UNDERWRITING AGREEMENT

 

and the trading pattern of, and demand for, the Company’s securities in particular. Maxim may decide to allow continued trading of the Units following such separation. In no event will Maxim allow separate trading until (i) the preparation of an audited balance sheet of the Company reflecting receipt by the Company of the proceeds of the Offering and the filing of such audited balance sheet with the Commission (as herein defined) on a Form 8-K or similar form by the Company which includes such balance sheet; (ii) the Company files a Form 8-K and issues a press release announcing when such separate trading will begin; and (iii) the Business Day (defined below) following the earliest to occur of the expiration of the Over-allotment Option (defined below) or the exercise of the Over-allotment Option in full.  Each Warrant entitles its holder to purchase one share of Common Stock for $4.10 per share during the period commencing on the later of (a) the consummation by the Company of its “Business Combination” or (b) one year from the Effective Date of the Registration Statement, and terminating on the four-year anniversary of the Effective Date. As used herein, the term “ Business Combination ” shall mean any acquisition by merger, capital stock exchange, asset or stock acquisition or other similar business combination consummated by the Company with one or more small- to mid-market U.S. and/or European based operating companies engaged in the delivery of Information Technology and Information Technology Enabled Services (ITES), Business Process Outsourcing (BPO) and/or Knowledge Process Outsourcing (KPO), whose operations are particularly suitable for offshoring to delivery centers located in countries such as India (as described more fully in the Registration Statement). The Company has the right to redeem the Warrants upon not less than thirty (30) days written notice at a price of $0.01 per Warrant at any time after the Warrants become exercisable; so long as the last sales price of the Company’s Common Stock has been at least $8.50 for any twenty (20) trading days within a thirty (30) trading day period ending on the third Business Day prior to the day on which notice is given. As used herein, the term “ Business Day ” shall mean any day other than a Saturday, Sunday or any day on which national banks in New York, New York are not open for business.

 

1.1.2                         Payment and Delivery .  Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York time, on the third Business Day following the Effective Date of the Registration Statement (or the fourth Business Day following the Effective Date, if the Registration Statement is declared effective after 4:30 p.m.) or at such earlier time as shall be agreed upon by the Representative and the Company at the offices of the Representative or at such other place as shall be agreed upon by the Representative and the Company.  The closing of the public offering contemplated by this Agreement is referred to herein as the “Closing” and the hour and date of delivery and payment for the Firm Units is referred to herein as the “ Closing Date .”  Payment for the Firm Units shall be made on the Closing Date at the Representative’s election by wire transfer in Federal (same day) funds or by certified or bank cashier’s check(s) in New York Clearing House funds. $35,100,000 ($40,363,000 if the Over-allotment Option (as defined in Section 1.2) is exercised in full), or approximately $5.85 per unit, of the proceeds received by the Company for the Firm Units, the Private Placement (as defined in Section 1.4) and the Sponsor Loan (as defined in Section 1.6 below) shall be deposited in the trust fund established by the Company for the benefit of the public stockholders and Maxim as described in the Registration Statement (the “ Trust Fund ”) pursuant to the terms of an Investment Management Trust Agreement (the “ Trust Agreement ”) which amount includes up to $720,000 ($0.12 per Firm Unit; $828,000 if the Over-allotment Option is exercised in full) payable to the Representative as contingent compensation upon consummation of a Business Combination.

 

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Any remaining proceeds (less commissions, expense allowance and actual expense payments or other fees payable pursuant to this Agreement) shall be paid to the order of the Company upon delivery to the Representative of certificates (in form and substance satisfactory to the Underwriters) representing the Firm Units (or through the facilities of the Depository Trust Company (the “ DTC ”)) for the account of the Underwriters.  The Firm Units shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two Business Days prior to the Closing Date.  The Company will permit the Representative to examine and package the Firm Units for delivery at least one full Business Day prior to the Closing Date.  The Company shall not be obligated to sell or deliver the Firm Units except upon tender of payment by the Representative for all the Firm Units.

 

1.2                                  Over-Allotment Option .

 

1.2.1                         Option Units .  For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Units, the Underwriters are hereby granted, severally and not jointly, an option to purchase up to an additional 900,000 units from the Company (the “ Over-allotment Option ”).  Such additional 900,000 units shall be identical in all respects to the Firm Units and are hereinafter referred to as “ Option Units .”  The Firm Units and the Option Units are hereinafter collectively referred to as the “ Units ,” and the Units, the shares of Common Stock and the Warrants included in the Units and the shares of Common Stock issuable upon exercise of the Warrants are hereinafter referred to collectively as the “ Public Securities .”  The purchase price to be paid for the Option Units (net of discounts and commissions) will be $5.64 per Option Unit ($.12 of which shall be deposited in the Trust Fund pursuant to Section 1.5). The Option Units are to be offered initially to the public at the offering price of $6.00 per Option Unit.

