2,750,000
Units
AFFINITY MEDIA INTERNATIONAL
CORP.
UNDERWRITING
AGREEMENT
New York, New York
____, 2006
As
Representative of the Underwriters
named on
Schedule A hereto
The undersigned, Affinity Media International
Corp., a Delaware corporation (“ Company
”), hereby confirms its agreement with Maxim Group LLC
(hereinafter referred to as “ you ,”
“ Maxim ” or the “
Representative ”) and with the other
underwriters named on Schedule A hereto for which
Maxim is acting as Representative (the Representative and the other
Underwriters being collectively referred to herein as 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 2,750,000 units (the “ Firm
Units ”) of the Company at a purchase price (net of
discounts and commissions) of $5.76 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 A attached hereto and
made a part hereof at a purchase price (net of discounts and
commissions) of $5.76 per Firm Unit. The Firm Units are to be
offered initially to the public (the “
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 (the
“ Common Stock ”), and two warrants to
purchase shares of Common Stock (the “
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 (the
“ Effective Date ”) of the
Registration Statement (as defined in Section 2.1.1 hereof)
unless Maxim informs the Company of its decision to allow earlier
separate trading based on their assessment of the relative
strengths of the securities markets and small capitalization
companies in general, and the trading pattern of, and demand for,
the Company’s securities in particular. Maxim may decide to
allow continued trading of the Units following such separation. In
no event will Maxim allow separate trading until (i) the
preparation of an audited balance sheet of the Company reflecting
receipt by the Company of the proceeds of the Offering and the
filing of such audited balance sheet with the Commission (as herein
defined) on a Form 8-K or similar form by the Company which
includes such balance sheet; (ii) the Company files a Form 8-K and
issues a press release announcing when such separate trading will
begin; and (iii) the Business Day (defined below) following the
earliest to occur of the expiration of the Over-allotment Option
(defined below) or the exercise of the Over-allotment Option in
full. Each Warrant entitles its holder to purchase one share
of Common Stock for $5.00 per share during the period commencing on
the later of (a) the consummation by the Company of its
“Business Combination” or (b) one year from the
Effective Date of the Registration Statement and terminating on the
four-year anniversary of the Effective Date. As used herein,
the term “ Business Combination ”
shall mean any acquisition by merger, capital stock exchange, asset
or stock acquisition or other similar business combination
consummated by the Company with a single operating entity, or one
or more related or unrelated entities in the publishing industry
located in the United States (as described more fully in the
Registration Statement). The Company has the right to redeem the
Warrants (including the Representative’s Warrants) upon not
less than thirty (30) days written notice at a price of $0.01 per
Warrant at any time after the Warrants become exercisable; so long
as the average closing sales price of the Company’s Common
Stock has been at least $8.50 for any twenty (20) trading days
within a thirty (30) trading day period ending on the third day
prior to the day on which notice is given.
1.1.2 Payment and Delivery . Delivery and payment for the Firm Units
shall be made at 10:00 A.M., New York time, on the third Business
Day following the Effective Date 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 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 is called the “ 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.
$16,500,000 ($6.00 per unit; $18,900,750 if the Over-allotment
Option (as defined in Section 1.2) is exercised in full, which
represents approximately $5.98 per unit) of the proceeds received
by the Company for the Firm Units and from the Private Placement
(as defined in Section 1.4) shall be deposited in the trust fund
established by the Company for the benefit of the public
stockholders as described in the Registration Statement (the
“ Trust Fund ”) pursuant to the terms
of an Investment Management Trust Agreement (the “
Trust Agreement ”) which amount includes up
to (i) $660,000 ($0.24 per Firm Unit; $783,750 if the
Over-allotment Option is exercised in full, which represents $0.30
per Option Unit) payable to the underwriters as contingent
compensation and (ii) $60,000 payable to the Representative as
placement fees for the Private Placement, each upon consummation of
a Business Combination. Any remaining proceeds (less commissions,
expense allowance and actual expense payments or other fees payable
pursuant to this Agreement) 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 (the “
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 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. As used
herein, the term “ Business Day ”
shall mean any day other than a Saturday, Sunday or any day on
which national banks in New York, New York are not open for
business.
