UNDERWRITING AGREEMENT
BETWEEN
ASCEND ACQUISITION CORP.
AND
EARLYBIRDCAPITAL, INC.
DATED: __________, 2006
ASCEND ACQUISITION CORP.
UNDERWRITING AGREEMENT
New York, New York
________, 2006
EarlyBirdCapital, Inc.
275 Madison Avenue, Suite 1203
New York, New York 10016
Dear Sirs:
The undersigned, Ascend Acquisition Corp., a Delaware corporation
("Company"), hereby confirms its agreement with EarlyBirdCapital,
Inc. (being
referred to herein variously as "you," "EBC" or the "Underwriter")
as follows:
1. Purchase and Sale of Securities.
1.1 Firm Securities.
1.1.1 Purchase of Firm Units. On the basis of the representations
and
warranties herein contained, but subject to the terms and
conditions herein set
forth, the Company agrees to issue and sell to the Underwriter, and
the
Underwriter agrees to purchase from the Company, 6,000,000 units
("Firm Units")
at a purchase price (net of discounts and commissions) of $5.52 per
Firm Unit
(including discounts and commissions of $0.138 that will not be
paid to the
Underwriter unless and until a Business Combination (as defined
below) has been
consummated by the Company). The Underwriter agrees that it will
not seek
payment of the discounts and commissions of $0.138 referred to in
the preceding
sentence unless and until a Business Combination has been
consummated by the
Company, and the Company agrees that it shall pay such discounts
and commissions
only upon consummation of such Business Combination. The Firm Units
are to be
offered initially to the public ("Offering") at the offering price
of $6.00 per
Firm Unit. Each Firm Unit consists of one share of the Company's
common stock,
par value $.0001 per share ("Common Stock"), and two warrants
("Warrant(s)").
The shares of Common Stock and the Warrants included in the Firm
Units will not
be separately transferable until 90 days after the effective date
("Effective
Date") of the Registration Statement (as defined in Section 2.1.1
hereof) unless
EBC informs the Company of its decision to allow earlier separate
trading, but
in no event will EBC allow separate trading until the preparation
of an audited
balance sheet of the Company reflecting receipt by the Company of
the proceeds
of the Offering and the filing of a Form 8-K by the Company which
includes such
balance sheet. Each Warrant entitles its holder to exercise it to
purchase one
share of Common Stock for $5.00 during the period commencing on the
later of the
consummation by the Company of its "Business Combination" or one
year from the
Effective Date and terminating on the four-year anniversary of the
Effective
Date. "Business Combination" shall mean any merger, capital stock
exchange,
asset acquisition or other similar business combination consummated
by the
Company with an operating business (as described more fully in the
Registration
Statement).
1.1.2 Payment and Delivery. Delivery and payment for the Firm Units
shall be made at 10:00 A.M., New York time, on the fourth business
day following
the effective date or at such earlier time as shall be agreed upon
by the
Underwriter and the Company at the offices of the Underwriter or at
such other
place as shall be agreed upon by the Underwriter and the Company.
The hour and
date of delivery and payment for the Firm Units are called "Closing
Date."
Payment for the Firm Units shall be made on the Closing Date at the
Underwriter's election by wire transfer in Federal (same day) funds
or by
certified or bank cashier's check(s) in New York Clearing House
funds, payable
as follows: $32,488,000 of the proceeds received by the Company for
the Firm
Units shall be deposited in the trust fund established by the
Company
1
for the benefit of the public stockholders as described in the
Registration
Statement ("Trust Fund") pursuant to the terms of an Investment
Management Trust
Agreement ("Trust Agreement") and the remaining proceeds shall be
paid (subject
to Section 3.13 hereof) to the order of the Company upon delivery
to you of
certificates (in form and substance satisfactory to the
Underwriters)
representing the Firm Units (or through the facilities of the
Depository Trust
Company ("DTC")) for the account of the Underwriter. The Firm Units
shall be
registered in such name or names and in such authorized
denominations as the
Underwriter may request in writing at least two full business days
prior to the
Closing Date. The Company will permit the Underwriter 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 Underwriter for all the Firm
Units.
1.2 Over-Allotment Option.
1.2.1 Option Units. For the purposes of covering any
over-allotments
in connection with the distribution and sale of the Firm Units, the
Underwriter
is hereby granted an option to purchase up to an additional 900,000
units from
the Company ("Over-allotment Option"). Such additional 900,000
units are
hereinafter referred to as "Option Units." The Firm Units and the
Option Units
are hereinafter collectively referred to as the "Units," and the
Units, the
shares of Common Stock and the Warrants included in the Units and
the shares of
Common Stock issuable upon exercise of the Warrants are hereinafter
referred to
collectively as the "Public Securities." The purchase price to be
paid for the
Option Units will be the same price per Option Unit as the price
per Firm Unit
set forth in Section 1.1.1 hereof.
