UNDERWRITING AGREEMENT
BETWEEN
RENAISSANCE ACQUISITION CORP.
AND
LADENBURG THALMANN & CO. INC.
DATED:
, 2006
-----------
RENAISSANCE ACQUISITION CORP.
UNDERWRITING AGREEMENT
New York, New York
, 2006
------------
Ladenburg Thalmann & Co. Inc.
153 East 53rd Street, 49th Floor
New York, New York 10022
Dear Sirs:
The undersigned, Renaissance Acquisition Corp., 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
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 14,500,000 units
("Firm
Units") of the Company, at a purchase price (net of discounts and
commissions) of $5.64 per Firm Unit (including discounts and
commissions of
$0.06 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 $0.06 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 $5.64 per Firm
Unit.
The Firm Units are to be offered initially to the public
("Offering") at
the offering price of $6.00 per Firm Unit. Each Firm Unit consists
of one
share of the Company's common stock, par value $.0001 per share
("Common
Stock"), and two warrants ("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 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.
Each
Warrant entitles its holder to exercise it to purchase one share of
Common
Stock for $5.00 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
1
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: $81,950,000 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 2,175,000 units from the Company
("Over-allotment Option"). Such additional 2,175,000 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 (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:
$5.70 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)
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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
_______ 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 five-year
anniversary of the Effective Date at an initial exercise price per
Representative's Unit of $____ (___% 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.
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.
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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, 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
4
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.
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. Eisner LLP ("Eisner"), whose report is
filed
with the Commission as part of the Registration Statement, are
independent
accountants as required by the Act and the Regulations. Eisner 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 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
5
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 Insider Warrants. RAC Partners LLC (the "Insider Purchaser"),
an
affiliate of the Company's Chairman and Chief Executive Officer,
has
committed to purchase an aggregate of 2,833,333 Warrants ("Insider
Warrants" and together with the shares of Common Stock underlying
the
Insider Warrants, collectively referred to as the "Insider
Securities") at
$0.60 per Warrant (for an aggregate purchase price of
$1,699,999.80) from
the Company upon consummation of the Offering. The Insider
Securities have
been duly authorized and, when issued and paid for in accordance
with the
subscription agreements ("Subscription Agreements") and the Insider
Warrants, will be validly issued, fully paid and non-assessable;
the
holders thereof are not and will not be subject to personal
liability by
reason of being such holders; the Insider Securities are not and
will not
be subject to the preemptive rights of any holders of any security
of the
Company or similar contractual rights granted by the Company; and
all
corporate action required to be taken for the authorization,
issuance and
sale of the Insider Securities has been duly and validly taken.
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
6
hereof), the Subscription Agreements, the Escrow Agreements (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, 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.
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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, 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 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 Ladenburg.
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
8
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 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 Continental Stock Transfer & Trust Company
substantially in the
form annexed as Exhibit 4.5 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) annexed as
Exhibits
10.1 through 10.6 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 Agreements.
(i) The Company and the Initial Stockholders have entered into an
escrow agreement ("Initial Share Escrow Agreement") with
Continental
Stock Transfer & Trust Company ("Escrow Agent") substantially
in the
form annexed as Exhibit 10.8 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 Ladenburg.
(ii) The Company and the Insider Purchaser have entered into an
escrow agreement ("Insider Warrant Escrow Agreement" and together
with
the Initial Share Escrow Agreement, the "Escrow Agreements") with
Continental Stock Transfer & Trust Company ("Escrow Agent")
substantially in the form annexed as Exhibit 10.9 to the
Registration
Statement, whereby the Insider Warrants owned by the Insider
Purchaser
will be held in escrow by the Escrow Agent, until 30 days after the
consummation of a
9
Business Combination. During such escrow period, the Insider
Purchaser
shall be prohibited from selling or otherwise transferring such
Insider Warrants (except for certain exceptions set forth in the
Escrow Agreement). To the Company's knowledge, the Escrow Agreement
is
enforceable against the Insider Purchaser 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
the
Insider Purchaser is a party. The Insider Warrant Escrow Agreement
shall not be amended, modified or otherwise changed without the
prior
written consent of Ladenburg.
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 10.12 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 has entered into the
Subscription Agreement substantially in the form annexed as Exhibit
10.13
to the Registration Statement with the Insider Purchaser to
purchase the
Insider Warrants. Pursuant to the Subscription Agreements, the
Insider
Purchaser has placed the purchase price for the Insider 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.
2.23 Intentionally Omitted.
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 10.7 to the
Registration Statement.
The Trust Agreement will provide that there may be released to the
Company
interest earned on the funds held pursuant to the Trust Agreement
to fund (i)
expenses related to investigating and selecting a target business
and the
Company's other working capital requirements in an amount up to
$1,800,000 and
(ii) income and other taxes.
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.
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 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.
10
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 Prospectus that have not been described as
required.
2.29 Administrative Services. The Company has entered into an
agreement
("Services Agreement") with BMD Management Company, Inc.
("Affiliate")
substantially in the form annexed as Exhibit 10.10 to the
Registration Statement
pursuant to which the Affiliate will make available to the Company
general and
administrative services including office space, utilities and
secretarial
support for the Company's use for $8,000 per month.
2.30 Loans. Barry W. Florescue has made a loan to the Company in
the
aggregate amount of $150,000 (the "Insider Loan") substantially in
the form
annexed as Exhibit 10.11 to the Registration Statement. The Insider
Loan does
not bear any interest and is repayable by the Company on the
earlier to occur of
(i) April 30, 2007 or (ii) the date on which the Company
consummates an initial
public offering of its securities.
2.31 American Stock Exchange Eligibility. As of the Effective Date,
the
Public Securities have been approved for listing on the American
Stock Exchange
("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
American Stock Exchange's Company Guide, as amended.
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 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 Ladenburg.
11
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.
3.3 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 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