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 412,500 units
from the Company (the “ Over-allotment
Option ”). Such additional 412,500 units shall
be identical in all respects to the Firm Units and 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 (net of discounts and
commissions) will be $5.82 per Option Unit. The Option Units are to
be offered initially to the public at the offering price of $6.00
per Option Unit.
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
from 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, which will not be later than
five 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. If such delivery and payment for the Option
Units does not occur on the Closing Date, the date and time of the
closing for such Option Units will be as set forth in the notice
(hereinafter the “ Option Closing Date
”). 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, by deposit of the sum of $5.82 per Option Unit in the
Trust Fund pursuant to the Trust Agreement upon delivery to you of
certificates (in form and substance satisfactory to the
Underwriters) representing the Option Units (or through the
facilities of DTC) for the account of the Underwriters.
The certificates representing the Option Units to be
delivered will be in such denominations and registered in such
names as the Representative requests not less than two 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 or Option Closing
Date.
1.3 Representative’s Purchase
Option .
1.3.1 Purchase Option . The Company hereby agrees to issue and
sell to the Representative (and/or their designees) on the
Effective Date an option (“ Representative’s
Purchase Option ”) for the purchase of an aggregate
of 192,500 units (the “ Representative’s
Units ”) for an aggregate purchase price of
$100.00. Each of the Representative’s Units is
identical to the Firm Units and the Warrants included in the
Representative’s Units have an exercise price of $5.00.
The Representative’s 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 exercise price per Representative’s Unit of $6.60,
which is equal to one hundred and ten percent (110%) of the initial
public offering price of a Unit. The Representative’s
Purchase Option, the Representative’s Units, the shares of
Common Stock and the Warrants included in the
Representative’s Units (the “
Representative’s Warrants ”) and the
shares of Common Stock issuable upon exercise of the
Representative’s Warrants are hereinafter referred to
collectively as the “ Representative’s
Securities .” The Public Securities and the
Representative’s Securities are hereinafter referred to
collectively as the “ Securities .”
The Representative understands and agrees that there are
significant restrictions against transferring the
Representative’s Purchase Option during the first year after
the Effective Date, as set forth in Section 3 of the
Representative’s Purchase Option.
1.3.2 Delivery and Payment . Delivery and payment for the
Representative’s Purchase Option shall be made on the Closing
Date. The Company shall deliver to the Underwriters, upon
payment therefor, certificates for the Representative’s
Purchase Option in the name or names and in such authorized
denominations as the Representative may request.
1.4 Private Placement to Officers and Directors and
Designees . Certain
officers and directors of the Company and their designees purchased
from the Company pursuant to the Placement Unit Purchase Agreement
(as defined in Section 2.23.2 hereof) an aggregate of 250,000 units
identical to the Units (the “ Placement
Units ”) at a purchase price of $6.00 per Placement
Unit in a private placement that occurred immediately prior to the
entering into of this agreement (the “ Private
Placement ”). The Placement Units, the shares of
Common Stock and the Warrants included in the Placement Units (the
“ Placement Warrants ”) and the shares
of Common Stock issuable upon exercise of the Placement Warrants
are hereinafter referred to collectively as the “
Placement Securities .” Maxim acted as
placement agent in the Private Placement and shall be entitled to a
placement fee equal to four percent (4%) and a non-accountable
expense allowance equal to one percent (1%) of the gross proceeds
received by the Company from the sale of the Placement Securities.
In addition, Maxim shall be entitled to receive a contingent
placement fee of four percent (4%) of the gross proceeds received
by the Company from the sale of the Placement Securities upon
consummation of a Business Combination.
