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Exhibit 1.1
UNDERWRITING AGREEMENT
BETWEEN
INTER-ATLANTIC FINANCIAL, INC.
AND
MORGAN JOSEPH & CO. INC.
DATED: ____________, 2007
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INTER-ATLANTIC FINANCIAL, INC.
UNDERWRITING AGREEMENT
New York, New York
____________, 2007
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19th Floor
New York, New York 10020
Dear Sirs:
The undersigned, Inter-Atlantic Financial, Inc., a Delaware
corporation ("Company"), hereby confirms its agreement with Morgan
Joseph & CO.
Inc. (being referred to herein variously as "you," "MJ" or the
"Representative")
and with the other underwriters named on Schedule I hereto for
which MJ is
acting as Representative (the Representative and the other
Underwriters being
collectively called 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 7,500,000 units ("Firm
Units") of the
Company, at a purchase price (net of discounts and commissions) of
$7.60 per
Firm Unit (including discounts and commissions of $0.16 that will
not be paid to
the Underwriters unless and until a Business Combination (as
defined below) has
been consummated by the Company). The Underwriters, severally and
not jointly,
agree that they will not seek payment of the discounts and
commissions of $0.16
referred to in the preceding sentence unless and until a Business
Combination
has been consummated by the Company, and the Company agrees that it
shall pay
such discounts and commissions only upon consummation of such
Business
Combination. 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 I attached hereto and made a part hereof at a purchase
price (net of
discounts and commissions) of $7.60 per Firm Unit (including
discounts and
commissions of $0.16 that will not be paid to the Underwriters
unless and until
a Business Combination has been consummated by the Company). The
Firm Units are
to be offered initially to the public ("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 ("Common Stock"), and one
warrant
("Warrant(s)"). The shares of Common Stock and the Warrants
included in the Firm
Units will not be separately transferable until 90 days after the
effective date
("Effective Date") of the Registration Statement (as defined below)
unless MJ
informs the Company of its decision to allow earlier separate
trading, but in no
event will MJ allow separate trading until 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 a Current
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Report on Form 8-K with the Securities and Exchange Commission
(the
"Commission") by the Company which includes such balance sheet and
the
Over-allotment Option (as defined below) has either expired or been
exercised.
Each Warrant entitles its holder to exercise it to purchase one
share of Common
Stock for $6.00 during the period commencing on the later of the
consummation by
the Company of its "Business Combination" or one year from the
Effective Date
and terminating on the four-year anniversary of the Effective Date.
"Business
Combination" shall mean any merger, capital stock exchange, asset
acquisition or
other similar business combination consummated by the Company with
an operating
business (as described more fully in the Registration
Statement).
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 business
day following
commencement of trading of the Firm Units or at such earlier time
as shall be
agreed upon by the Representative and the Company at the offices of
the
Representative or at such other place as shall be agreed upon by
the
Representative and the Company. The hour and date of delivery and
payment for
the Firm Units are called "Closing Date." Payment for the Firm
Units shall be
made on the Closing Date at the Representative's election by wire
transfer in
Federal (same day) funds or by certified or bank cashier's check(s)
in New York
Clearing House funds, payable as follows: $56,400,000 of the
proceeds received
by the Company for the Firm Units shall be deposited in the trust
fund
established by the Company for the benefit of the public
stockholders as
described in the Registration Statement ("Trust Fund") pursuant to
the terms of
an Investment Management Trust Agreement ("Trust Agreement") and
the remaining
proceeds shall be paid (subject to Section 3.13 hereof) to the
order of the
Company upon delivery to you of certificates (in form and substance
satisfactory
to the Underwriters) representing the Firm Units (or through the
facilities of
American Stock Transfer & Trust Company ("AST")) for the
account of the
Underwriters. The Firm Units shall be registered in such name or
names and in
such authorized denominations as the Representative may request in
writing at
least two full business days prior to the Closing Date. The Company
will permit
the Representative to examine and package the Firm Units for
delivery at least
one full business day prior to the Closing Date. The Company shall
not be
obligated to sell or deliver the Firm Units except upon tender of
payment by the
Representative for all the Firm Units.
