Exhibit 10.7
_________ __, 2005
Xxxxxx Xxxxxx & Co. Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Stone Arcade Acquisition Corporation
Gentlemen:
This letter will confirm the agreement of the undersigned to purchase
warrants ("Warrants") of Stone Arcade Acquisition Corporation ("Company")
included in the units ("Units") being sold in the Company's initial public
offering ("IPO") upon the terms and conditions set forth herein. Each Unit is
comprised of one share of Common Stock and two Warrants. The shares of Common
Stock and Warrants will not be separately tradeable until 20 trading days
following the earlier to occur of the expiration of the underwriters'
over-allotment option or its exercise in full unless Xxxxxx Xxxxxx & Co. Inc.,
as representative of the underwriters ("Xxxxxx Xxxxxx"), informs the Company of
its decision to allow earlier separate trading.
Each of the undersigned agrees that this letter agreement constitutes an
irrevocable order for Xxxxxx Xxxxxx to purchase for the undersigned's account,
within the forty-trading day period commencing on the date separate trading of
the Warrants commences ("Separation Date"), as many Warrants as are available
for purchase at market prices not to exceed $.70 per Warrant, subject to a
maximum Warrant purchase obligation equal to the number of Warrants set forth
opposite their respective names below ("Maximum Warrant Purchase"). Xxxxxx
Xxxxxx (or such other broker dealer(s) as Xxxxxx Xxxxxx may assign the order
to) agrees to fill such order in such amounts and at such times as it may
determine, in its sole discretion, during the forty trading-day period
commencing on the Separation Date. Xxxxxx Xxxxxx further agrees that it will not
charge the undersigned any fees and/or commissions with respect to such purchase
obligation.
The undersigned may notify Xxxxxx Xxxxxx that all or part of the
Maximum Warrant Purchase will be made by one or more affiliates of the
undersigned (or another person or entity introduced to Xxxxxx Xxxxxx by the
undersigned (a "Designee")) who (or which) has an account at Xxxxxx Xxxxxx and,
in such event, Xxxxxx Xxxxxx will make such purchase on behalf of said affiliate
or Designee; provided, however, that the undersigned hereby agree to make
payment of the purchase price of such purchase and to fulfill their Maximum
Warrant Purchase in the event and to the extent that their affiliate or Designee
fails to make such payment or purchase.
Each of the undersigned agrees that neither he nor any affiliate or
Designee of his shall sell or transfer the Warrants until after the consummation
of a merger, capital stock exchange, asset acquisition or other similar business
combination with an operating business and acknowledges that, at the option of
Xxxxxx Xxxxxx, the certificates for such Warrants shall contain a legend
indicating such restriction on transferability.
Very truly yours, Maximum Warrant Purchase
------------------------
Xxxxx X. Xxxxx 1,100,000
------------------------
Xxxxxxx Xxxxxx 1,100,000
------------------------
Xxxx X. Xxxxxxx 600,000
------------------------
Xxxxxxxx X. Xxxxx 600,000
------------------------
Xxxxx X. Xxxxxx 600,000
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4,000,000
2
