GENERAL FINANCE
CORPORATION
WEDBUSH MORGAN
SECURITIES
Dated: January [
l
], 2006
GENERAL FINANCE
CORPORATION
New York, New
York
January [ l ], 2006
Morgan Joseph
& Co. Inc.
600 Fifth Avenue, 19th Floor
New York, New York 10020
The
undersigned, General Finance Corporation, a Delaware corporation
(“ Company ”), hereby confirms its
agreement with Morgan Joseph & Co. Inc. (“ Morgan
Joseph & Co. ”) and Wedbush Morgan Securities
(“ Wedbush Morgan ”, Morgan Joseph &
Co. and Wedbush Morgan may be collectively referred to as “
you ,” or the “
Representatives ”) and with the other
underwriters named on Schedule I hereto for which Morgan
Joseph & Co. and Wedbush Morgan are acting as Representatives
(the Representatives and the other Underwriters being collectively
called the “ Underwriters ” or,
individually, an “ Underwriter ”) as
follows:
1. Purchase
and Sale of 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 and
commissions) of $5.58 per Firm Unit. The Underwriters, severally
and not jointly, agree to purchase from the Company the number of
Firm Units set forth opposite their respective names on
Schedule I attached hereto and made a part hereof at a
purchase price (net of discounts and commissions) of $5.58 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 of the
Registration Statement (as defined in Section 2.1.1 hereof)
(“ Effective Date ”) unless the
Representatives inform the Company of their decision to allow
earlier separate trading, but in no event will the Representatives
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 Form 8-K 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 of the Registration Statement 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).
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1.1.2
Payment and Delivery . Delivery and payment for the Firm
Units shall be made at 10:00 A.M., New York City local time,
on the third business day following the effective date of the
Registration Statement (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 Representatives and the Company at the offices of the
Representatives or at such other place as shall be agreed upon by
the Representatives 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 Representatives’ election by wire
transfer in Federal (same day) funds or by certified or bank
cashier’s check(s) in New York Clearing House funds, payable
as follows: $ [___] 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 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 Representatives
may request in writing at least two full business days prior to the
Closing Date. The Company will permit the Representatives to
examine and package the Firm Units for delivery, at least one full
business day prior to the Closing Date. The Company shall not be
obligated to sell or deliver the Firm Units except upon tender of
payment by the Representatives for all the Firm Units.
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 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
Representatives 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 Representatives,
which must be confirmed in writing by overnight mail or facsimile
transmission setting forth the number of Option Units to be
purchased and the date and time for delivery of and payment for the
Option Units (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 Representatives, at the offices of the
Representatives or at such other place as shall be agreed upon by
the Company and the Representatives. 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 Representatives’
election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing
House funds, payable as follows: $5.58 per Option Unit shall be
deposited in the Trust Fund pursuant to the Trust Agreement and the
remaining proceeds shall be paid to the order of the Company 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
Representatives request 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 Representatives 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 Morgan
Joseph & Co.’s Purchase Option .
1.3.1
Purchase Option . The Company hereby agrees to issue and
sell to Morgan Joseph & Co. (and/or its designees) on the
Effective Date an option (“ Morgan Joseph Purchase
Option ”) for the purchase of an aggregate of
1,000,000 units (“ Morgan Joseph Units ”)
for an aggregate purchase price of $100. Each of the Morgan Joseph
Units is identical to the Firm Units, except that each of the
warrants underlying the Morgan Joseph Purchase Option entitles the
holder to purchase one share of our Common Stock at a price of
$6.00 (“ Morgan Joseph Warrants ”). The
Morgan Joseph Purchase Option shall be exercisable, in whole or in
part, commencing on the later of the consummation of a Business
Combination or one year from the Effective Date and expiring on the
five-year anniversary of the Effective Date at an
initial
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exercise price
per Morgan Joseph Units of $7.50, which is equal to one hundred
twenty-five percent (125%) of the initial public offering price of
a Unit. The Morgan Joseph Purchase Option, the Morgan Joseph Units,
the Morgan Joseph Warrants and the shares of Common Stock issuable
upon exercise of the Morgan Joseph Warrants are hereinafter
referred to collectively as the “ Morgan Joseph
Securities .” The Public Securities and the Morgan
Joseph Securities are hereinafter referred to collectively as the
“ Securities .” Morgan Joseph understands
and agrees that there are significant restrictions against
transferring the Morgan Joseph Purchase Option or its underlying
securities during the first year after the Effective Date, as set
forth in Section 3 of the Morgan Joseph Purchase Option
including, but not limited to, the agreement of Morgan Joseph that
it will not sell, transfer, assign, pledge or hypothecate the
Morgan Joseph Purchase Option, or its underlying securities, for a
period of one year following the Effective Date to anyone other
than (i) Morgan Joseph or an underwriter or a selected dealer
in connection with the Offering, or (ii) a bona fide officer
or partner of Morgan Joseph or of any such underwriter or selected
dealer, in accordance with the National Association of Securities
Dealers, Inc. (“NASD”) Conduct
Rule 2710(g)(1).
