Exhibit 1.1
HEALTHCARE ACQUISITION PARTNERS
CORP.
(a Delaware Corporation)
16,666,667 Units
UNDERWRITING
AGREEMENT
HEALTHCARE ACQUISITION PARTNERS CORP.
(a Delaware Corporation)
16,666,667 Units
UNDERWRITING AGREEMENT
,
2006
FTN MIDWEST SECURITIES
CORP.
as
Representative of the several Underwriters
350 Madison Avenue, 20
th
Floor
New York, New York 10017
Ladies and Gentlemen:
Healthcare Acquisition Partners
Corp., a Delaware corporation (the “Company”), confirms
its agreement with FTN Midwest Securities Corp. (“FTN”)
and each of the other Underwriters named in Schedule A hereto
(collectively, the “Underwriters”), for whom FTN is
acting as representative (in such capacity, the
“Representative”), with respect to the issue and sale
by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of units of
the Company (the “Units”, and the Units to be purchased
by the Underwriters pursuant hereto are referred to as the
“Initial Units”) set forth opposite each
Underwriter’s name in said Schedule A, and with respect
to the grant by the Company to the Underwriters, acting severally
and not jointly, of the overallotment option described in
Section 2(b) hereof to purchase all or any part of 2,500,000
additional Units (the “Option Units”) to cover
overallotments, if any. Each Unit consists of one share of the
Company’s common stock, par value $.0001 per share (the
“Common Stock”), and two warrants (each, a
“Warrant”). Each Warrant entitles its holder to
exercise it to purchase one share of Common Stock for an exercise
price of $5.00 during the period commencing on the later of the
consummation by the Company of its “Business
Combination” (as defined below) or one year from the
effective date (the “Effective Date”) of the
Registration Statement (as defined below) and terminating on the
fifth anniversary of the Effective Date. “Business
Combination” means any merger, capital stock exchange, asset
acquisition or other similar business combination consummated by
the Company with an operating business, as described in the
Registration Statement. 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 collectively
referred to as the “Public Securities”. The Public
Securities and the Representative’s Securities (as defined in
Section 2(c) hereof) are hereinafter collectively referred to
as the “Securities”.
The Company has entered into a
warrant agreement with respect to the Warrants and the
Representative’s Warrants (as defined in Section 2(c))
with Mellon Investors Services LLC on
,
2006 (the “Warrant Agreement”). The Company has entered
into a service agreement (the “Service Agreement”) with
FTN (in such capacity, the “Servicer”), pursuant to
which the Servicer will make available to the Company general and
administrative services including office space, utilities and
secretarial support for the Company’s use for $1 per year.
The Company has entered into a Trust Account Agreement (the
“Trust Agreement”) with JPMorgan Chase Bank, N.A., on ,
2006, pursuant to which $95,000,000 (including deferred
underwriting discount and commission of $5,400,000) of the proceeds
received by the Company for the Initial Units, or $109,560,000
(including deferred underwriting
discount and commission of $6,210,000, if the
Underwriters’ overallotment option is exercised in full
pursuant to Section 2(b) in this Agreement) will be deposited
in a trust fund (the “Trust Fund”) for the benefit of
holders of any of the Units, shares of Common Stock or Warrants
offered to the public pursuant to this Agreement.
The Company understands that the
Underwriters propose to make a public offering of the Public
Securities as soon as the Representative deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (No. 333-129035), including
the related preliminary prospectus or prospectuses, covering the
registration of the Securities under the Securities Act of 1933, as
amended (the “1933 Act”). Promptly after execution and
delivery of this Agreement, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430A
(“Rule 430A”) of the rules and regulations of the
Commission under the 1933 Act (the “1933 Act
Regulations”) and paragraph (b) of Rule 424 (“Rule
424(b)”) of the 1933 Act Regulations. The information
included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective
pursuant to paragraph (b) of Rule 430A is referred to as
“Rule 430A Information.” Each prospectus used before
such registration statement became effective, and any prospectus
that omitted the Rule 430A Information, that was used after such
effectiveness and prior to the execution and delivery of this
Agreement, is herein called a “preliminary prospectus.”