 

1.2.2                         Exercise of Option .  The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Units within 45 days after the Effective Date.  The Underwriters will not be under any obligation to purchase any Option Units prior to the exercise of the Over-allotment Option.  The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile transmission, setting forth the number of Option Units to be purchased and the date and time for delivery of and payment for the Option Units, which will not be later than five Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of the Representative or at such other place or in such other manner as shall be agreed upon by the Company and the Representative.  If such delivery and payment for the Option Units does not occur on the Closing Date, the date and time of the closing for such Option Units will be as set forth in the notice (hereinafter the “ Option Closing Date ”).  Upon exercise of the Over-allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Units specified in such notice.

 

1.2.3                         Payment and Delivery .  Payment for the Option Units shall be made on the Option Closing Date at the Representative’s election by wire transfer in Federal (same day)

 

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funds or by certified or bank cashier’s check(s) in New York Clearing House funds, by deposit of the sum of $5.64 per Option Unit ($.12 of which shall be deposited in the Trust Fund pursuant to Section 1.5) in the Trust Fund pursuant to the Trust Agreement upon delivery to the Representative of certificates (in form and substance satisfactory to the Underwriters) representing the Option Units (or through the facilities of DTC) for the account of the Underwriters.  The certificates representing the Option Units to be delivered will be in such denominations and registered in such names as the Representative requests not less than two Business Days prior to the Closing Date or the Option Closing Date, as the case may be, and will be made available to the Representative for inspection, checking and packaging at the aforesaid office of the Company’s transfer agent or correspondent not less than one full Business Day prior to such Closing Date or Option Closing Date.

 

1.3                                  Representative’s Shares .

 

1.3.2                         As additional consideration, the Company hereby agrees to issue to the Representative (and/or their designees) on the Effective Date 60,000 shares of Common Stock (“ Representative’s Shares ”, and collectively with the Public Securities, the “ Securities ”) to be delivered at the Closing. The Representative’s Shares shall be placed in escrow with the Transfer Agent (as defined below) and will only be released to the Representative upon the consummation of the Business Combination.

 

1.3.2                         The Representative’s Shares shall be entitled to registration rights identical to those of the Placement Securities (as defined below).

 

1.3.3                         The Representative agrees to vote the Representative’s Shares in accordance with the vote of a majority of the shares of Common Stock issued in the Offering and the Private Placement (as defined below).

 

1.3.4                         The Representative acknowledges that the holder of the Representative’s Shares shall have no liquidation rights will respect to such shares in the event the Company liquidates prior to the consummation of a business combination.

 

1.4                                  Private Placement to Officers and Directors and Designees . Prior to the Effective Date, certain officers and directors of the Company and their designees purchased from the Company pursuant to that certain Subscription Agreement (as defined in Section 2.23.2 hereof) an aggregate of 166,667 units identical to the Units (the “ Placement Units ”) at a purchase price of $6.00 per Placement Unit in a private placement effected pursuant to Regulation D under the Securities Act of 1933, as amended (the “ Act ” or “ Securities Act ”) that occurred immediately prior to the entering into of this Agreement (the “ Private Placement ”). The Placement Units, the shares of Common Stock and the Warrants included in the Placement Units (the “ Placement Warrants ”) and the shares of Common Stock issuable upon exercise of the Placement Warrants are hereinafter referred to collectively as the “ Placement Securities .”  There was no placement agent in the Private Placement and no party shall be entitled to a placement fee or expense allowance from the sale of the Placement Securities.

 

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1.5           Contingent Portion of Underwriters’ Discount . The Representative, on behalf of itself and the other Underwriters, agrees that 2.0% of the gross proceeds from the sale of the Firm Units ($720,000) and Option Units (an aggregate of $828,000 if the Over-allotment Option is exercised in full), (the “ Contingent Discount ”) will be deposited in and held in the Trust Fund and payable to the Representative, along with any interest accrued thereon (net of taxes payable), in respect of any IPO Shares (defined in Section 7.6 hereof) which are not redeemed pursuant to Section 7.6 hereof, upon the consummation of a Business Combination. The Representative, on behalf of itself and the other Underwriters, agrees that the several Underwriters shall forfeit any rights or claims to the Contingent Discount and any interest accrued thereon (net of taxes payable) in respect of any IPO Shares that are redeemed pursuant to Section 7.6 hereof. In addition, in the event the Company is unable to consummate a Business Combination and Continental Stock Transfer & Trust Company (“ CST ”), the trustee of the Trust Fund, commences liquidation of the Trust Fund as provided in the Trust Agreement, the Representative, on behalf of itself and the other Underwriters, agrees that (i) the several Underwriters shall forfeit any rights or claims to the Contingent Discount and any interest accrued thereon (net of taxes payable); and (ii) the Contingent Discount, together with the all other amounts on deposit in the Trust Fund, and any accrued interest thereon (net of taxes payable), shall be distributed on a pro-rata basis among the holders of the shares of Common Stock included in the Units sold in the Offering.

 

1.6           Loans. Prior to the Effective Date, Lotus Capital LLC, an existing stockholder of the Company which is majority owned by LM Singh (“ Lotus Capital ”), one of the Company’s sponsors and the Chief Financial Officer, Executive Vice President, Treasurer, Secretary and a Director of the Company, will loan the Company $500,000 ($579,000 if the over-allotment option is exercised in full) (the “ Sponsor Loan ”) pursuant to a promissory note (the “Sponsor Note” ) in the form attached as Exhibit 10.11 to the Registration Statement. The proceeds of the Sponsor Loan shall be deposited in the Trust Fund as provided in the Prospectus.