1.2.2 Exercise of Option. The Over-allotment Option granted
pursuant
to Section 1.2.1 hereof may be exercised by the Underwriter 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 Underwriter will not be under any
obligation to purchase
any Option Units prior to the exercise of the Over-allotment
Option. The
Over-allotment Option granted hereby may be exercised by the giving
of oral
notice to the Company by the Underwriter, which must be confirmed
in writing by
overnight mail or facsimile transmission setting forth the number
of Option
Units to be purchased and the date and time for delivery of and
payment for the
Option Units (the "Option Closing Date"), which will not be later
than five full
business days after the date of the notice or such other time as
shall be agreed
upon by the Company and the Underwriter, at the offices of the
Underwriter or at
such other place as shall be agreed upon by the Company and the
Underwriter.
Upon exercise of the Over-allotment Option, the Company will become
obligated to
convey to the Underwriter, and, subject to the terms and conditions
set forth
herein, the Underwriter 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 Underwriter's election by wire
transfer in
Federal (same day) funds or by certified or bank cashier's check(s)
in New York
Clearing House funds, payable as follows: approximately $5.58 per
Option Unit
shall be deposited in the Trust Fund pursuant to the Trust
Agreement and the
remaining proceeds shall be paid (subject to Section 3.13 hereof)
to the order
of the Company upon delivery to you of certificates (in form and
substance
satisfactory to the Underwriter) representing the Option Units (or
through the
facilities of DTC) for the account of the Underwriter. The
certificates
representing the Option Units to be delivered will be in such
denominations and
registered in such names as the Underwriter requests not less than
two full
business days prior to the Closing Date or the Option Closing Date,
as the case
may be, and will be made available to the Underwriter 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.
2
1.3 Underwriter's Purchase Option.
1.3.1 Purchase Option. The Company hereby agrees to issue and sell
to
the Underwriter (and/or its designees) on the Effective Date an
option
("Underwriter's Purchase Option") for the purchase of an aggregate
of ____ units
("Underwriter's Units") for an aggregate purchase price of $100.
Each of the
Underwriter's Units is identical to the Firm Units. The
Underwriter's Purchase
Option shall be exercisable, in whole or in part, commencing on the
later of the
consummation of a Business Combination and one year from the
Effective Date and
expiring on the five-year anniversary of the Effective Date at an
initial
exercise price per Underwriter's Unit of $___ (___% of the initial
public
offering price of a Unit). The Underwriter's Purchase Option, the
Underwriter's
Units, the Warrants included in the Underwriter's Units
("Underwriter's
Warrants") and the shares of Common Stock issuable upon exercise of
the
Underwriter's Warrants are hereinafter referred to collectively as
the
"Underwriter's Securities." The Public Securities and the
Underwriter's
Securities are hereinafter referred to collectively as the
"Securities." The
Underwriter understands and agrees that there are significant
restrictions
against transferring the Underwriter's Purchase Option during the
first year
after the Effective Date, as set forth in Section 3 of the
Underwriter's
Purchase Option.
1.3.2 Payment and Delivery. Delivery and payment for the
Underwriter's
Purchase Option shall be made on the Closing Date. The Company
shall deliver to
the Underwriter, upon payment therefor, certificates for the
Underwriter's
Purchase Option in the name or names and in such authorized
denominations as the
Underwriter may request.
2. Representations and Warranties of the Company. The Company
represents and
warrants to the Underwriter as follows:
2.1 Filing of Registration Statement.
2.1.1 Pursuant to the Act. The Company has filed with the
Securities
and Exchange Commission ("Commission") a registration statement and
an amendment
or amendments thereto, on Form S-1 (File No. 333-131529), including
any related
preliminary prospectus ("Preliminary Prospectus"), for the
registration of the
Public Securities under the Securities Act of 1933, as amended
("Act"), which
registration statement and amendment or amendments have been
prepared by the
Company in conformity with the requirements of the Act, and the
rules and
regulations ("Regulations") of the Commission under the Act. Except
as the
context may otherwise require, such registration statement, as
amended, on file
with the Commission at the time the registration statement becomes
effective
(including the prospectus, financial statements, schedules,
exhibits and all
other documents filed as a part thereof or incorporated therein and
all
information deemed to be a part thereof as of such time pursuant to
paragraph
(b) of Rule 430A of the Regulations), is hereinafter called the
"Registration
Statement," and the form of the final prospectus dated the
Effective Date
included in the Registration Statement (or, if applicable, the form
of final
prospectus filed with the Commission pursuant to Rule 424 of the
Regulations),
is hereinafter called the "Prospectus." The Registration Statement
has been
declared effective by the Commission on the date hereof.