1.2
Over-Allotment Option.
1.2.1 Option Units. For the purposes of covering any
over-allotments
in connection with the distribution and sale of the Firm Units, the
Underwriters
are hereby granted, severally and not jointly, an option to
purchase up to an
additional 1,125,000 units from the Company ("Over-allotment
Option"). Such
additional 1,125,000 units are hereinafter referred to as "Option
Units." The
Firm Units and the Option Units are hereinafter collectively
referred to as the
"Units," and the Units, the shares of Common Stock and 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 will be the same
price per Option
Unit as the price per Firm Unit set forth in Section 1.1.1
hereof.
1.2.2 Exercise of Option. The Over-allotment Option granted
pursuant
to Section 1.2.1 hereof may be exercised by the Representative as
to all (at any
time) or any part
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(from time to time) of the Option Units within 45 days after the
Effective Date.
The Underwriters will not be under any obligation to purchase any
Option Units
prior to the exercise of the Over-allotment Option. The
Over-allotment Option
granted hereby may be exercised by the giving of oral notice to the
Company by
the Representative, which must be confirmed in writing by overnight
mail or
facsimile transmission setting forth the number of Option Units to
be purchased
and the date and time for delivery of and payment for the Option
Units (the
"Option Closing Date"), which will not be later than five full
business days
after the date of the notice or such other time as shall be agreed
upon by the
Company and the Representative, at the offices of the
Representative or at such
other place as shall be agreed upon by the Company and the
Representative. Upon
exercise of the Over-allotment Option, the Company will become
obligated to
convey to the Underwriters, and, subject to the terms and
conditions set forth
herein, the Underwriters will become obligated to purchase, the
number of Option
Units specified in such notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall be
made
on the Option Closing Date at the Representative's election by wire
transfer in
Federal (same day) funds or by certified or bank cashier's check(s)
in New York
Clearing House funds, payable as follows: approximately $7.60 per
Option Unit
(including discounts and commissions of $0.16 that will not be paid
to the
Underwriters unless and until a Business Combination has been
consummated by the
Company) shall be deposited in the Trust Fund pursuant to the Trust
Agreement
upon delivery to you of certificates (in form and substance
satisfactory to the
Underwriters) representing the Option Units (or through the
facilities of AST)
for the account of the Underwriters. The certificates representing
the Option
Units to be delivered will be in such denominations and registered
in such names
as the Representative requests not less than two full business days
prior to the
Closing Date or the Option Closing Date, as the case may be, and
will be made
available to the Representative for inspection, checking and
packaging at the
aforesaid office of the Company's transfer agent or correspondent
not less than
one full business day prior to such Closing Date.
1.3
Representative's Purchase Option.
1.3.1 Purchase Option. The Company hereby agrees to issue and sell
to
the Representative (and/or its designees) on the Effective Date an
option
("Representative's Purchase Option") for the purchase of an
aggregate of 525,000
units ("Representative's Units") for an aggregate purchase price of
$100. Each
of the Representative's Units is identical to the Firm Units.
The
Representative's Purchase Option shall be exercisable, in whole or
in part,
commencing on the later of the consummation of a Business
Combination and one
year from the Effective Date and expiring on the four-year
anniversary of the
Effective Date at an initial exercise price per Representative's
Unit of $10.00
(125% of the initial public offering price of a Unit). The
Representative's
Purchase Option, the Representative's Units, the Warrants included
in the
Representative's Units ("Representative's Warrants") and the shares
of Common
Stock issuable upon exercise of the Representative's Warrants are
hereinafter
referred to collectively as the "Representative's Securities." The
Public
Securities and the Representative's Securities are hereinafter
referred to
collectively as the "Securities." The Representative understands
and agrees that
there are significant restrictions against transferring the
Representative's
Purchase Option during the first year after the Effective Date, as
set forth in
Section 3 of the Representative's Purchase Option.