1.3.2
Payment and Delivery . Delivery and payment for the Morgan
Joseph Purchase Option shall be made on the Closing Date. The
Company shall deliver to Morgan Joseph, upon payment therefor,
certificates for the Morgan Joseph Purchase Option in the name or
names and in such authorized denominations as Morgan Joseph 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
Securities and Exchange Commission (“
Commission ”) a registration statement and an
amendment or amendments thereto, on Form S-1 (File
No. 333-129830), including any related preliminary prospectus
(“ Preliminary Prospectus ”), for the
registration of the 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 [___] ) 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, to the best of the Company’s knowledge,
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 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; and
neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, on such dates, 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 Representatives 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
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be described in
the Registration Statement or the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have
not been so described or filed. Each agreement or other instrument
(however characterized or described) to which the Company is a
party or by which its property or business is or may be bound or
affected and (i) that is referred to in the Prospectus, or
(ii) is material to the Company’s business, has been
duly and validly executed by the Company, is in full force and
effect and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance
with its terms, except (x) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws, and
(z) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or
instruments has been assigned by the Company, and neither the
Company nor, to the best of the Company’s knowledge, any
other party is in breach or default thereunder and, to the best of
the Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
breach or default thereunder. To the best of the Company’s
knowledge, performance by the Company of the material provisions of
such agreements or instruments will not result in a violation of
any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to
environmental laws and regulations.
2.3.3
Prior Securities Transactions . No securities of the Company
have been sold by the Company or by or on behalf of, or for the
benefit of, any person or persons controlling, controlled by, or
under common control with the Company within the three years prior
to the date hereof, 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 purpose 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 . LaRue, Corrigan & McCormick LLP (“
LCM ”), whose report is filed with the
Commission as part of the Registration Statement, are independent
accountants as required by the Act and the Regulations. LCM 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; such financial
statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein. 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
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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, based in part on the representations and
warranties of the purchasers of such shares of Common Stock, exempt
from such registration requirements.
2.8.2
Securities Sold Pursuant to this Agreement . The Securities
have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable; the holders thereof
are not and will not be subject to personal liability by reason of
being such holders; the Securities are not and will not be subject
to the preemptive rights of any holders of any security of the
Company or similar contractual rights granted by the Company; and
all corporate action required to be taken for the authorization,
issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all
statements with respect thereto contained in the Registration
Statement. When issued, the Morgan Joseph Purchase Option, the
Representatives’ Warrant, 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 Morgan
Joseph Purchase Option, the Morgan Joseph Warrants, and 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 Credit Agreement (as defined in Section 3.7.2
hereof) and the Escrow Agreement (as defined in Section 2.21.2
hereof) have been duly and validly authorized by the Company and
constitute, and the Morgan Joseph 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 Morgan Joseph Purchase Option,
the Warrant Agreement, the Trust Agreement, the Credit 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 2.23 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
5
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 Morgan
Joseph 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, except where the
failure to qualify would not have a material adverse effect on 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 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 the
Representatives.
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 questionnaires
distributed to such persons, 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 Representatives and their counsel if it
learns that any officer, director or owner of at least 5% of the
Company’s outstanding Common Shares is or becomes an
affiliate or associated person of an NASD member participating in
the offering.