2.1.2 Pursuant to the Exchange Act. The Company has filed with the
Commission a Form 8-A (File Number 000-51840) providing for the
registration
under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), of the
Units, the Common Stock and the Warrants. The registration of the
Units, Common
Stock and Warrants under the Exchange Act has been declared
effective by the
Commission on the date hereof.
2.2 No Stop Orders, Etc. Neither the Commission nor, to the best of
the
Company's knowledge, any state regulatory authority has issued any
order or
threatened to issue any order preventing or suspending the use of
any
Preliminary Prospectus or has instituted or, to the best of the
Company's
knowledge, threatened to institute any proceedings with respect to
such an
order.
3
2.3 Disclosures in Registration Statement.
2.3.1 10b-5 Representation. At the time the Registration Statement
became effective and at all times subsequent thereto up to the
Closing Date and
the Option Closing Date, if any, the Registration Statement and the
Prospectus
does and will contain all material statements that are required to
be stated
therein in accordance with the Act and the Regulations, and will in
all material
respects conform to the requirements of the Act and the
Regulations; neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement
thereto, on such dates, does or will contain any untrue statement
of a material
fact or omit to state any material fact required to be stated
therein or
necessary to make the statements therein, in light of the
circumstances under
which they were made, not misleading. When any Preliminary
Prospectus was first
filed with the Commission (whether filed as part of the
Registration Statement
for the registration of the Securities or any amendment thereto or
pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement
thereto was first filed with the Commission, such Preliminary
Prospectus and any
amendments thereof and supplements thereto complied or will comply
in all
material respects with the applicable provisions of the Act and the
Regulations
and did not and will not contain an untrue statement of a material
fact or omit
to state any material fact required to be stated therein or
necessary in order
to make the statements therein, in light of the circumstances under
which they
were made, not misleading. The representation and warranty made in
this Section
2.3.1 does not apply to statements made or statements omitted in
reliance upon
and in conformity with written information furnished to the Company
with respect
to the Underwriter by the Underwriter expressly for use in the
Registration
Statement or Prospectus or any amendment thereof or supplement
thereto.
2.3.2 Disclosure of Agreements. The agreements and documents
described
in the Registration Statement and the Prospectus conform to the
descriptions
thereof contained therein and there are no agreements or other
documents
required to be described in the Registration Statement or the
Prospectus or to
be filed with the Commission as exhibits to the Registration
Statement, that
have not been so described or filed. Each agreement or other
instrument (however
characterized or described) to which the Company is a party or by
which its
property or business is or may be bound or affected and (i) that is
referred to
in the Prospectus, or (ii) is material to the Company's business,
has been duly
and validly executed by the Company, is in full force and effect
and is
enforceable against the Company and, to the Company's knowledge,
the other
parties thereto, in accordance with its terms, except (x) as such
enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting creditors' rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the
federal and
state securities laws, and (z) that the remedy of specific
performance and
injunctive and other forms of equitable relief may be subject to
the equitable
defenses and to the discretion of the court before which any
proceeding therefor
may be brought, and none of such agreements or instruments has been
assigned by
the Company, and neither the Company nor, to the best of the
Company's
knowledge, any other party is in breach or default thereunder and,
to the best
of the Company's knowledge, no event has occurred that, with the
lapse of time
or the giving of notice, or both, would constitute a breach or
default
thereunder. To the best of the Company's knowledge, performance by
the Company
of the material provisions of such agreements or instruments will
not result in
a violation of any existing applicable law, rule, regulation,
judgment, order or
decree of any governmental agency or court, domestic or foreign,
having
jurisdiction over the Company or any of its assets or businesses,
including,
without limitation, those relating to environmental laws and
regulations.
2.3.3 Prior Securities Transactions. No securities of the Company
have
been sold by the Company or by or on behalf of, or for the benefit
of, any
person or persons controlling, controlled by, or under common
control with the
Company since the Company's formation, except as disclosed in the
Registration
Statement.
2.3.4 Regulations. The disclosures in the Registration Statement
concerning the effects of Federal, State and local regulation on
the Company's
business as currently contemplated are correct in all material
respects and do
not omit to state a material fact.