Such registration statement, including the amendments thereto, the
exhibits and any schedules thereto, at the time it became
effective, and including the Rule 430A Information, is herein
called the “Registration Statement.” Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the “Rule 462(b) Registration
Statement,” and after such filing the term
“Registration Statement” shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first
furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the
“Prospectus.” For purposes of this Agreement, all
references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”).
SECTION 1. Representations and
Warranties .
(a) Representations and
Warranties by the Company. The Company represents and warrants
to each Underwriter as of the date hereof, the Applicable Time
referred to in Section 1(a)(i) hereof, as of the Closing Time
referred to in Section 2(d) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:
(i) Compliance with Registration
Requirements . Each of the Registration Statement and any Rule
462(b) Registration Statement and any post-effective amendment
thereto has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement or any post-effective amendment
thereto has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendments thereto became effective and at the
Closing Time (and, if any Option Units are purchased, at the Date
of Delivery), the Registration Statement, the
2
Rule 462(b) Registration Statement
and any amendments and supplements thereto complied and will comply
in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments
or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if
any Option Units are purchased, at the Date of Delivery), included
or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
As of the Applicable Time (as
defined below), any Issuer Free Writing Prospectus(es) (as defined
below) and the Statutory Prospectus (as defined below) as of the
Applicable Time (collectively, the “General Disclosure
Package”), did not include any untrue statement of a material
fact or omitted 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.
Each Issuer Free Writing Prospectus,
if any, as of its issue date and at all subsequent times through
the completion of the public offer and sale of the Securities or
until any earlier date that the issuer notified or notifies FTN as
described in Section 3(e), did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the
Statutory Prospectus at the Applicable Time or the
Prospectus.
As used in this subsection and
elsewhere in this Agreement:
“Applicable Time” means
00:00 [a/p]m (Eastern time) on
, 2006 or such other time as agreed by the Company and
FTN.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), relating to the Securities
that (i) is required to be filed with the Commission by the
Company, (ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i)
whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the
offering that does not reflect the final terms, 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 required to be retained in the
Company’s records pursuant to Rule 433(g).
“Statutory Prospectus”
as of any time means the prospectus relating to the Securities that
is included in the Registration Statement immediately prior to that
time, including any document incorporated by reference
therein.
The representations and warranties
in this subsection shall not apply to statements in or omissions
from the Registration Statement, the Statutory Prospectus at the
Applicable Time or the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through FTN
expressly for use therein.
Each preliminary prospectus and the
prospectus filed as part of the Registration Statement as
originally filed with the Commission or as part of any amendment
thereto complied when so filed in all material respects with the
1933 Act Regulations and each preliminary
3
prospectus and the Prospectus
delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to its EDGAR system,
except to the extent permitted by Regulation S-T.
(ii) Prior Securities
Transaction . 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.
(iii) Independent Accountants
. The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) Financial Statements .
The financial statements included in the Registration Statement,
the General Disclosure Package and the Prospectus, together with
the related schedules and notes, present fairly the financial
position of the Company at the dates indicated and the statement of
operations, stockholders’ equity and cash flows of the
Company for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles (“GAAP”) applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
present fairly in accordance with GAAP the information required to
be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement. The pro forma financial statements
and the related notes thereto included in the Registration
Statement, the General Disclosure Package and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in
Business . Since the respective dates as of which information
is given in the Registration Statement, the General Disclosure
Package and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not
arising in the ordinary course of business (a “Material
Adverse Effect”), (B) there have been no transactions
entered into by the Company, other than those in the ordinary
course of business, which are material with respect to the Company,
and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the
Company . The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Trust Agreement and the
Services Agreement; and the Company [is duly qualified as a foreign
corporation to transact business and] is in good standing in each
other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
4
(vii) Subsidiaries . The
Company has no subsidiaries.