1.5 Free Writing Prospectus . Each Underwriter agrees that, unless it
obtains the prior written consent of the Company, it will not make
any offer relating to the Public Securities that would constitute
an Issuer-Represented Free Writing Prospectus (as defined in
Section 2.31 hereof) or that would otherwise (without taking into
account any approval, authorization, use or reference thereto by
the Company) constitute a “free writing prospectus”
required to be filed by the Company with the Commission (as defined
herein) or retained by the Company under Rule 433 of the Act (as
defined herein); provided that the prior written consent of the
Company hereto shall be deemed to have been given in respect of any
Issuer-Represented General Free Writing Prospectuses (as defined in
Section 2.31 hereof) referenced on Exhibit D attached
hereto.
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 (the “
Commission ”) a registration statement and
an amendment or amendments thereto, on Form S-1 (File No.
333-128707), including any related preliminary prospectus (the
“ Preliminary Prospectus ”), for the
registration of the Securities under the Securities Act of 1933, as
amended (the “ 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 (the “
Regulations ”) of the Commission under the
Act. The conditions for use of Form S-1 to register the
Offering under the Act, as set forth in the General Instructions to
such Form, have been satisfied. 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 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 containing
information permitted to be omitted at the time of effectiveness by
Rule 430A of the Regulations filed with the Commission pursuant to
Rule 424 of the Regulations), is hereinafter called the “
Prospectus .” If the Company has filed, or
is required pursuant to the terms hereof to file, a registration
statement pursuant to Rule 462(b) under the Securities Act
registering additional shares of Common Stock (a “
Rule 462(b) Registration Statement ”), then,
unless otherwise specified, any reference herein to the term
“ Registration Statement ” shall be
deemed to include such Rule 462(b) Registration Statement. Other
than a Rule 462(b) Registration Statement, which, if filed, becomes
effective upon filing, no other document with respect to the
Registration Statement has heretofore been filed with the
Commission. All of the Public Securities have been registered under
the Securities Act pursuant to the Registration Statement or, if
any Rule 462(b) Registration Statement is filed, will be duly
registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. The Registration Statement has been
declared effective by the Commission on the date hereof.
2.1.2
Pursuant to the Exchange Act
. The Company has filed with the
Commission a Form 8-A (File
Number 000- )
providing for the registration under the Securities Exchange Act of
1934, as amended (the “ 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, upon the
filing or first use (within the meaning of the Regulations) of the
Prospectus and at the Closing Date and the Option Closing Date, if
any, the Registration Statement and the Prospectus contained or
will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and did or
will in all material respects conform to the requirements of the
Act and the Regulations; neither the Registration Statement nor any
Preliminary Prospectus or the Prospectus, nor any amendment or
supplement thereto, on such dates, did 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 the case of the Preliminary Prospectus and the
Prospectus, 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) or first used (within the meaning of the Regulations)
and when any amendment thereof or supplement thereto was first
filed with the Commission or first used (within the meaning of the
Regulations), such Preliminary Prospectus and any amendments
thereof and supplements thereto complied or will have been
corrected in the Prospectus to 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. It is understood that the
statements set forth in paragraphs __________ in the Prospectus
under the heading “Underwriting - Underwriting Terms”
constitute for the purposes of this Agreement, information
furnished by the Representative with respect to the
Underwriters.
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 attached
as an exhibit thereto, or (ii) is material to the Company’s
business, has been duly and validly executed by the Company, is in
full force and effect in all material respects 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 Company’s knowledge, any
other party is in breach or default thereunder and, to 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 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
as currently contemplated are correct in all material respects and
do not omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading.
2.4
Changes After Dates in Registration
Statement .
2.4.1
No Material Adverse Change
. Except as contemplated in the General
Disclosure Package and the Prospectus, since the respective dates
as of which information is given in the General Disclosure Package:
(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;
(iii) no member of the Company’s board of directors or
management has resigned from any position with the Company and (iv)
no event or occurrence has taken place which materially impairs, or
would likely materially impair, with the passage of time, the
ability of the members of the Company’s board of directors or
management to act in their capacities with the Company as described
in the Registration Statement, the Prospectus and/or the General
Disclosure Package.