4
2.4 Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus,
except as otherwise specifically stated therein, (i) there has been
no material
adverse change in the condition, financial or otherwise, or
business prospects
of the Company, (ii) there have been no material transactions
entered into by
the Company, other than as contemplated pursuant to this Agreement,
and (iii) no
member of the Company's management has resigned from any position
with the
Company.
2.4.2 Recent Securities Transactions, Etc. Subsequent to the
respective dates as of which information is given in the
Registration Statement
and the Prospectus, and except as may otherwise be indicated or
contemplated
herein or therein, the Company has not (i) issued any securities or
incurred any
liability or obligation, direct or contingent, for borrowed money;
or (ii)
declared or paid any dividend or made any other distribution on or
in respect to
its equity securities.
2.5 Independent Accountants. Goldstein Golub Kessler LLP ("GGK"),
whose
report is filed with the Commission as part of the Registration
Statement, are
independent accountants as required by the Act and the Regulations.
GGK has not,
during the periods covered by the financial statements included in
the
Prospectus, provided to the Company any non-audit services, as such
term is used
in Section 10A(g) of the Exchange Act.
2.6 Financial Statements. The financial statements, including the
notes
thereto and supporting schedules included in the Registration
Statement and
Prospectus fairly present the financial position, the results of
operations and
the cash flows of the Company at the dates and for the periods to
which they
apply; and such financial statements have been prepared in
conformity with
generally accepted accounting principles, consistently applied
throughout the
periods involved; and the supporting schedules included in the
Registration
Statement present fairly the information required to be stated
therein. The
summary financial data included in the Registration Statement and
the Prospectus
present fairly the information shown thereon and have been compiled
on a basis
consistent with the audited financial statements presented therein.
No other
financial statements or schedules are required to be included in
the
Registration Statement or the Prospectus. The Registration
Statement discloses
all material off-balance sheet transactions, arrangements,
obligations
(including contingent obligations), and other relationships of the
Company with
unconsolidated entities or other persons that may have a material
current or
future effect on the Company's financial condition, changes in
financial
condition, results of operations, liquidity, capital expenditures,
capital
resources, or significant components of revenues or expenses.
2.7 Authorized Capital; Options; Etc. The Company had at the date
or dates
indicated in the Prospectus duly authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the
Prospectus.
Based on the assumptions stated in the Registration Statement and
the
Prospectus, the Company will have on the Closing Date the adjusted
stock
capitalization set forth therein. Except as set forth in, or
contemplated by,
the Registration Statement and the Prospectus, on the Effective
Date and on the
Closing Date, there will be no options, warrants, or other rights
to purchase or
otherwise acquire any authorized but unissued shares of Common
Stock of the
Company or any security convertible into shares of Common Stock of
the Company,
or any contracts or commitments to issue or sell shares of Common
Stock or any
such options, warrants, rights or convertible securities.
2.8 Valid Issuance of Securities; Etc.
2.8.1 Outstanding Securities. All issued and outstanding securities
of
the Company have been duly authorized and validly issued and are
fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect
thereto, and are not subject to personal liability by reason of
being such
holders; and none of such securities were issued in violation of
the preemptive
rights of any holders of any
5
security of the Company or similar contractual rights granted by
the Company.
The authorized Common Stock conforms to all statements relating
thereto
contained in the Registration Statement and the Prospectus. The
offers and sales
of the outstanding Common Stock were at all relevant times either
registered
under the Act and the applicable state securities or Blue Sky laws
or, based in
part on the representations and warranties of the purchasers of
such shares of
Common Stock, exempt from such registration requirements.
2.8.2 Securities Sold Pursuant to this Agreement. The Securities
have
been duly authorized and, when issued and paid for, will be validly
issued,
fully paid and non-assessable; the holders thereof are not and will
not be
subject to personal liability by reason of being such holders; the
Securities
are not and will not be subject to the preemptive rights of any
holders of any
security of the Company or similar contractual rights granted by
the Company;
and all corporate action required to be taken for the
authorization, issuance
and sale of the Securities has been duly and validly taken. The
Securities
conform in all material respects to all statements with respect
thereto
contained in the Registration Statement. When issued, the
Underwriter's Purchase
Option, the Underwriter'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 Underwriter's Purchase Option, the Underwriter's
Warrants and
the Warrants are enforceable against the Company in accordance with
their
respective terms, except (i) as such enforceability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors'
rights generally, (ii) as enforceability of any indemnification or
contribution
provision may be limited under the federal and state securities
laws, and (iii)
that the remedy of specific performance and injunctive and other
forms of
equitable relief may be subject to the equitable defenses and to
the discretion
of the court before which any proceeding therefor may be brought.