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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 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 Morgan Joseph Warrants with
Continental Stock Transfer & Trust Company substantially in the
form filed as an exhibit to the Registration Statement (“
Warrant Agreement ”).
2.21 Agreements
With Initial Stockholders .
2.21.1
Letters . The Company has caused to be duly executed legally
binding and enforceable agreements (except (i) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification,
contribution or noncompete provision may be limited under the
federal and state securities laws, and (iii) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought) annexed as Exhibits [•] to the Registration
Statement (“ Insider Letter ”), 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 has caused the Initial
Stockholders to enter into an escrow agreement (“
Escrow Agreement ”) with Continental Stock
Transfer & Trust Company (“ Escrow Agent
”), substantially in the form annexed as
Exhibit [•] to the Registration Statement, whereby the
Common Stock owned by the Initial Stockholders will be held in
escrow by the Escrow Agent, until the third anniversary of the
Effective Date. 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 the
Representatives.
2.22 No
Fiduciary Relationship In Pricing . The Company acknowledges
and agrees that (i) the purchase and sale of the Units
pursuant to this Agreement is an arm’s-length commercial
transaction between the Company and the several Underwriters,
(ii) in connection therewith and with the process leading to
such transaction, each Underwriter is acting solely as a principal
and not the agent or fiduciary of the Company, (iii) no
Underwriter has assumed an advisory or fiduciary responsibility in
favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on
other matters) or any other obligation to the Company except the
obligations expressly set forth in this Agreement and (iv) the
Company has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Company agrees that it will not
claim that the Underwriters, or any of them, has rendered advisory
services of any nature or respect, or owes a fiduciary or similar
duty to the Company, in connection with such transaction or the
process leading thereto.
2.23 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 [•] to the
Registration Statement.
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2.24 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.
2.25
Investments . No more than 45% of the “value”
(as defined in Section 2(a)(41) of the Investment Company Act
of 1940 (“ Investment Company Act ”)) of
the Company’s total assets consist of, and no more than 45%
of the Company’s net income after taxes is derived from,
securities other than “Government securities” (as
defined in Section 2(a)(16) of the Investment Company
Act).
2.26
Subsidiaries . The Company does not own an interest in any
corporation, partnership, limited liability company, joint venture,
trust or other business entity.
2.27 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.
3. Covenants
of the Company . The Company covenants and agrees as
follows:
3.1 Amendments
to Registration Statement . The Company will deliver to the
Representatives, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after
the Effective Date and not file any such amendment or supplement to
which the Representatives shall reasonably object in
writing.
3.2 Federal
Securities Laws .
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
Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a Prospectus relating to the
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
Representatives 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
Representatives) with the Commission pursuant to the requirements
of Rule 424 of the Regulations.
3.2.3
Exchange Act Registration . For a period of five years from
the Effective Date, or until such earlier time upon which the
Company is required to be liquidated, the Company will use its best
efforts to maintain the registration of the Units, Common Stock and
Warrants under the provisions of the Exchange Act. For a period of
five years from the Effective Date, the Company will not deregister
the Units, Common Stock and Warrants under the Exchange Act without
the prior written consent of the Representatives (except in
connection with a going private transaction).
3.3 Blue Sky
Filing . Unless the Securities are listed or quoted, as the
case may be, on the New York Stock Exchange, the American Stock
Exchange, or the Nasdaq National Market, the Company will endeavor
in good faith, in cooperation with the Representatives, at or prior
to the time the Registration Statement becomes effective, to
qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Representatives may reasonably
designate, provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be
subject to service of general process or to taxation as a foreign
corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the
Company will, unless the Representatives agree that such action is
not at the time necessary or advisable, use all reasonable efforts
to file and make such statements or reports at such times as are or
may be required by the laws of such jurisdiction.
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 Requiring Notice to the
Representatives . The Company will use its best efforts to
cause the Registration Statement to remain effective and will
notify the Representatives immediately and confirm the notice in
writing
8
(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 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 3.2.3 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
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