EXHIBIT 1.1
UNDERWRITING
AGREEMENT
between
MILLENNIUM INDIA ACQUISITION
COMPANY INC.
and
LADENBURG THALMANN & CO.
INC.
Dated:
, 2006
MILLENNIUM INDIA ACQUISITION COMPANY
INC.
UNDERWRITING
AGREEMENT
New York, New York
,
2006
Ladenburg Thalmann & Co.
Inc.
590 Madison Avenue, 34th
Floor
New York, New York 10022
Dear Sirs:
The undersigned, Millennium India
Acquisition Company Inc., a Delaware corporation (“
Company ”), hereby confirms its agreement with
Ladenburg Thalmann & Co. Inc. (being referred to herein
variously as “ you ,” “ Ladenburg
” or the “ Representative ”) and with the
other underwriters named on Schedule I hereto for which Ladenburg
is acting as Representative (the “Representative” and
together with the other underwriters, 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 10,000,000
units (“ Firm Units ”) of the Company, at a
purchase price (net of discounts) of $7.60 per Firm Unit (excluding
discounts of $0.08 per Firm Unit payable to the Underwriters, as
well as $1,325,000 of a $1,400,000, or 1.75% non-accountable
expense allowance payable to the Representative 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 of $0.08, or $1,325,000
non-accountable expense allowance 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 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) of $7.60
per Firm Unit. 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 $.001 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 in
Section 2.1.1 hereof) unless
Ladenburg informs the Company of its decision to allow earlier
separate trading, but in no event will Ladenburg 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 a Current Report on Form 8-K with
the Securities and Exchange Commission (the “
Commission ”) by the Company which includes such
balance sheet and (ii) at least 5 days have passed since the
distribution of the Units (as defined below) in the Offering has
been completed. 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 the
Effective Date (or the fourth 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
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:
$77,600,000 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 The Depository Trust Company
(“ DTC ”)) for the account of the Underwriters.
The Firm Units shall be registered in such name or names and in
such authorized denominations as the Representative may request in
writing at least two full business days prior to the Closing Date.
The Company will permit the Representative to examine and package
the Firm Units for delivery at least one full business day prior to
the Closing Date. The Company shall not be obligated to sell or
deliver the Firm Units except upon tender of payment by the
Representative for all the Firm Units.
1.2. 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 1,500,000 units from the Company (“
Over-allotment Option ”). Such additional 1,500,000
units are hereinafter referred to as “ Option Units
.” The Firm Units and the Option Units are
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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 (from time to time) of the Option Units within 45
days after the Effective Date. The Underwriters will not be under
any obligation to purchase any Option Units prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted
hereby may be exercised by the giving of oral notice to the Company
by the Representative, which must be confirmed in writing by
overnight mail or facsimile transmission setting forth the number
of Option Units to be purchased and the date and time for delivery
of and payment for the Option Units (the “ Option Closing
Date ”), which will not be later than five full business
days after the date of the notice or such other time as shall be
agreed upon by the Company and the Representative, at the offices
of the Representative or at such other place as shall be agreed
upon by the Company and the Representative. Upon exercise of the
Over-allotment Option, the Company will become obligated to convey
to the Underwriters, and, subject to the terms and conditions set
forth herein, the Underwriters will become obligated to purchase,
the number of Option Units specified in such notice.
1.2.3 Payment and Delivery .
Payment for the Option Units shall be made on the Option Closing
Date at the Representative’s election by wire transfer in
Federal (same day) funds or by certified or bank cashier’s
check(s) in New York Clearing House funds, payable as follows:
$7.76 per Option Unit 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 DTC) for the account
of the Underwriters. The certificates representing the Option Units
to be delivered will be in such denominations and registered in
such names as the Representative requests not less than two full
business days prior to the Closing Date or the Option Closing Date,
as the case may be, and will be made available to the
Representative for inspection, checking and packaging at the
aforesaid office of the Company’s transfer agent or
correspondent not less than one full business day prior to such
Closing Date.
1.3. Representative’s
Purchase Option .
1.3.1 Purchase Option . The
Company hereby agrees to issue and sell to the Representative
(and/or their designees) on the Effective Date an option (“
Representative’s Purchase Option ”) for the
purchase of an aggregate of 1,000,000 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 30 days from the date it
becomes exerciseable at an initial exercise price per
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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 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.
1.3.2 Payment and Delivery .
Delivery and payment for the Representative’s Purchase Option
shall be made on the Closing Date. The Company shall deliver to the
Underwriters, upon payment therefor, certificates for the
Representative’s Purchase Option in the name or names and in
such authorized denominations as the Representative may
request.
2. 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 000-
) 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.
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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, 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
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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.
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 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 . 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
. J.H. Cohn LLP (“ J.H. Cohn ”), whose report is
filed with the Commission as part of the Registration Statement,
are independent accountants as required by the Act and the
Regulations. J.H. Cohn 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
6
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 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 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
7
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.