2.4.2
Recent Securities Transactions,
Etc.
Except as contemplated in the General Disclosure Package and the
Prospectus, subsequent to the respective dates as of which
information is given in the General Disclosure Package, 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 capital
stock.
2.5
Independent Accountants
. Marcum & Kliegman, LLP (“
Marcum ”), whose report is filed with the
Commission as part of the Registration Statement and included in
the Registration Statement, the General Disclosure Package and the
Prospectus, are independent accountants as required by the Act and
the Regulations and the Public Company Accounting Oversight Board
(including the rules and regulations promulgated by such entity,
the “ PCAOB ”). Marcum is duly
registered and in good standing with the PCAOB. Marcum has not,
during the periods covered by the financial statements included in
the Registration Statement, the General Disclosure Package and 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; Statistical
Data .
2.6.1
Financial Statements
. The financial statements, including the notes
thereto and supporting schedules included in the Registration
Statement, the General Disclosure Package and the Prospectus fairly
present the financial position and the results of operations of the
Company at the dates and for the periods to which they apply; and
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. No other financial
statements or supporting schedules are required to be included or
incorporated by reference in the Registration Statement, the
General Disclosure Package or the Prospectus. The Registration
Statement, the General Disclosure Package and the Prospectus
disclose 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. There are no pro forma or as adjusted financial
statements which are required to be included in the Registration
Statement, the General Disclosure Package or the Prospectus in
accordance with Regulation S-X which have not been included as so
required.
2.6.2
Statistical Data . The
statistical, industry-related and market-related data included in
the Registration Statement, the General Disclosure Package and/or
the Prospectus are based on or derived from sources which the
Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are
derived.
2.7
Authorized Capital; Options, Etc.
The Company had at the date or dates indicated in the
Registration Statement, the General Disclosure Package and/or the
Prospectus, as the case may be, duly authorized, issued and
outstanding capitalization as set forth in the Registration
Statement, the General Disclosure Package and/or the
Prospectus. Based on the assumptions stated in the
Registration Statement, the General Disclosure Package and/or 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, the General
Disclosure Package and/or the Prospectus, on the Effective Date,
upon the filing or first use (within the meaning of the
Regulations) of the Prospectus, on the issue date of the General
Disclosure Package and on the Closing Date and the Option Closing
Date, if any, there will be no options, warrants, or other rights
to purchase or otherwise acquire any authorized, but unissued
shares of Common Stock of the Company or any security convertible
into shares of Common Stock of the Company, or any contracts or
commitments to issue or sell shares of Common Stock or any such
options, warrants, rights or convertible
securities.
2.8
Valid Issuance of Securities,
Etc.
2.8.1
Outstanding Securities
. All issued and outstanding securities of
the Company (including, without limitation, the Placement
Securities) 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 Public Securities conform
to all statements relating thereto contained in the Registration
Statement, the General Disclosure Package and/or the Prospectus.
Except with respect to the Placement Securities, 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 reserved for issuance 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, the
General Disclosure Package and/or the Prospectus, as the case may
be. 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. The shares of Common Stock issuable upon exercise of the
Warrants and included in the Representative’s Purchase Option
(and the shares of Common Stock issuable upon exercise of the
Representative’s Warrants) have been reserved for issuance
upon the exercise of the Warrants, the Representative’s
Purchase Option and the Representative’s Warrants and when
issued in accordance with the terms of such securities, will be
duly and validly authorized, 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.
2.8.3
Placement Warrants
. The Placement Warrants 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 Placement 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
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. The shares of Common Stock issuable upon exercise of the
Placement Warrants have been reserved for issuance upon the
exercise of the Placement Warrants and, when issued in accordance
with the terms of the Placement Warrants, will be duly and validly
authorized, validly issued, fully paid and non-assessable, and the
holders thereof are not and will not be subject to personal
liability by reason of being such holders.