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1.3.2 Payment and Delivery. Delivery and payment for the
Representative's Purchase Option shall be made on the Closing Date.
The Company
shall deliver to the Representative, upon payment therefor,
certificates for the
Representative's Purchase Option in the name or names and in such
authorized
denominations as the Representative may request.
2. 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
Commission a
registration statement and an amendment or amendments thereto, on
Form S-1 (File
No. 333-_______), including any related preliminary prospectus
("Preliminary
Prospectus"), for the registration of the Public Securities under
the Securities
Act of 1933, as amended ("Act"), which registration statement and
amendment or
amendments have been prepared by the Company in conformity with the
requirements
of the Act, and the rules and regulations ("Regulations") of the
Commission
under the Act. Except as the context may otherwise require, such
registration
statement, as amended, on file with the Commission at the time the
registration
statement becomes effective (including the prospectus, financial
statements,
schedules, exhibits and all other documents filed as a part thereof
or
incorporated therein and all information deemed to be a part
thereof as of such
time pursuant to paragraph (b) of Rule 430A of the Regulations), is
hereinafter
called the "Registration Statement," and the form of the final
prospectus dated
the Effective Date included in the Registration Statement (or, if
applicable,
the form of final prospectus filed with the Commission pursuant to
Rule 424 of
the Regulations), is hereinafter called the "Prospectus." The
Registration
Statement has been declared effective by the Commission on the date
hereof.
2.1.2 Pursuant to the Exchange Act. The Company has filed with
the
Commission a Form 8-A (File Number 001-______) providing for the
registration
under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), of the
Units, the Common Stock and the Warrants. The registration of the
Units, Common
Stock and Warrants under the Exchange Act has been declared
effective by the
Commission on the date hereof.
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.
2.3
Disclosures in Registration Statement.
2.3.1 10b-5 Representation. At the time the Registration
Statement
became effective and at all times subsequent thereto up to the
Closing Date and
the Option Closing Date, if any, the Registration Statement and the
Prospectus
does and will contain all material statements that are required to
be stated
therein in accordance with the Act and the Regulations, and will in
all material
respects conform to the requirements of the Act and the
Regulations; neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement
thereto,
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on such dates, does 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 light of the circumstances under
which they were
made, not misleading. When any Preliminary Prospectus was first
filed with the
Commission (whether filed as part of the Registration Statement for
the
registration of the Securities or any amendment thereto or pursuant
to Rule
424(a) of the Regulations) and when any amendment thereof or
supplement thereto
was first filed with the Commission, such Preliminary Prospectus
and any
amendments thereof and supplements thereto complied or will comply
in all
material respects with the applicable provisions of the Act and the
Regulations
and did not and will not contain an untrue statement of a material
fact or omit
to state any material fact required to be stated therein or
necessary in order
to make the statements therein, in light of the circumstances under
which they
were made, not misleading. The representation and warranty made in
this Section
2.3.1 does not apply to statements made or statements omitted in
reliance upon
and in conformity with written information furnished to the Company
with respect
to the Underwriters by the Representative expressly for use in the
Registration
Statement or Prospectus or any amendment thereof or supplement
thereto.
2.3.2 Disclosure of Agreements. The agreements and documents
described
in the Registration Statement and the Prospectus conform to the
descriptions
thereof contained therein and there are no agreements or other
documents
required to be described in the Registration Statement or the
Prospectus or to
be filed with the Commission as exhibits to the Registration
Statement, that
have not been so described or filed. Each agreement or other
instrument (however
characterized or described) to which the Company is a party or by
which its
property or business is or may be bound or affected and (i) that is
referred to
in the Prospectus, or (ii) is material to the Company's business,
has been duly
and validly executed by the Company, is in full force and effect
and is
enforceable against the Company and, to the Company's knowledge,
the other
parties thereto, in accordance with its terms, except (x) as such
enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting creditors' rights generally, (y) as enforceability of
any
indemnification or contribution provision may be limited under the
federal and
state securities laws, and (z) that the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
the equitable
defenses and to the discretion of the court before which any
proceeding therefor
may be brought, and none of such agreements or instruments has been
assigned by
the Company, and neither the Company nor, to the best of the
Company's
knowledge, any other party is in breach or default thereunder and,
to the best
of the Company's knowledge, no event has occurred that, with the
lapse of time
or the giving of notice, or both, would constitute a breach or
default
thereunder. To the best of the Company's knowledge, performance by
the Company
of the material provisions of such agreements or instruments will
not result in
a violation of any existing applicable law, rule, regulation,
judgment, order or
decree of any governmental agency or court, domestic or foreign,
having
jurisdiction over the Company or any of its assets or businesses,
including,
without limitation, those relating to environmental laws and
regulations.