2.8.3 Insider Units. Don K. Rice (the "Unit Purchaser"), one of the
Company's stockholders immediately prior to the Offering (all of
which
stockholders are referred to as the "Initial Stockholders"), has
committed to
purchase an aggregate of 166,667 Units ("Insider Units") at $6.00
per Unit (for
an aggregate purchase price of $1,000,002) from the Company upon
consummation of
the Offering. The Insider Units have been duly authorized and, when
issued and
paid for in accordance with the subscription agreement
("Subscription
Agreement") entered into by the Unit Purchaser to purchase such
Insider Units,
will be validly issued, fully paid and non-assessable; the holders
thereof are
not and will not be subject to personal liability by reason of
being such
holders; the Insider Units are not and will not be subject to the
preemptive
rights of any holders of any security of the Company or similar
contractual
rights granted by the Company; and all corporate action required to
be taken for
the authorization, issuance and sale of the Insider Units has been
duly and
validly taken.
2.9 Registration Rights of Third Parties. Except as set forth in
the
Prospectus, no holders of any securities of the Company or any
rights
exercisable for or convertible or exchangeable into securities of
the Company
have the right to require the Company to register any such
securities of the
Company under the Act or to include any such securities in a
registration
statement to be filed by the Company.
2.10 Validity and Binding Effect of Agreements. This Agreement, the
Warrant
Agreement (as defined in Section 2.21 hereof), the Trust Agreement,
the Services
Agreement (as defined in Section 3.7.2 hereof), the Subscription
Agreement and
the Escrow Agreement (as defined in Section 2.22.2 hereof) have
been duly and
validly authorized by the Company and constitute, and the
Underwriter's Purchase
Option, has been duly and validly authorized by the Company and,
when executed
and delivered, will constitute, the valid and binding agreements of
the Company,
enforceable against the Company in accordance with their respective
terms,
except (i) as such enforceability may be limited by bankruptcy,
insolvency,
reorganization or similar laws affecting creditors' rights
generally, (ii) as
enforceability of any indemnification or contribution provision may
be limited
under the federal and state securities laws, and (iii) that the
remedy of
specific performance and injunctive and other forms of equitable
relief may be
subject to the equitable defenses and to the discretion of the
court before
which any proceeding therefor may be brought.
6
2.11 No Conflicts, Etc. The execution, delivery, and performance by
the
Company of this Agreement, the Warrant Agreement, the Underwriter's
Purchase
Option, the Trust Agreement, the Services Agreement, the
Subscription 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 Certificate of Incorporation or
the Bylaws of
the Company; or (iii) violate any existing applicable law, rule,
regulation,
judgment, order or decree of any governmental agency or court,
domestic or
foreign, having jurisdiction over the Company or any of its
properties or
business.
2.12 No Defaults; Violations. No material default exists in the due
performance and observance of any term, covenant or condition of
any material
license, contract, indenture, mortgage, deed of trust, note, loan
or credit
agreement, or any other agreement or instrument evidencing an
obligation for
borrowed money, or any other material agreement or instrument to
which the
Company is a party or by which the Company may be bound or to which
any of the
properties or assets of the Company is subject. The Company is not
in violation
of any term or provision of its Certificate of Incorporation or
Bylaws or in
violation of any material franchise, license, permit, applicable
law, rule,
regulation, judgment or decree of any governmental agency or court,
domestic or
foreign, having jurisdiction over the Company or any of its
properties or
businesses.
2.13 Corporate Power; Licenses; Consents.
2.13.1 Conduct of Business. The Company has all requisite corporate
power and authority, and has all necessary authorizations,
approvals, orders,
licenses, certificates and permits of and from all governmental
regulatory
officials and bodies that it needs as of the date hereof to conduct
its business
purpose as described in the Prospectus. The disclosures in the
Registration
Statement concerning the effects of federal, state and local
regulation on this
offering and the Company's business purpose as currently
contemplated are
correct in all material respects and do not omit to state a
material fact
required to be stated therein or necessary in order to make the
statements
therein, in light of the circumstances under which they were made,
not
misleading.
2.13.2 Transactions Contemplated Herein. The Company has all
corporate
power and authority to enter into this Agreement and to carry out
the provisions
and conditions hereof, and all consents, authorizations, approvals
and orders
required in connection therewith have been obtained. No consent,
authorization
or order of, and no filing with, any court, government agency or
other body is
required for the valid issuance, sale and delivery, of the
Securities and the
consummation of the transactions and agreements contemplated by
this Agreement,
the Warrant Agreement, the Underwriter's Purchase Option, the Trust
Agreement
and the Escrow Agreement and as contemplated by the Prospectus,
except with
respect to applicable federal and state securities laws.