2.8.4
No Integration . Except
with respect to the Placement Securities, neither the Company nor
any of its affiliates has, prior to the date hereof, made any offer
or sale of any securities which are required to be
“integrated” pursuant to the Act or the Regulations
with the offer and sale of the Public Securities pursuant to the
Registration Statement.
2.9
Registration Rights of Third
Parties .
Except as set forth in the Registration Statement, the General
Disclosure Package and/or 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 2.22
hereof), the Trust Agreement, the Services Agreement (as defined in
Section 3.7.2 hereof), the Placement Unit Purchase Agreement
(as defined in Section 2.23.2 hereof) and the Escrow Agreement (as
defined in Section 2.23.3 hereof) have been duly and validly
authorized by the Company and constitute 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 Service Agreement, the
Placement Unit Purchase 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 2.24
hereof; (ii) result in any violation of the provisions of the
Amended and Restated Certificate of Incorporation or the By-Laws 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 Amended and Restated 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 for the purposes
described in the Registration Statement, the General Disclosure
Package and/or the Prospectus. The disclosures in the
Registration Statement, the General Disclosure Package and/or the
Prospectus 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. Since its formation, the Company has conducted no
business and has incurred no liabilities other than in connection
with and in furtherance of the Offering.
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, the Services Agreement, the Placement Unit
Purchase 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
. All information contained in the
questionnaires (the “ Questionnaires
”) completed by each of the Company’s stockholders
immediately prior to the Offering (the “ Initial
Stockholders ”) and provided to the Underwriters as
an exhibit to his or her Insider Letter (as defined in
Section 2.23.1) 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, the Questionnaires, the General
Disclosure Package and/or the Prospectus.
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
No Contemplation of a Business
Combination . Prior to
the date hereof, neither the Company, its officers and directors
nor the Initial Stockholders had, and as of the Closing, the
Company and such officers and directors and Initial Stockholders
will not have had: (a) any specific Business Combination under
consideration or contemplation or (b) any substantive interactions
or discussions with any target business regarding a possible
Business Combination.
2.18
Transactions Affecting Disclosure to
NASD .
2.18.1
Except as described in the General Disclosure
Package and/or 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 Company’s knowledge,
any Initial Stockholder that may affect the Underwriters’
compensation, as determined by the National Association of
Securities Dealers, Inc. (the “ NASD
”).
2.18.2
The Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) 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) except with respect to Fred
Tarter, 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
Maxim.
2.18.3
Except with respect to Fred Tarter, no officer,
director, or beneficial owner of any class of the Company’s
securities (whether debt or equity, registered or unregistered,
regardless of the time acquired or the source from which derived)
(any such individual or entity, a “ Company
Affiliate ”) is a member, a person associated, or
affiliated with a member of the NASD.
2.18.4
Except with respect to Fred Tarter, no Company
Affiliate is an owner of stock or other securities of any member of
the NASD (other than securities purchased on the open
market).
2.18.5
No Company Affiliate has made a subordinated
loan to any member of the NASD.
2.18.6
No proceeds from the sale of the Public
Securities (excluding underwriting compensation) or the Placement
Securities will be paid to any NASD member, or any persons
associated or affiliated with a member of the NASD, except as
specifically authorized herein and in the Placement Unit Purchase
Agreement.
2.18.7
Except with respect to Maxim, the Company has
not issued any warrants or other securities, or granted any
options, directly or indirectly to anyone who is a potential
underwriter in the Offering or a related person (as defined by NASD
rules) of such an underwriter within the 180-day period prior to
the initial filing date of the Registration
Statement.
2.18.8
Except with respect to Fred Tarter, no person to
whom securities of the Company have been privately issued within
the 180-day period prior to the initial filing date of the
Registration Statement has any relationship or affiliation or
association with any member of the NASD.