2.3.3 Prior Securities Transactions. No securities of the Company
have
been sold by the Company or by or on behalf of, or for the benefit
of, any
person or persons controlling, controlled by, or under common
control with the
Company since the Company's formation, except as disclosed in the
Registration
Statement.
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2.3.4 Regulations. The disclosures in the Registration
Statement
concerning the effects of Federal, State and local regulation on
the Company's
business as currently contemplated are correct in all material
respects and do
not omit to state a material fact.
2.4
Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Change. Since the respective dates as
of
which information is given in the Registration Statement and the
Prospectus,
except as otherwise specifically stated therein, (i) there has been
no material
adverse change in the condition, financial or otherwise, or
business prospects
of the Company, (ii) there have been no material transactions
entered into by
the Company, other than as contemplated pursuant to this Agreement,
and (iii) no
member of the Company's management has resigned from any position
with the
Company.
2.4.2 Recent Securities Transactions, Etc. Subsequent to the
respective dates as of which information is given in the
Registration Statement
and the Prospectus, and except as may otherwise be indicated or
contemplated
herein or therein, the Company has not (i) issued any securities or
incurred any
liability or obligation, direct or contingent, for borrowed money;
or (ii)
declared or paid any dividend or made any other distribution on or
in respect to
its equity securities.
2.5
Independent Accountants. Rothstein Kass & Co., P.C. ("RKC"),
whose
report is filed with the Commission as part of the Registration
Statement, are
independent accountants as required by the Act and the Regulations.
RKC has not,
during the periods covered by the financial statements included in
the
Prospectus, provided to the Company any non-audit services, as such
term is used
in Section 10A(g) of the Exchange Act.
2.6
Financial Statements. The financial statements, including the
notes
thereto and supporting schedules included in the Registration
Statement and
Prospectus fairly present the financial position, the results of
operations and
the cash flows of the Company at the dates and for the periods to
which they
apply; and such financial statements have been prepared in
conformity with
United States 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. The summary financial data included in the Registration
Statement and
the Prospectus present fairly the information shown thereon and
have been
compiled on a basis consistent with the audited financial
statements presented
therein. No other financial statements or schedules are required to
be included
in the Registration Statement or the Prospectus. The Registration
Statement
discloses 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.
2.7
Authorized Capital; Options; Etc. The Company had at the date or
dates
indicated in the Prospectus duly authorized, issued and
outstanding
capitalization as set forth in the Registration Statement and the
Prospectus.
Based on the assumptions stated in the Registration
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Statement 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 and the Prospectus, on
the Effective
Date and on the Closing Date, 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.
2.8
Valid Issuance of Securities; Etc.
2.8.1 Outstanding Securities. All issued and outstanding securities
of
the Company have been duly authorized and validly issued and are
fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect
thereto, and are not subject to personal liability by reason of
being such
holders; and none of such securities were issued in violation of
the preemptive
rights of any holders of any security of the Company or similar
contractual
rights granted by the Company. The authorized Common Stock conforms
to all
statements relating thereto contained in the Registration Statement
and the
Prospectus. The offers and sales of the outstanding Common Stock
were at all
relevant times either registered under the Act and the applicable
state
securities or Blue Sky laws or are exempt from such registration
requirements.