(viii) Capitalization . The
authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus in the column entitled
“Actual” under the caption “Capitalization”
(except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of
the Warrants or the Representative’s Option referred to in
the Prospectus). The shares of issued and outstanding capital stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company.
(ix) Authorization of
Agreement . This Agreement has been duly authorized, executed
and delivered by the Company.
(x) Validity of Agreements .
The Warrant Agreement, the Trust Agreement, the
Representative’s Purchase Option and the Services Agreement
have been duly and validly authorized by the Company and, assuming
due authorization, execution and delivery of the other parties
thereto, constitute the valid and binding agreements of the
Company, enforceable 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.
(xi) Authorization and
Description of Securities . The Securities have been duly
authorized for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; the Units, the
Warrants and the Common Stock conform to all statements relating
thereto contained in the Prospectus and such description conforms
to the rights set forth in the instruments defining the same; no
holder of the Units, Common Stock or Warrants will be subject to
personal liability by reason of being such a holder; and the
issuance of the Units, Common Stock or Warrants is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
(xii) Absence of Defaults and
Conflicts . The Company is not in violation of its certificate
of incorporation (the “Charter”), as filed with the
Secretary of State of the State of Delaware on , 2005 or its
bylaws, as amended (the “Bylaws”) or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company is subject (collectively, “Agreements and
Instruments”); and the execution, delivery and performance of
this Agreement, the Warrant Agreement, the Representative’s
Purchase Option, the Trust Agreement and the Services Agreement and
the consummation of the transactions contemplated herein, therein,
in the Registration Statement and in the Prospectus (including the
issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus
under the caption “Use of Proceeds”) and compliance by
the Company with its obligations hereunder and thereunder, in the
Registration Statement and in the Prospectus have been duly
authorized by all necessary corporate action and do not and will
not, whether with or without the giving of
5
notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the Agreements and Instruments,
nor will such action result in any violation of the provisions of
the Charter or Bylaws of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its assets,
properties or operations. As used herein, a “Repayment
Event” means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any
person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company.
(xiii) Absence of Proceedings
. There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company, which is
required to be disclosed in the Registration Statement and the
Prospectus (other than as disclosed therein), or which might result
in a Material Adverse Effect, or which might materially and
adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or
the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which
the Company is a party or of which any of their respective property
or assets is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not result in
a Material Adverse Effect.
(xiv) Accuracy of Exhibits .
There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits thereto which have not been so described and
filed as required.
(xv) Absence of Further
Requirements . No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations
under this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Trust Agreement and the
Services Agreement, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated hereby and thereby, except such as have
been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws.
(xvi) Absence of Manipulation
. Neither the Company nor any affiliate of the Company has taken,
nor will the Company or any affiliate take, directly or indirectly,
any action which is designed to or which has constituted or which
would be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(xvii) Possession of Licenses and
Permits . The Company possesses such permits, licenses,
approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except
where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Company is in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect
6
would not, singly or in the
aggregate, result in a Material Adverse Effect; and the Company has
not received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Effect.
(xviii) Title to Property .
The Company has good and marketable title to all real property
owned by the Company and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of
any kind except such as (a) are described in the Prospectus or
(b) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company; and all of the
leases and subleases material to the business of the Company, and
under which the Company holds properties described in the
Prospectus, are in full force and effect, and the Company has not
any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company under any of the
leases or subleases mentioned above, or affecting or questioning
the rights of the Company to the continued possession of the leased
or subleased premises under any such lease or sublease.
(xix) Registration Rights .
Except as set forth in the Registration Statement and the
Prospectus, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xx) Regulation . The
disclosures in the Registration Statement and the Prospectus
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.
(xxi) Investment Company Act
. The Company is not required, and upon the issuance and sale of
the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Registration Statement
and the Prospectus will not be required, to register as an
“investment company” under the Investment Company Act
of 1940, as amended (the “1940 Act”).