2.18.9
No NASD member intending to participate in the
Offering has a conflict of interest with the Company. For this
purpose, a “conflict of interest” exists when a member
of the NASD and/or its associated persons, parent or affiliates in
the aggregate beneficially own 10% or more of the Company’s
outstanding subordinated debt or common equity, or 10% or more of
the Company’s preferred equity. “Members participating
in the Offering” include managing agents, syndicate group
members and all dealers which are members of the
NASD.
2.18.10
Except with respect to Maxim in connection with the Offering and
the Private Placement, the Company has not entered into any
agreement or arrangement (including, without limitation, any
consulting agreement or any other type of agreement) during the
180-day period prior to the initial filing date of the Registration
Statement, which arrangement or agreement provides for the receipt
of any item of value and/or the transfer of any warrants, options,
or other securities from the Company to an NASD member, any person
associated with a member (as defined by NASD rules), any potential
underwriters in the Offering and/or any related
persons.
2.19
Foreign Corrupt Practices Act
. Neither the Company nor any of the
Initial Stockholders or any other person acting on behalf of the
Company has, directly or indirectly, given or agreed to give any
money, gift or similar benefit (other than legal price concessions
to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any
government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or other person who
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 Registration Statement, the General Disclosure
Package and 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
Patriot Act . Neither
the Company nor any officer, director or Initial Stockholder has
violated: (i) the Bank Secrecy Act, as amended, (ii) the Money
Laundering Control Act of 1986, as amended, or (iii) the Uniting
and Strengthening of America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act
of 2001, and/or the rules and regulations promulgated under any
such law, or any successor law.
2.21
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.
2.22
Warrant Agreement . The
Company has entered into a warrant agreement with respect to the
Warrants, the Representative’s Warrants and the Placement
Warrants with American Stock Transfer & Trust Company
substantially in the form filed as an exhibit to the Registration
Statement (the “ Warrant Agreement ”),
providing for, among other things, the payment of a warrant
solicitation fee as contemplated by Section 3.9
hereof.
2.23
Agreements With Initial
Stockholders .
2.23.1
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 10.1.1 through 10.1.6, to
the Registration Statement (the “ 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.
2.23.2
Placement Unit Purchase
Agreement . Certain of
the Company’s officers and directors and their affiliates
have executed and delivered an agreement, annexed as an exhibit to
the Registration Statement (the “ Placement Unit
Purchase Agreement ”), pursuant to which such
persons, among other things, have purchased an aggregate of 250,000
Placement Units in the Private Placement. Pursuant to the Placement
Unit Purchase Agreement, (i) $1,425,000 of the proceeds from the
sale of the Placement Units will be deposited by the Company in the
Trust Fund in accordance with the terms of the Trust Agreement
prior to the Closing, and (ii) the purchasers of the Placement
Units have waived any and all rights and claims that they may have
to any proceeds, and any interest thereon, held in the Trust in
respect of the shares of Common Stock included in such Placement
Units in the event that a Business Combination is not consummated
and the Trust Fund is liquidated in accordance with the terms of
the Trust Agreement.
2.23.3
Escrow Agreement . The
Company has caused the Initial Stockholders to enter into an escrow
agreement (the “ Escrow Agreement ”)
with American Stock Transfer & Trust Company (the “
Escrow Agent ”) substantially in the form
filed as an exhibit to the Registration Statement whereby the
Common Stock owned by the Initial Stockholders (not including any
shares of Common Stock included in the Placement Units which any of
them may have purchased) 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 (a) to spouses and children of Initial Stockholders
and trusts established for their benefit, (b) after a Business
Combination in a transaction whereby all the outstanding shares of
the Company are exchanged or converted into cash or another
entity’s securities and (c) as otherwise set forth in
the Escrow Agreement) unless approved by the Company’s public
stockholders, but will retain the right to vote such shares.
The Escrow Agreement shall not be amended, modified or otherwise
changed without the prior written consent of Maxim, such consent
not to be unreasonably withheld.