2.8.2 Securities Sold Pursuant to this Agreement. The Securities
have
been duly authorized and, when issued and paid for in accordance
with this
Agreement, will be validly issued, fully paid and non-assessable;
the holders
thereof are not and will not be subject to personal liability by
reason of being
such holders; the Securities are not and will not be subject to the
preemptive
rights of any holders of any security of the Company or similar
contractual
rights granted by the Company; and all corporate action required to
be taken for
the authorization, issuance and sale of the Securities has been
duly and validly
taken. The Securities conform in all material respects to all
statements with
respect thereto contained in the Registration Statement. When
issued, the
Representative's Purchase Option, the Representative's Warrants and
the Warrants
will constitute valid and binding obligations of the Company to
issue and sell,
upon exercise thereof and payment of the respective exercise prices
therefor,
the number and type of securities of the Company called for thereby
in
accordance with the terms thereof and such Representative's
Purchase Option, the
Representative's Warrants and the Warrants are enforceable against
the Company
in accordance with their respective terms, except (i) as such
enforceability may
be limited by bankruptcy, insolvency, reorganization or similar
laws affecting
creditors' rights generally, (ii) as enforceability of any
indemnification or
contribution provision may be limited under the federal and state
securities
laws, and (iii) that the remedy of specific performance and
injunctive and other
forms of equitable relief may be subject to the equitable defenses
and to the
discretion of the court before which any proceeding therefor may be
brought.
2.8.3 Founders' Warrants. Messrs. ______, ______ and ______
(collectively, the "Founder Purchasers") have committed to
purchase, immediately
prior to the consummation of the Offering, an aggregate of
1,800,000 Warrants
(the "Founders' Warrants" and together with the shares of Common
Stock
underlying the Founders' Warrants, collectively referred to as the
"Founders'
Securities") at $1.00 per Warrant (for an aggregate purchase price
of
$1,800,000) from the Company upon consummation of the Offering. The
Founders'
Securities have been
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duly authorized and, when issued and paid for in accordance with
the
subscription agreements (the "Subscription Agreements") the
Founders' Warrants
will be validly issued, fully paid and non-assessable and the
shares of Common
Stock underlying the Founders' Warrants when issued and paid for in
accordance
with their terms 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 Founders' 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 Founders'
Securities has been duly and validly taken.
2.9 Registration Rights of
Third Parties. Except as set forth in 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 2.21 hereof), the Trust Agreement,
the Services
Agreement (as defined in Section 2.29 hereof), the Subscription
Agreements, the
Escrow Agreement (as defined in Section 2.22.2 hereof), the
Registration Rights
Agreement (as defined in Section 2.22.3 hereof) and the
Representative's
Purchase Option have been duly and validly authorized by the
Company and, when
executed and delivered, will constitute, the 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, the
Representative's Purchase
Option, the Trust Agreement, the Services Agreement, the
Subscription Agreements
and the Escrow Agreements, 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 referred to in Section 2.24 hereof; (ii) result
in any
violation of the provisions of the Certificate of Incorporation or
the Bylaws of
the Company; or (iii) 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.
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,
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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
Certificate of Incorporation or Bylaws or in violation of any
material
franchise, license, permit, 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
purpose as described in the Prospectus. The disclosures in the
Registration
Statement concerning the effects of federal, state and local
regulation on this
offering and the Company's business purpose as currently
contemplated are
correct in all material respects and do not omit to state a
material fact
required to be stated therein or necessary in order to make the
statements
therein, in light of the circumstances under which they were made,
not
misleading.
2.13.2 Transactions Contemplated Herein. The Company has all
corporate
power and authority to enter into this Agreement 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, the Representative's Purchase Option, the
Trust Agreement
and the Escrow Agreement and as contemplated by the Prospectus,
except with
respect to applicable federal and state securities laws.
