, the Company will not proceed with such
Business Combination and will not convert such shares. Only holders of IPO
Shares shall be entitled to receive liquidating distributions and the Company
shall pay no liquidating distributions with respect to any other shares of
capital stock of the Company.
39
7.7 Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including, but not limited to, using its best efforts
to
prevent any of the Company’s outstanding securities from being deemed to be a
“xxxxx stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8 Presentation
of Potential Target Businesses.
The
Company shall cause each of the Initial Stockholders to agree that, in order
to
minimize potential conflicts of interest which may arise from multiple
affiliations, the Initial Stockholders will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire an operating business, until the earlier of
the
consummation by the Company of a Business Combination, the liquidation of the
Company, subject to any pre-existing fiduciary obligations the Initial
Stockholders might have.
7.9 Target
Fair Market Value.
The
Company agrees that the initial Target Business that it acquires must have
a
fair market value equal to at least 80% of the amount held in the Company’s
Trust Fund (excluding the deferred underwriting compensation payable to the
Representatives) at the time of such acquisition. The fair market value of
such
business must be determined by the Board of Directors of the Company based
upon
standards generally accepted by the financial community, such as actual and
potential sales, earnings and cash flow and book value. If the Board of
Directors of the Company is not able to independently determine that the Target
Business has a fair market value of at least 80% of the amount in the Trust
Fund
(excluding the deferred underwriting compensation payable to the
Representatives) at the time of such acquisition, the Company will obtain an
opinion from an unaffiliated, independent investment banking firm which may
or
may not be a member of the FINRA with respect to the satisfaction of such
criteria. The Company is not required to obtain an opinion from an investment
banking firm as to the fair market value if the Company’s Board of Directors
independently determines that the Target Business does have sufficient fair
market value.
8. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date or the Option Closing Date, if
any, and such representations, warranties and agreements of the Underwriters
and
Company, including the indemnity agreements contained in Section 5 hereof,
shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, the Company or any Controlling Person,
and shall survive termination of this Agreement or the issuance and delivery
of
the Securities to the several Underwriters until the earlier of the expiration
of any applicable statute of limitations and the seventh anniversary of the
later of the Closing Date or the Option Closing Date, if any, at which time
the
representations, warranties and agreements shall terminate and be of no further
force and effect.
40
9. Effective
Date of This Agreement and Termination Thereof.
9.1 Effective
Date.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
9.2 Termination.
The
Representatives 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 the Representatives’ opinions 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 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 OTC Bulletin Board or by order of the Commission
or any other government authority having jurisdiction; or (iii) if the United
States or any Asian country (as defined in the Prospectus) shall have become
involved in a 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 the Representatives’ opinions,
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 Representatives 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 Representatives’ 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.
9.3 Expenses.
In the
event this Agreement shall not be carried out for any reason whatsoever, except
as a result of the Representatives’ or any underwriters’ breach or default with
respect to any of its material obligations pursuant to this Agreement, within
the time specified herein or any extensions thereof pursuant to the terms
herein, the obligations of the Company to pay the out-of-pocket expenses
actually incurred by the Representatives related to the transactions
contemplated herein shall be governed by Section 3.13 hereof.
9.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be
in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered by hand or reputable
overnight courier or delivered by facsimile transmission (with printed
confirmation of receipt) and confirmed and shall be deemed given when so mailed,
delivered or faxed (or if mailed, two (2) days after such mailing):
41
If
to the
Representatives:
Ladenburg
Xxxxxxxx & Co. Inc.
000
Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn.:
[Ÿ]
Fax:
[Ÿ]
and
Chardan
Capital Markets, LLC
00
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
Attn.:
[Ÿ]
Fax:
[Ÿ]
Copy
to:
Xxxxxxxxxx
& Xxxxx LLP
000
Xxxxxxxxx Xxxxxx, 00xx xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx X. Xxxxxxx, Esq.