(xxii) 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) (the “Insider
Letters”), pursuant to which the initial stockholders who own
shares of Common Stock immediately prior to the consummation of the
offering pursuant to this Agreement (the “Initial
Stockholders”) of the Company agree to certain matters,
including but not limited to, certain matters described as being
agreed to by it under the “Proposed Business” section
of the Prospectus.
(xxiii) Finder’s Fees .
Except as set forth in the Registration Statement and 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 of the Initial
Stockholders 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 of
the Initial Stockholders that may affect the Underwriters’
compensation, as determined by the National Association of
Securities Dealers, Inc. (the “NASD”).
7
(xxiv) 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 FTN.
(xxv) Use of Proceeds . None
of the net proceeds of this 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.
(xxvi) Insiders’ NASD
Affiliation . Based on questionnaires distributed to such
persons, other than as set forth in Schedule D hereto, 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.
(xxvii) Possession of
Intellectual Property . The Company owns or possesses, or can
acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property
(collectively, “Intellectual Property”) necessary to
carry on the business now operated by them, and the Company has not
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect
the interest of the Company, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect.
(xxviii) Statistical and
Market-Related Data . Any statistical and market-related data
included in the Registration Statement, the General Disclosure
Package and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate.
(b) Officer’s
Certificates. Any certificate signed by any officer of the
Company delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to
Underwriters; Closing .
(a) Initial Units. On the
basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per Unit set forth in Schedule B,
the number of Initial Units set forth in Schedule A opposite the
name of such Underwriter.
(b) Option Units. In
addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth,
the Company hereby grants an option
8
to the Underwriters, severally and not jointly,
to purchase up to an additional 2,500,000 Units at the price per
unit set forth in Schedule B, less an amount per unit equal to any
dividends or distributions declared by the Company and payable on
the Initial Units but not payable on the Option Units. The option
hereby granted will expire 45 days after the date hereof and
may be exercised in whole or in part from time to time only for the
purpose of covering overallotments which may be made in connection
with the offering and distribution of the Initial Units upon notice
by the Representative to the Company setting forth the number of
Option Units as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery
for such Option Units. Any such time and date of delivery (a
“Date of Delivery”) shall be determined by the
Representative, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Units, each of the
Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Units then being purchased
which the number of Initial Units set forth in Schedule A opposite
the name of such Underwriter bears to the total number of Initial
Units, subject in each case to such adjustments as FTN in its
discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Purchase Option . The
Company hereby agrees to issue and sell to the Representative
(and/or its designees) on the Effective Date an option (the
“Representative’s Purchase Option”) for the
purchase of an aggregate of 833,333 Units (the
“Representative’s Units”) for an aggregate
purchase price of $6,249,997.50. Each of the Representative’s
Units is identical to the Initial Units except that the Warrants
included in the Representative’s Units (the
“Representative’s Warrants”) have an exercise
price of $6.25 (125% of the exercise price of the Warrants included
in the Units sold to the public). The Representative’s
Purchase Option shall be exercisable, in whole or in part,
commencing on the later of (i) one year from the Effective
Date and (ii) the consummation of a Business Combination and
expiring on the five-year anniversary of the Effective Date at an
initial exercise price per Representative’s Unit of $7.50,
which is equal to 125% of the initial public offering price of a
Unit. The Representative’s Purchase Option, the
Representative’s Units, the Representative’s Warrants
and the shares of Common Stock issuable upon exercise of the
Representative’s Warrants are hereinafter referred to
collectively as the “Representative’s
Securities.”
(d) Payment. Payment of the
purchase price for, and delivery of certificates for, the Initial
Units shall be made at the offices of Sidley Austin LLP at 787
Seventh Avenue, New York, NY 10019, or at such other place as shall
be agreed upon by the Representative and the Company, at
9:00 A.M. (Eastern time) on the fourth (fifth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business
day after the date hereof, or such other time not later than ten
business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and
delivery being herein called “Closing
Time”).