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 filed as
an exhibit to the Registration Statement.
2.25
Covenants Not to Compete
. No Initial Stockholder 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
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).
2.27
Subsidiaries . The
Company does not own an interest in any corporation, partnership,
limited liability company, joint venture, trust or other business
entity.
2.28
Related Party Transactions
. No relationship, direct or indirect,
exists between or among any of the Company or any affiliate of the
Company, on the one hand, and any director, officer, shareholder,
customer or supplier of the Company or any affiliate of the
Company, on the other hand, which is required by the Act, the
Exchange Act or the Regulations to be described in the Registration
Statement, the General Disclosure Package or the Prospectus which
is not so described and described as required. There are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of their respective
family members, except as disclosed in the Registration Statement,
the General Disclosure Package and/or the Prospectus. The Company
has not extended or maintained credit, arranged for the extension
of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or officer of the
Company.
2.29
No Influence . The
Company has not offered, or caused the Underwriters to offer, the
Firm Units to any person or entity with the intention of unlawfully
influencing: (a) a customer or supplier of the Company or any
affiliate of the Company to alter the customer’s or
supplier’s level or type of business with the Company or such
affiliate or (b) a journalist or publication to write or publish
favorable information about the Company or any such
affiliate.
2.30
No Ineligible Issuer
. (i) At the time of filing the Registration
Statement and (ii) at the date hereof, the Company was not and is
not an “ineligible issuer,” as defined in Rule 405
under the Act, nor an “excluded issuer” as defined in
Rule 164 under the Act.
2.31
Free Writing Prospectus
.
2.31.1
Neither: (i) any Issuer-Represented General Free
Writing Prospectus(es) issued at or prior to the Time of Sale and
the Statutory Prospectus, all considered together (collectively,
the “ General Disclosure Package ”),
nor (ii) any individual Issuer-Represented Limited-Use Free Writing
Prospectus(es) (as defined below), when considered together with
the General Disclosure Package, includes or included as of the Time
of Sale any untrue statement of a material fact or omits or omitted
as of the Time of Sale to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from any Statutory Prospectus included in the Registration
Statement or any Issuer-Represented Free Writing Prospectus based
upon and in conformity with written information furnished to the
Company by the Representative specifically for use
therein.
2.31.2
Each Issuer-Represented Free Writing Prospectus,
as of its issue date and at all subsequent times through the
completion of the public offer and sale of the Public Securities or
until any earlier date that the Company notified or notifies the
Representative as described in the next sentence, did not, does not
and will not include any information that conflicted, conflicts or
will conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus. If at any
time following issuance of an Issuer-Represented Free Writing
Prospectus there occurred or occurs an event or development as a
result of which such Issuer-Represented Free Writing Prospectus
conflicted or would conflict with the information contained in the
Registration Statement, any Statutory Prospectus or the Prospectus
relating to the Public Securities or included or would include an
untrue statement of a material fact or omitted or would omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company has notified or will
notify promptly the Representative so that any use of such
Issuer-Represented Free Writing Prospectus may cease until it is
promptly amended or supplemented by the Company, at its own
expense, to eliminate or correct such conflict, untrue statement or
omission. The foregoing two sentences do not apply to statements in
or omissions from any Issuer-Represented Free Writing Prospectus
based upon and in conformity with written information furnished to
the Company by the Representative specifically for use
therein.
2.31.3
The Company has not distributed and will not
distribute any prospectus or other offering material in connection
with the offering and sale of the Public Securities other than any
Preliminary Prospectus, the General Disclosure Package or the
Prospectus or other materials permitted by the Act to be
distributed by the Company. Unless the Company obtains the prior
consent of the Representative, an except as set forth on Exhibit
D attached hereto, 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 under the Act, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405 under the Act,
required to be filed with the Commission. The Company has complied
and will comply with the requirements of Rules 164 and 433 under
the Act applicable to any Issuer-Represented Free Writing
Prospectus as of its issue date and at all subsequent times through
the completion of the public offer and sale of the Public
Securities, including timely filing with the Commission where
required, legending and record keeping. The Company has satisfied
and will satisfy the conditions in Rule 433 under the Act to avoid
a requirement to file with the Commission any electronic road
show.