Fax:
(000) 000-0000
If
to the
Company:
00
Xxx
Xxxx
Xxx
Xx
Xxxxx Xxxxxxxx
Xxxxx,
Xxxxxxx
Attn.:
Xxxx Xxxxx, President
Fax:
[Ÿ]
Copy
to:
Xxxxx
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn.:
Xxxxxxx X. Xxxx, Esq.
Fax:
(000) 000-0000
42
10.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
10.3 Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
10.4 Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the Controlling Persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or
be construed to have any legal or equitable right, remedy or claim under or
in
respect of or by virtue of this Agreement or any provisions herein
contained.
10.6 Governing
Law, Venue, etc.
10.6.1 This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to the conflict of laws
principles thereof. Each
of
the Representatives and the Company (and any individual signatory hereto):
(i)
agrees that any legal suit, action or proceeding arising out of or relating
to
this agreement and/or the transactions contemplated hereby shall be instituted
exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York; (ii) waives any
objection which such party may have or hereafter to the venue of any such suit,
action or proceeding; and (iii) irrevocably and exclusively consents to the
jurisdiction of the New York Supreme Court, County of New York, and the United
States District Court for the Southern District of New York in any such suit,
action or proceeding.
10.6.2 Each
of
the Representatives and the Company (and any individual signatory hereto)
further agrees to accept and acknowledge service of any and all process which
may be served in any such suit, action or proceeding in the New York Supreme
Court, County of New York, or in the United States District Court for the
Southern District of New York and agrees that service of process upon the
Company or any such individual mailed by certified mail to the Company’s address
shall be deemed in every respect effective service of process upon the Company
or any such individual in any such suit, action or proceeding, and service
of
process upon the Representatives mailed by certified mail to the
Representatives’ addresses shall be deemed in every respect effective service
process upon the Representatives, in any such suit, action or
proceeding.
10.6.3 THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION
WITH
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT AND THE PROSPECTUS.
43
10.6.4 The
Company agrees that the prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of its reasonable attorneys’
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
10.7 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by fax or email/.pdf
transmission shall constitute valid and sufficient delivery
thereof.
10.8 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
10.9 No
Fiduciary Relationship.
The
Company hereby acknowledges that the Underwriters are acting solely as
underwriters in connection with the offering of the Company’s securities. The
Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an
arm’s length basis and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company, its management,
stockholders, creditors or any other person in connection with any activity
that
the Underwriters may undertake or have undertaken in furtherance of the offering
of the Company’s securities, either before or after the date hereof. The
Underwriters hereby expressly disclaim any fiduciary or similar obligations
to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
44
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,
|
||||
|
|
|
|
||||
|
|
|
|||||
|
|
|
|
|
|
||
|
|
|
|
|
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||
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By:
|
|
|
||
|
|
|
|
Name:
|
Xxxx
Xxxxx
|
||
|
|
|
|
Title:
|
President
|
||
|
Agreed
to and accepted on the date first above written.
|
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|
|||||
|
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|
||||||
|
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|
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|||||
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Ladenburg
Xxxxxxxx & Co. Inc.
as
Representative of the several Underwriters
|
|||||||||
|
By:
|
|||||||||
|
Name:
|
|||||||||
|
Title:
|
|||||||||
|
Chardan
Capital Markets, LLC,
as
Representative of the several Underwriters
|
|||||||||
|
By:
|
|||||||||
|
Name:
|
Xxxxx
Xxxxxxx
|
||||||||
|
Title:
|
Chief
Executive Officer
|
||||||||
45
SCHEDULE
A
4,500,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|||
|
|
||||
|
Ladenburg
Xxxxxxxx & Co. Inc.