2.9. 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 2.20 hereof), the Trust Agreement, the
Escrow Agreement (as defined in Section 2.21.2 hereof) and the
Registration Rights Agreement (as defined in Section 2.21.3
hereof) have been duly and validly authorized by the Company and
constitute, and the Representative’s Purchase Option has 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 and the 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 referred to in
Section 2.22 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, 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
8
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. D&O Questionnaires
. To the best of the Company’s knowledge, all information
contained in the questionnaires (“ Questionnaires
”) completed by each of the Company’s stockholders
immediately prior to the Offering (“ Initial
Stockholders ”) and provided to the Underwriters as an
exhibit to his or her Insider Letter (as defined in
Section 2.21.1) 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 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 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,
9
except where the failure to qualify would not
have a material adverse effect on the assets, business or
operations of the Company.
2.17. Transactions Affecting
Disclosure to NASD .
2.17.1 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
”).
2.17.2 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 Ladenburg.
2.17.3 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.
2.17.4 Insiders’ NASD
Affiliation . Based on the Questionnaires, except as set forth
on Schedule 2.17.4, 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.
2.18. 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
Prospectus or (iii) if not continued in the future, might
adversely affect the assets, business, operations or
prospects
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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.
2.19. 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.
2.20. Warrant Agreement . The
Company has entered into a warrant agreement with respect to the
Warrants and the Representative’s Warrants with Continental
Stock Transfer & Trust Company substantially in the form
annexed as Exhibit 4.5 to the Registration Statement (“
Warrant Agreement ”).
2.21. Agreements With Initial
Stockholders .
2.21.1 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
10.3, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9 to the Registration
Statement (“ Insider Letters ”), pursuant to
which each of the 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.
2.21.2 Escrow Agreement . The
Company and the Initial Stockholders have entered into an escrow
agreement (“ Escrow Agreement ”) with American
Stock Transfer & Trust Company (“ Escrow
Agent ”) substantially in the form annexed as Exhibit
10.2 to the Registration Statement, whereby the Common Stock owned
by the Initial Stockholders will be held in escrow by the Escrow
Agent, until the six-month anniversary of the 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 Ladenburg.
2.21.3 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 10.11 to the Registration Statement,
whereby
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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. 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 10.1 to the Registration
Statement.
2.23. 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.
2.24. 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 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.
2.25. Subsidiaries . The
Company does not own an interest in any corporation, partnership,
limited liability company, joint venture, trust or other business
entity.
2.26. 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 Prospectus that have not been
described as required.
2.27. Loans . F. Jacob
Cherian, Suhel Kanuga and Kishore Mirchandani have made loans to
the Company in the aggregate amount of $125,000 (the “
Insider Loans ” substantially in the form annexed as
Exhibit 10.10 to the Registration Statement. The Insider Loans do
not bear any interest and are repayable by the Company on the
earlier to occur of (i) September 30, 2006 or
(ii) the date on which the Company consummates an initial
public offering of its securities.
2.28. American Stock Exchange
Eligibility . As of the Effective Date, the Public Securities
have been approved for listing on the American Stock Exchange
(“ AMEX ”).
3. Covenants of the Company .
The Company covenants and agrees as follows:
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
12
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, Common Stock or Warrants under the Exchange
Act without the prior written consent of Ladenburg.
3.3. Blue Sky Filings . The
Company will endeavor in good faith, in cooperation with the
Representative, 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
Representative 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 Representative
agrees 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.
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
13
of each Preliminary Prospectus and the
Prospectus as such Underwriters may reasonably request and, as soon
as the Registration Statement or any amendment or supplement
thereto becomes effective, deliver to you 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 Representative . The Company will use
its best efforts to cause the Registration Statement to remain
effective and will notify the Representative 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 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 or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in
order to make the statements therein, 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 . For a period of five years from the Effective
Date, or until such earlier time upon which the Company is required
to be liquidated, the Company, 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. In
connection with any Business Combination, the Company will obtain
from each of its Initial Stockholders a certificate, sworn to under
penalty of perjury, confirming that none of such individuals has
any affiliation, whether directly or indirectly, with respect to
the potential target business for such Business Combination. Such
certificates will be included in the Current Report on Form 8-K
filed by the Company with the SEC announcing the signing of a
definitive agreement for such Business Combination. Furthermore,
the Company will not consummate any Business Combination unless the
Company obtains an opinion from an independent investment banking
firm that the Business Combination is fair to the Company’s
stockholders from a financial perspective.
14
3.7.2 Compensation . Except
for the repayment of the Insider Loans, the Company shall not pay
any Initial Stockholder or any of their affiliates any fees or
compensation, prior to, or in connection with, the consummation of
a Business Combination; provided that the Initial Stockholders
shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with
seeking and consummating a Business Combination.
3.8. Secondary Market Trading and
Standard & Poor’s . If the Company does not
maintain the listing of the Public Securities on the AMEX or
another national securities exchange, the Company will apply to be
included in Standard & Poor’s Daily News and
Corporation Records Corporate Descriptions for a period of five
years from the