2.14
Questionnaires. To the best of the Company's knowledge, all
information contained in the questionnaires ("Questionnaires")
completed by each
of the Company's stockholders immediately prior to the Offering
("Initial
Stockholders") and provided to the Underwriters as an exhibit to
his, her or its
Insider Letter (as defined in Section 2.22.1) 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 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, that is
required to be
disclosed, in the Registration Statement or the Questionnaires.
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
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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 assets, business or
operations of the
Company.
2.17
Stop Orders. The Commission has not issued any order preventing
or
suspending the use of any Preliminary Prospectus or Prospectus or
any part
thereof and has not threatened to issue any such order.
2.18
Transactions Affecting Disclosure to NASD.
2.18.1 Finder's Fees. Except as described in the Prospectus, there
are
no claims, payments, arrangements, agreements or understandings
relating to the
payment of a finder's, consulting or origination fee by the Company
or any
Initial Stockholder with respect to the sale of the Securities
hereunder or any
other arrangements, agreements or understandings of the Company or,
to the best
of the Company's knowledge, any Initial Stockholder that may affect
the
Underwriters' compensation, as determined by the National
Association of
Securities Dealers, Inc. ("NASD").
2.18.2 Payments Within Twelve Months. The Company has not made
any
direct or indirect payments (in cash, securities or otherwise) (i)
to any
person, as a finder's fee, consulting fee or otherwise, in
consideration of such
person raising capital for the Company or introducing to the
Company persons who
raised or provided capital to the Company (ii) to any NASD member
or (iii) to
any person or entity that has any direct or indirect affiliation or
association
with any NASD member, within the twelve months prior to the
Effective Date,
other than payments to MJ.
2.18.3 Use of Proceeds. None of the net proceeds of the Offering
will
be paid by the Company to any participating NASD member or its
affiliates,
except as specifically authorized herein and except as may be paid
in connection
with a Business Combination as contemplated by the Prospectus.
2.18.4 Insiders' NASD Affiliation. Based on the Questionnaires,
except
as set forth on Schedule 2.18.4, no officer, director or any
beneficial owner of
the Company's unregistered securities has any direct or indirect
affiliation or
association with any NASD member. The Company will advise the
Representative and
its counsel if it learns that any officer, director or beneficial
owner of at
least 5% of the Company's outstanding Common Stock is or becomes an
affiliate or
associated person of an NASD member.
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
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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
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.
2.20
Officers' Certificate. Any certificate signed by any duly
authorized
officer of the Company and delivered to you or to your counsel
shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters
covered thereby.
2.21
Warrant Agreement. The Company has entered into a warrant
agreement
with respect to the Warrants, the Insider Warrants and the
Representative's
Warrants with AST substantially in the form annexed as Exhibit 4.4
to the
Registration Statement ("Warrant Agreement").
2.22
Agreements With Initial Stockholders.
2.22.1 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) substantially in the form
annexed as Exhibit
10.1 to the Registration Statement ("Insider Letters"), pursuant to
which each
of the Initial Stockholders of the Company agrees 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.
2.22.2 Escrow Agreement.
(i) The Company and the Initial Stockholders have entered into
an
escrow agreement ("Escrow Agreement") with AST ("Escrow Agent")
substantially
in the form annexed as Exhibit 10.3 to the Registration Statement,
whereby the
Common Stock owned by the Initial Stockholders will be held in
escrow by the
Escrow Agent, until one year after the consummation of a Business
Combination.
During such escrow period, the Initial Stockholders shall be
prohibited from
selling or otherwise transferring such shares (except to spouses
and children of
Initial Stockholders and trusts established for their benefit and
as otherwise
set forth in the Escrow Agreement) but will retain the right to
vote such
shares. To the Company's knowledge, the Escrow Agreement is
enforceable against
each of the Initial Stockholders and will not, with or without the
giving of
notice or the lapse of time or both, result in a breach of, or
conflict with any
of the terms and provisions of, or constitute a default under, any
agreement or
instrument to which any of the Initial Stockholders is a party. The
Escrow
Agreement shall not be amended, modified or otherwise changed
without the prior
written consent of MJ.