In addition, in the event that any
or all of the Option Units are purchased by the Underwriters,
payment of the purchase price for, and delivery of certificates
for, such Option Units shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the
Representative and the Company, on each Date of Delivery as
specified in the notice from the Representative to the
Company.
Payment shall be made to the Company
by wire transfer of immediately available funds to a bank account
designated by the Company, against delivery to the Representative
for the respective accounts of the Underwriters of certificates for
the Units to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to
accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Units and the Option Units, if any, which it
has agreed to purchase. FTN, individually and not as representative
of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Units or the Option
Units, if any, to be purchased by any Underwriter whose funds have
not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve
such Underwriter from its obligations hereunder.
9
(e) Management Warrant
Purchase. The directors and officers of the Company will agree
with the Representative, at the close of this offering, to place an
irrevocable order with a third party broker-dealer, in accordance
with guidelines specified by Rule 10b5-1 under the Securities
Exchange Act of 1934, as amended (the “1934 Act”) to
purchase the number of the Company’s Warrants having an
aggregate purchase price of $1,000,000, on behalf of themselves
collectively, in the open market, within the 60-trading days
beginning on the later of the date that the Warrants begin to trade
separately and 90 days after the end of the “restricted
period” under Regulation M. The purchases of the Warrants on
behalf of the directors and officers of the Company will be made by
a broker-dealer who has not participated in the in the offering
contemplated in this Agreement in such amounts and at such times as
that broker-dealer may determine, in its sole discretion, subject
to any regulatory restrictions. The directors and officers of the
Company will not have any discretion or influence with respect to
such purchases. If at the end of such 60 trading-day period the
broker-dealer has not purchased up to the maximum of $1,000,000 of
the Company’s Warrants on behalf of the Company’s
officers and directors, then such officers and directors will
purchase Warrants from the Company in a private placement at a
price per Warrant to be agreed upon, but in no event less than
$0.70 per warrant, in an amount equal to the difference of
$1,000,000 and the total amount paid by the broker-dealer. The
directors and officers of the Company will agree not to sell or
transfer such Warrants until after the completion of a Business
Combination.
(f) Denominations;
Registration. Certificates for the Securities shall be in such
denominations and registered in such names as the Representative
may request in writing at least one full business day before the
Closing Time or the relevant Date of Delivery, as the case may be.
The certificates for the Securities will be made available for
examination and packaging by the Representative in The City of New
York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the
Company . The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities
Regulations and Commission Requests. The Company, subject to
Section 3(b) below, will comply with the requirements of Rule
430A and will notify the Representative immediately, and confirm
the notice in writing, (i) when any post-effective amendment
to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have
been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such
purposes. The Company will effect the filings required under Rule
424(b), in the manner and within the time period required under
Rule 424(b) (without reliance on Rule 424(b)(8)) and will take such
steps as it deems necessary to ascertain promptly whether the form
of prospectus transmitted for filing under Rule 424(b) was received
for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of Amendments. The
Company will give the Representative notice of its intention to
file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment,
supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus and will furnish the Representative with copies of any
such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any
such document to which the Representative or counsel for the
Underwriters shall object.
10
(c) Delivery of Registration
Statements. The Company has furnished or will deliver to the
Representative and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses.
The Company has delivered to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company
will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act,
such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with
Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement
and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably
request. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted
or would conflict with the information contained in the Statutory
Prospectus at the Applicable Time or in the Registration Statement
relating to the 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 will promptly notify FTN and will
promptly amend or supplement, at its own expense, such Issuer Free
Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(f) Blue Sky Qualifications.
The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Public Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect for a
period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that
11
the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(g) Rule 158. The Company
will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for
the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(h) Use of Proceeds. The
Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under
“Use of Proceeds”.
(i) Quotation. The Company
will use its best efforts to effect and maintain the quotation of
the Units, the Common Stock and the Warrants on the OTC Bulletin
Board.
(j) Restriction on Sale of
Securities. Until the consummation of a Business Combination,
the Company will not, without the prior written consent of FTN,
(i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any share of Common Stock or
any securit