2.14 D&O Questionnaires. To the best of the Company's
knowledge, all
information contained in the questionnaires ("Questionnaires")
completed by each
of the Initial Stockholders and provided to the Underwriter as an
exhibit to his
or her Insider Letter (as defined in Section 2.22.1) is true and
correct and the
Company has not become aware of any information which would cause
the
information disclosed in the questionnaires completed by each
Initial
Stockholder to become inaccurate and incorrect.
2.15 Litigation; Governmental Proceedings. There is no action,
suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental
proceeding pending or, to the best of the Company's
7
knowledge, threatened against, or involving the Company or, to the
best of the
Company's knowledge, any Initial Stockholder, which has not been
disclosed in
the Registration Statement or the Questionnaires.
2.16 Good Standing. The Company has been duly organized and is
validly
existing as a corporation and is in good standing under the laws of
its state of
incorporation, and is duly qualified to do business and is in good
standing as a
foreign corporation in each jurisdiction in which its ownership or
lease of
property or the conduct of business requires such qualification,
except where
the failure to qualify would not have a material adverse effect on
the assets,
business or operations of the Company.
2.17 Stop Orders. The Commission has not issued any order
preventing or
suspending the use of any Preliminary Prospectus or Prospectus or
any part
thereof and has not threatened to issue any such order.
2.18 Transactions Affecting Disclosure to NASD.
2.18.1 Finder's Fees. Except as described in the Prospectus, there
are
no claims, payments, arrangements, agreements or understandings
relating to the
payment of a finder's, consulting or origination fee by the Company
or any
Initial Stockholder with respect to the sale of the Securities
hereunder or any
other arrangements, agreements or understandings of the Company or,
to the best
of the Company's knowledge, any Initial Stockholder that may affect
the
Underwriter's compensation, as determined by the National
Association of
Securities Dealers, Inc. ("NASD").
2.18.2 Payments Within Twelve Months. Other than payments to EBC,
the
Company has not within the twelve months prior to the Effective
Date 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.
2.18.3 Use of Proceeds. None of the net proceeds of the Offering
will
be paid by the Company to any participating NASD member or its
affiliates,
except as specifically authorized herein and except as may be paid
in connection
with a Business Combination as contemplated by the Prospectus.
2.18.4 Insiders' NASD Affiliation. Based on questionnaires
distributed
to such persons, except as set forth on Schedule 2.18.4, no
officer, director or
any beneficial owner of the Company's unregistered securities has
any direct or
indirect affiliation or association with any NASD member. The
Company will
advise the Underwriter and its counsel if it learns that any
officer, director
or owner of at least 5% of the Company's outstanding Common Stock
is or becomes
an affiliate or associated person of an NASD member participating
in the
offering.
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 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
8
procedures are sufficient to cause the Company to comply with the
Foreign
Corrupt Practices Act of 1977, as amended.
2.20. Officers' Certificate. Any certificate signed by any duly
authorized
officer of the Company and delivered to you or to your counsel
shall be deemed a
representation and warranty by the Company to the Underwriter as to
the matters
covered thereby.
2.21 Warrant Agreement. The Company has entered into a warrant
agreement
with respect to the Warrants, the Warrants underlying the Insider
Units (the
"Insider Warrants" and together with the Insider Units and the
Common Stock
underlying such Insider Units, the "Insider Securities") and the
Underwriter's
Warrants with Continental Stock Transfer & Trust Company
substantially in the
form annexed as Exhibit 4.5 to the Registration Statement ("Warrant
Agreement").
2.22 Agreements With Initial Stockholders.
2.22.1 Insider Letters. The Company has caused to be duly executed
legally binding and enforceable agreements (except (i) as such
enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting creditors' rights generally, (ii) as enforceability of
any
indemnification, contribution or noncompete provision may be
limited under the
federal and state securities laws, and (iii) that the remedy of
specific
performance and injunctive and other forms of equitable relief may
be subject to
the equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought) annexed as Exhibits 10.1, 10.2,
10.3 and
10.4 to the Registration Statement ("Insider Letters"), pursuant to
which each
of the Initial Stockholders of the Company agrees to certain
matters, including
but not limited to, certain matters described as being agreed to by
them under
the "Proposed Business" section of the Prospectus.