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2.22.3 Registration Rights Agreement. The Company and the
Initial
Stockholders have entered into a registration rights agreement
("Registration
Rights Agreement") substantially in the form annexed as Exhibit
10.4 to the
Registration Statement, whereby the Initial Stockholders will be
entitled to
certain registration rights as set forth in such Registration
Rights Agreement
and described more fully in the Registration Statement.
2.22.4 Subscription Agreement. The Company and the Founder
Purchasers
have entered into Subscription Agreements substantially in the form
annexed as
Exhibit 10.__ to the Registration Statement to purchase the
Founders' Warrants.
Pursuant to the Subscription Agreements, the Founder Purchasers
have placed the
purchase price for the Founders' Warrants in escrow prior to the
date hereof.
Simultaneously with the consummation of the Offering, such purchase
price shall
be deposited into the Trust Fund pursuant to the Trust
Agreement.
2.22.5 Revolving Line of Credit. The Company and Inter-Atlantic
Management Services LLC (the "Affiliate") have entered into a
subordinated
revolving line of credit facility (the "Credit Facility"), the form
of which is
annexed as Exhibit 10.__ to the Registration Statement whereby the
Affiliate has
agreed to provide the Company with a revolving line of credit under
which the
Company may have up to $500,000 of outstanding borrowings at any
time. The
Credit Facility terminates upon the earlier of the completion of a
Business
Combination or the Company's dissolution and liquidation. The
Credit Facility
bears interest at the rate of __% per annum. [Principal and
interest owed by the
Company under the Credit Facility will be payable only if it
consummates a
Business Combination.]
2.23
Sarbanes-Oxley. There is and has been no failure on the part of
the
Company or any of the Company's directors or officers, in their
capacities as
such, to comply with (as and when applicable), and immediately
following the
effectiveness of the Registration Statement the Company will be in
compliance
with, Sections 301, 402, 802 and 1102 of the Sarbanes-Oxley Act of
2002, as
amended, and the rules and regulations promulgated by the
Commission and the
American Stock Exchange ("AMEX") thereunder (the "Sarbanes-Oxley
Act"), and Part
8 of the AMEX's "AMEX Company Guide," as amended. Further, there is
and has been
no failure on the part of the Company or any of the Company's
directors or
officers, in their capacities as such, to comply with (as and when
applicable),
and immediately following the effectiveness of the Registration
Statement the
Company will be in compliance with, all other applicable provisions
of the
Sarbanes-Oxley Act and the AMEX corporate governance requirements
set forth in
the AMEX Company Guide, as amended.
2.24
Investment Management Trust Agreement. The Company has entered
into
the Trust Agreement with respect to certain proceeds of the
Offering
substantially in the form annexed as Exhibit 10.2 to the
Registration Statement.
2.25
Covenants Not to Compete. No Initial Stockholder, employee, officer
or
director 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
and/or director of the Company.
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2.26
Investment Company Act; Investments. The Company has been
advised
concerning the Investment Company Act of 1940, as amended (the
"Investment
Company Act"), and the rules and regulations thereunder and has in
the past
conducted, and intends in the future to conduct, its affairs in
such a manner as
to ensure that it will not become an "investment company" or a
company
"controlled" by an "investment company" within the meaning of the
Investment
Company Act and such rules and regulations. The Company is not, nor
will the
Company become upon the sale of the Units and the application of
the proceeds
therefore as described in the Registration Statement and the
Prospectus under
the caption "Use of Proceeds", an "investment company" or a person
controlled by
an "investment company" within the meaning of the Investment
Company Act. No
more than 45% of the "value" (as defined in Section 2(a)(41) of the
Investment
Company Act) of the Company's total assets (exclusive of cash items
and
"Government Securities" (as defined in Section 2(a)(16) of the
Investment
Company Act) consist of, and no more than 45% of the Company's net
income after
taxes is derived from, securities other than the Government
Securities.
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. There are no business relationships
or
related party transactions involving the Company or any other
person required to
be described in the Preliminary Prospectus or the Prospectus that
have not been
described as required.