2.31.4
As used in this Agreement, the terms set forth
below shall have the following meanings:
(i)
“ Time of Sale ”
means [____:00 [a.m.][p.m.]] (Eastern time) on the date of this
Agreement.
(ii)
“ Statutory Prospectus
” as of any time means the prospectus that is included in the
Registration Statement immediately prior to that time. For purposes
of this definition, information contained in a form of prospectus
that is deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430A shall be considered to be included
in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b)
under the Act.
(iii)
“ Issuer-Represented Free Writing
Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Act, relating
to the Public Securities that (A) is required to be filed with the
Commission by the Company, or (B) is exempt from filing pursuant to
Rule 433(d)(5)(i) under the Act because it contains a description
of the Public Securities or of the offering that does not reflect
the final terms or pursuant to Rule 433(d)(8)(ii) because it is a
“bona fide electronic road show,” as defined in Rule
433 of the Regulations which is made available without restriction,
in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in
the Company’s records pursuant to Rule 433(g) under the
Act.
(iv)
“ Issuer-Represented General Free
Writing Prospectus ” means any Issuer-Represented
Free Writing Prospectus that is intended for general distribution
to prospective investors, as evidenced by its being specified on
Exhibit D attached hereto.
(v)
“ Issuer-Represented Limited-Use
Free Writing Prospectus ” means any
Issuer-Represented Free Writing Prospectus that is not an
Issuer-Represented General Free Writing Prospectus. The term
Issuer-Represented Limited-Use Free Writing Prospectus also
includes any “bona fide electronic road show,” as
defined in Rule 433 of the Regulations, that is made available
without restriction pursuant to Rule 433(d)(8)(ii), even though not
required to be filed with the Commission.
2.32
Definition of
“Knowledge” . As used in
herein, the term “ knowledge of the Company
” (or similar language) shall mean the knowledge of the
officers and directors of the Company who are named in the
Prospectus, with the assumption that such officers and directors
shall have made reasonable and diligent inquiry of the matters
presented.
3.
Covenants of the Company
. The Company covenants and agrees as
follows:
3.1
Amendments to Registration
Statement . The
Company will deliver (whether physically or through compliance with
Rule 172 under the Act or any similar rule) 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 (or in lieu thereof the notice
referred to in Rule 173(a)) is required to be delivered under the
Act (whether physically or through compliance with Rule 172 under
the Act or any similar rule), 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, the
General Disclosure Package and the Prospectus. If at any time
when a prospectus (or in lieu thereof the notice referred to in
Rule 173(a)) relating to the Public Securities is required to be
delivered under the Act (whether physically or through compliance
with Rule 172 under the Act or any similar rule), 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 (or if the Prospectus is not yet
available to prospective purchasers, the General Disclosure
Package), 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 during such period to amend the Registration Statement
or amend or supplement the Prospectus (or if the Prospectus is not
yet available to prospective purchasers, the General Disclosure
Package) 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 to the
Registration Statement or amendment or supplement to the Prospectus
(or, if the Prospectus is not yet available to prospective
purchasers, the General Disclosure Package) (at the expense of the
Company) so as to correct such statement or omission or effect such
compliance.
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
. 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. The
Company will not deregister the Units under the Exchange Act
without the prior written consent of Maxim.
3.2.4
Sarbanes-Oxley Compliance
. As soon as it is legally required to do so,
the Company shall take all actions necessary to obtain and
thereafter maintain material compliance with each applicable
provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated thereunder and related or similar rules and
regulations promulgated by any other governmental or self
regulatory entity or agency with jurisdiction over the
Company.
3.3
Blue Sky Filing . 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
wh
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