|
||||
|
|
||||
|
Chardan
Capital Markets, LLC
|
||||
|
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4,500,000
|
|||
46
EXHIBIT
A
Form
of Target Business Letter
00
Xxx
Xxxx
Xxx
Xx
Xxxxx Xxxxxxxx
Xxxxx,
Xxxxxxx
Attn.:
Xxxx Xxxxx, President
Gentlemen:
Reference
is made to the Final Prospectus of BBV Vietnam S.E.A. Acquisition
Corp.,
(the
“Company”),
dated
[Ÿ]
(the
“Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that the
Company
has
established the Trust Fund, initially in an amount of at least $35,314,000
for
the benefit of the Public Stockholders and the underwriters of the Company’s
initial public offering (the “Underwriters”) and that, except for up to
$1,000,000 of the interest earned on the amounts held in the Trust Fund,
the
Company
may
disburse monies from the Trust Fund only: (i) to the Public Stockholders in
the
event of the redemption of their shares or the dissolution and liquidation
of
the Company; (ii) to the
Company and the Underwriters
after it
consummates a Business Combination; or (iii) for the payment of
taxes.
For
and
in consideration of the
Company
agreeing
to evaluate the undersigned for purposes of consummating a Business Combination
with it, the undersigned hereby agrees that it does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund (the
“Claim”)
and
hereby 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.
|
Print
Name of Target Business
|
|
|
Authorized
Signature of Target Business
|
47
EXHIBIT
B
Form
of Vendor Letter
00
Xxx
Xxxx
Xxx
Xx
Xxxxx Xxxxxxxx
Xxxxx,
Xxxxxxx
Attn.:
Xxxx Xxxxx, President
Gentlemen:
Reference
is made to the Final Prospectus of BBV Vietnam S.E.A. Acquisition Corp. (the
“Company”),
dated
[Ÿ]
(the
“Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that the
Company
has
established the Trust Fund, initially in an amount of at least $35,314,000
for
the benefit of the Public Stockholders and the underwriters of the
Company’s
initial
public offering (the “Underwriters”) and that, except for up to $1,000,000 of
the interest earned on the amounts held in the Trust Fund, the
Company may
disburse monies from the Trust Fund only: (i) to the Public Stockholders in
the
event of the redemption of their shares or the dissolution and liquidation
of
the
Company;
(ii) to
the
Company and
the
Underwriters after it consummates a Business Combination; or (iii) for the
payment of taxes.
For
and
in consideration of the
Company agreeing
to use the products or services of the undersigned, the undersigned hereby
agrees that it does not have any right, title, interest or claim of any kind
in
or to any monies in the Trust Fund (the “Claim”)
and
hereby 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.
|
Print
Name of Vendor
|
|
|
Authorized
Signature of Vendor
|
48
EXHIBIT
C
Form
of Director/Officer Letter
00
Xxx
Xxxx
Xxx
Xx
Xxxxx Xxxxxxxx
Xxxxx,
Xxxxxxx
Attn:
Xxxx Xxxxx, President
Gentlemen:
The
undersigned officer or director of BBV Vietnam S.E.A. Acquisition Corp. (the
“Company”)
hereby
acknowledges that the
Company
has
established the Trust Fund, initially in an amount of at least $35,314,000
for
the benefit of the Public Stockholders and the underwriters of the
Company’s
initial
public offering (the “Underwriters”) and that, except for up to $1,000,000 of
the interest earned on the amounts held in the Trust Fund, the
Company
may
disburse monies from the Trust Fund only: (i) to the Public Stockholders in
the
event of the redemption of their shares or the dissolution and liquidation
of
the
Company;
(ii) to
the
Company
and the
Underwriters after it consummates a Business Combination; or (iii) for the
payment of taxes.
The
undersigned hereby agrees that it does not have any right, title, interest
or
claim of any kind in or to any monies in the Trust Fund (the “Claim”)
and
hereby waives any Claim it 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 Fund for any reason whatsoever.
Notwithstanding
the foregoing, such waiver shall not apply to any shares acquired by the
undersigned in the public market.
|
Print
Name of Officer/Director
|
|
|
Authorized
Signature of Officer/Director
|
49