2.22.2 Escrow Agreement. The Company has caused the Initial
Stockholders to enter into an escrow agreement ("Escrow Agreement")
with
Continental Stock Transfer & Trust Company ("Escrow Agent")
substantially in the
form annexed as Exhibit 10.6 to the Registration Statement, whereby
the Common
Stock owned by the Initial Stockholders will be held in escrow by
the Escrow
Agent, until the third anniversary of the Effective Date. During
such escrow
period, the Initial Stockholders shall be prohibited from selling
or otherwise
transferring such shares (except to spouses and children of Initial
Stockholders
and trusts established for their benefit and as otherwise set forth
in the
Escrow Agreement) but will retain the right to vote such shares. To
the
Company's knowledge, the Escrow Agreement is enforceable against
each of the
Initial Stockholders and will not, with or without the giving of
notice or the
lapse of time or both, result in a breach of, or conflict with any
of the terms
and provisions of, or constitute a default under, any agreement or
instrument to
which any of the Initial Stockholders is a party. The Escrow
Agreement shall not
be amended, modified or otherwise changed without the prior written
consent of
EBC.
2.22.3 Subscription Agreement. The Company has entered into the
Subscription Agreement substantially in the form annexed as Exhibit
10.10 to the
Registration Statement with the Unit Purchaser to purchase the
Insider Units.
Pursuant to the Subscription Agreement, the Unit Purchaser shall
place the
purchase price for the Insider Units in escrow prior to the
consummation of the
Offering. Simultaneously with the consummation of the Offering,
such purchase
price shall be deposited into the Trust Fund pursuant to the Trust
Agreement.
2.23 Intentionally Omitted.
2.24 Investment Management Trust Agreement. The Company has entered
into
the Trust Agreement with respect to certain proceeds of the
Offering
substantially in the form annexed as Exhibit 10.5 to the
Registration Statement.
9
2.25 Covenants Not to Compete. No Initial Stockholder, employee,
officer or
director of the Company is subject to any noncompetition agreement
or
non-solicitation agreement with any employer or prior employer
which could
materially affect his ability to be an Initial Stockholder,
employee, officer
and/or director of the Company.
2.26 Investment Company Act; Investments. The Company has been
advised
concerning the Investment Company Act of 1940, as amended (the
"Investment
Company Act"), and the rules and regulations thereunder and has in
the past
conducted, and intends in the future to conduct, its affairs in
such a manner as
to ensure that it will not become an "investment company" or a
company
"controlled" by an "investment company" within the meaning of the
Investment
Company Act and such rules and regulations. The Company is not, nor
will the
Company become upon the sale of the Units and the application of
the proceeds
therefore as described in the Prospectus under the caption "Use of
Proceeds", an
"investment company" or a person controlled by an "investment
company" within
the meaning of the Investment Company Act. No more than 45% of the
"value" (as
defined in Section 2(a)(41) of the Investment Company Act) of the
Company's
total assets (exclusive of cash items and "Government Securities"
(as defined in
Section 2(a)(16) of the Investment Company Act) consist of, and no
more than 45%
of the Company's net income after taxes is derived from, securities
other than
the Government Securities.
2.27 Subsidiaries. The Company does not own an interest in any
corporation,
partnership, limited liability company, joint venture, trust or
other business
entity.
2.28 Related Party Transactions. There are no business
relationships or
related party transactions involving the Company or any other
person required to
be described in the Prospectus that have not been described as
required. 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 or
Initial
Stockholders of the Company or any of the members of the families
of any of
them, except as disclosed in the Registration Statement and the
Prospectus.
2.29 No Distribution of Offering Material. The Company has not
distributed
and will not distribute prior to the Closing Date any offering
material in
connection with the offering and sale of the Units other than any
Preliminary
Prospectuses, the Prospectus, the Registration Statement and other
materials, if
any, permitted by the Act.
2.30 Title to Assets. Except as set forth in the Registration
Statement and
Prospectus, the Company has good and marketable title to all
properties and
assets described in the Registration Statement and Prospectus as
owned by it,
free and clear of any pledge, lien, security interest,
encumbrances, claim or
equitable interest, other than such as would not have a material
adverse effect
on the financial condition, earnings, operations, business or
business prospects
of the Company.
2.31 Taxes. The Company has timely filed all necessary federal,
state and
foreign income and franchise tax returns and has paid all taxes
shown thereon as
due, and there is no tax deficiency that has been or, to the best
of the
Company's knowledge, might be asserted against the Company that
might have a
material adverse effect on the financial condition, earnings,
operations,
business or business prospects of the Company, and all material tax
liabilities
are adequately provided for on the books of the Company.
3. Covenants of the Company. The Company covenants and agrees as
follows:
3.1 Amendments to Registration Statement. The Company will deliver
to the
Underwriter, 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 Underwriter
shall reasonably
object in writing.