2.29
Administrative Services. The Company has entered into an
agreement
("Services Agreement") with the Affiliate substantially in the form
annexed as
Exhibit 10.5 to the Registration Statement pursuant to which the
Affiliate will
make available to the Company general and administrative services
including
office space, utilities, administrative, technology and secretarial
services for
the Company's use for $7,500 per month for up to 24 months.
2.30
Loans. The Affiliate has made a loan to the Company in the
aggregate
amount of $250,000 (the "Insider Loan") substantially in the form
annexed as
Exhibit 10.7 to the Registration Statement. The Insider Loan does
not bear any
interest and is to be repaid by the Company out of the proceeds of
the Offering
not being deposited in the Trust Fund.
2.31
American Stock Exchange Eligibility. As of the Effective Date,
the
Public Securities have been approved for listing on the AMEX. There
is and has
been no failure on the part of the Company or any of the Company's
directors or
officers, in their capacities as such, to comply with (as and when
applicable),
and immediately following the effectiveness of the Registration
Statement the
Company will be in compliance with, Part 8 of the AMEX's AMEX
Company Guide, as
amended.
2.32
Rule 419 Under the Act. Upon delivery and payment for the Firm
Units
on the Closing Date, the Company will not be subject to Rule 419
under the Act
and none of the Company's outstanding securities will be deemed to
be a "penny
stock" as defined in rule 3a-51-1 under the Exchange Act.
3. Covenants of the Company. The Company covenants and agrees as
follows:
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3.1
Amendments to Registration Statement. The Company will deliver to
the
Representative, 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 Representative
shall
reasonably object in writing.
3.2
Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is required to
be
delivered under the Act, the Company will use all reasonable
efforts to comply
with all requirements imposed upon it by the Act, the Regulations
and the
Exchange Act and by the regulations under the Exchange Act, as from
time to time
in force, so far as necessary to permit the continuance of sales of
or dealings
in the Public Securities in accordance with the provisions hereof
and the
Prospectus. If at any time when a Prospectus relating to the Public
Securities
is required to be delivered under the Act, any event shall have
occurred as a
result of which, in the opinion of counsel for the Company or
counsel for the
Underwriters, the Prospectus, as then amended or supplemented,
includes an
untrue statement of a material fact or omits to state any material
fact required
to be stated therein or necessary to make the statements therein,
in light of
the circumstances under which they were made, not misleading, or if
it is
necessary at any time to amend the Prospectus to comply with the
Act, the
Company will notify the Representative promptly and prepare and
file with the
Commission, subject to Section 3.1 hereof, an appropriate amendment
or
supplement in accordance with Section 10 of the Act.
3.2.2 Filing of Final Prospectus. The Company will file the
Prospectus
(in form and substance satisfactory to the Representative) with the
Commission
pursuant to the requirements of Rule 424 of the Regulations.
3.2.3 Exchange Act Registration. 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 for a period of five years from the
Effective
Date, or until the Company is required to be liquidated if earlier,
or, in the
case of the Warrants, until the Warrants expire and are no longer
exercisable.
The Company will not deregister the Units under the Exchange Act
without the
prior written consent of MJ.
3.2.4 Ineligible Issuer. At the time of filing the Registration
Statement and at the date hereof, the Company was and is an
"ineligible issuer,"
as defined in Rule 405 under the Securities Act. The Company has
not made and
will not make any offer relating to the Public Securities that
would constitute
an "issuer free writing prospectus," as defined in Rule 433, or
that would
otherwise constitute a "free writing prospectus," as defined in
Rule 405.
3.2.5 Sarbanes-Oxley Act. The Company (i) has taken all
necessary
actions to ensure that it is in compliance with all provisions of
the
Sarbanes-Oxley Act that are in effect and with which the Company is
required to
comply, (ii) will take all necessary actions to ensure that, upon
and at all
times after the effectiveness of the Registration Statement, it
will be in
compliance with all applicable provisions of the Sarbanes-Oxley Act
not
currently in effect upon the effectiveness of su