10
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is required to
be
delivered under the Act, the Company will use its best efforts to
comply with
all requirements imposed upon it by the Act, the Regulations and
the Exchange
Act and by the regulations under the Exchange Act, as from time to
time in
force, so far as necessary to permit the continuance of sales of or
dealings in
the Public Securities in accordance with the provisions hereof and
the
Prospectus. If at any time when a Prospectus relating to the Public
Securities
is required to be delivered under the Act, any event shall have
occurred as a
result of which, in the opinion of counsel for the Company or
counsel for the
Underwriter, the Prospectus, as then amended or supplemented,
includes an untrue
statement of a material fact or omits to state any material fact
required to be
stated therein or necessary to make the statements therein, in
light of the
circumstances under which they were made, not misleading, or if it
is necessary
at any time to amend the Prospectus to comply with the Act, the
Company will
notify the Underwriter promptly and prepare and file with the
Commission,
subject to Section 3.1 hereof, an appropriate amendment or
supplement in
accordance with Section 10 of the Act.
3.2.2 Filing of Final Prospectus. The Company will file the
Prospectus
(in form and substance satisfactory to the Underwriter) with the
Commission
pursuant to the requirements of Rule 424 of the Regulations.
3.2.3 Exchange Act Registration. The Company will use its best
efforts
to maintain the registration of the Units, Common Stock and
Warrants under the
provisions of the Exchange Act for a period of five years from the
Effective
Date, or until the Company is required to be liquidated, if earlier
or, in the
case of the Warrants, until the Warrants expire and are no longer
exercisable.
The Company will not deregister the Units under the Exchange Act
without the
prior written consent of EBC.
3.2.4 Ineligible Issuer. At the time of filing the Registration
Statement and at the date hereof, the Company was and is an
"ineligible issuer,"
as defined in Rule 405 under the Securities Act. The Company has
not made and
will not make any offer relating to the Public Securities that
would constitute
an "issuer free writing prospectus," as defined in Rule 433, or
that would
otherwise constitute a "free writing prospectus," as defined in
Rule 405.
3.3 Blue Sky Filings. The Company will use its best efforts, in
cooperation
with the Underwriter, 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 Underwriter may
reasonably
designate, provided that no such qualification shall be required in
any
jurisdiction where, as a result thereof, the Company would be
subject to service
of general process or to taxation as a foreign corporation doing
business in
such jurisdiction. In each jurisdiction where such qualification
shall be
effected, the Company will, unless the Underwriter agrees that such
action is
not at the time necessary or advisable, use its best efforts to
file and make
such statements or reports at such times as are or may be required
by the laws
of such jurisdiction.
3.4 Delivery to Underwriter of Prospectuses. The Company will
deliver to
the Underwriter, without charge, from time to time during the
period when the
Prospectus is required to be delivered under the Act or the
Exchange Act, such
number of copies of each Preliminary Prospectus and the Prospectus
as the
Underwriter may reasonably request and, as soon as the Registration
Statement or
any amendment or supplement thereto becomes effective, deliver to
you two
original executed Registration Statements, including exhibits, and
all
post-effective amendments thereto and copies of all exhibits filed
therewith or
incorporated therein by reference and all original executed
consents of
certified experts.
3.5 Effectiveness and Events Requiring Notice to the Underwriter.
The
Company will use its best efforts to cause the Registration
Statement to remain
effective and will notify the Underwriter immediately and confirm
the notice in
writing (i) of the effectiveness of the Registration Statement and
any amendment
thereto, (ii) of the issuance by the Commission of any stop order
or of the
initiation, or the threatening, of any
11
proceeding for that purpose, (iii) of the issuance by any state
securities
commission of any proceedings for the suspension of the
qualification of the
Public Securities for offering or sale in any jurisdiction or of
the initiation,
or the threatening, of any proceeding for that purpose, (iv) of the
mailing and
delivery to the Commission for filing of any amendment or
supplement to the
Registration Statement or Prospectus, (v) of the receipt of any
comments or
request for any additional information from the Commission, and
(vi) of the
happening of any event during the period described in Section 3.4
hereof that,
in the judgment of the Company, makes any statement of a material
fact made in
the Registration Statement or the Prospectus untrue or that
requires the making
of any changes in the Registration Statement or the Prospectus in
order to make
the statements therein, in light of the circumstances under which
they were
made, not misleading. If the Commission or any state securities
commission shall
enter a stop order or suspend such qualification at any time, the
Company will
use commercially reasonable effort to obtain promptly the lifting
of such order.
3.6 Review of Financial Statements. Until the earlier of five years
from
the Effective Date, or until such earlier time upon which the
Company is
required t