 

2.                                        Representations and Warranties of the Company .  The Company represents and warrants to the Underwriters as follows:

 

2.1                                  Filing of Registration Statement .

 

2.1.1                         Pursuant to the Act .  The Company has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement on Form S-1 (File No. 333-[            ]), including any related preliminary prospectus (the “ Preliminary Prospectus ”, including any prospectus that is included in the Registration Statement immediately prior to the effectiveness of the Registration Statement), for the registration of the Public Securities under the Act, which registration statement and amendment or amendments have been prepared by the Company in conformity with the requirements of the Act, and the rules and regulations (the “ Regulations ”) of the Commission under the Act.  The conditions for use of Form S-1 to register the Offering under the Act, as set forth in the General Instructions to such Form, have been satisfied. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement becomes effective (including the prospectus, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of such time pursuant to

 

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Rule 430A of the Regulations), is hereinafter called the “ Registration Statement ,” and the form of the final prospectus dated the Effective Date included in the Registration Statement (or, if applicable, the form of final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A of the Regulations filed with the Commission pursuant to Rule 424 of the Regulations), is hereinafter called the “ Prospectus .”  For purposes of this Agreement, “ Time of Sale ”, as used in the Act, means 5:00 p.m., New York City time, on the date of this Agreement. Prior to the Time of Sale, the Company prepared a preliminary prospectus, dated [        ], 2006, for distribution by the Underwriters (the “ Sale Preliminary Prospectus ”). If the Company has filed, or is required pursuant to the terms hereof to file, a registration statement pursuant to Rule 462(b) under the Securities Act registering additional Securities (a “ Rule 462(b) Registration Statement ”), then, unless otherwise specified, any reference herein to the term “ Registration Statement ” shall be deemed to include such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other document with respect to the Registration Statement has heretofore been filed with the Commission. All of the Public Securities have been registered under the Securities Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement is filed, will be duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement. The Registration Statement has been declared effective by the Commission on the date hereof. If, subsequent to the date of this Agreement, the Company or the Representative has determined that at the Time of Sale the Sale Preliminary Prospectus included an untrue statement of a material fact or omitted a statement of material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and have agreed to provide an opportunity to purchasers of the Firm Units to terminate their old purchase contracts and enter into new purchase contracts, then the Sale Preliminary Prospectus will be deemed to include any additional information available to purchasers at the time of entry into the first such new purchase contract.

 

2.1.2                         Pursuant to the Exchange Act .  The Company has filed with the Commission a Form 8-A (File Number 000-[     ]) providing for the registration under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), of the Units, the Common Stock and the Warrants.  The registration of the Units, Common Stock and Warrants under the Exchange Act has been declared effective by the Commission on the date hereof.

 

2.2                                  No Stop Orders, Etc.   Neither the Commission nor 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.

 

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2.3                                  Disclosures in Registration Statement .

 

2.3.1                         10b-5 Representation .  At the time the Registration Statement, or any post effective amendment to the Registration Statement, became effective, upon the filing or first use (within the meaning of the Regulations) of the Prospectus and at all times subsequent thereto up to the Closing Date and the Option Closing Date, if any, the Registration Statement and the Prospectus contained or will contain all material statements that are required to be stated therein in accordance with the Act and the Regulations, and did or will in all material respects conform to the requirements of the Act and the Regulations. Neither the Registration Statement nor any Preliminary Prospectus or the Prospectus, nor any amendment or supplement thereto, on their respective dates, nor the Sale Preliminary Prospectus, did or will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Preliminary Prospectus, the Sale Preliminary Prospectus and the Prospectus, in light of the circumstances under which they were made), not misleading.  When any Preliminary Prospectus was first filed with the Commission (whether filed as part of the Registration Statement for the registration of the Securities or any amendment thereto or pursuant to Rule 424(a) of the Regulations) or first used (within the meaning of the Regulations) and when any amendment thereof or supplement thereto was first filed with the Commission or first used (within the meaning of the Regulations), such Preliminary Prospectus and any amendments thereof and supplements thereto complied or will have been corrected in the Sale Preliminary Prospectus and the Prospectus to comply in all material respects with the applicable provisions of the Act and the Regulations and did not and will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The representation and warranty made in this Section 2.3.1 does not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Sale Preliminary Prospectus or Prospectus or any amendment thereof or supplement thereto, which information, it is agreed, shall consist solely of the names of the several Underwriters and the subsections captioned “ Pricing of Securities” and “ Foreign Regulatory Restrictions on Purchase of the Units” contained in the section of the Prospectus entitled “Underwriting.”

 

2.3.2                         Disclosure of Agreements .  The agreements and documents described in the Registration Statement, the Sale Preliminary Prospectus 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, the Sale Preliminary Prospectus 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 Registration Statement, Preliminary Prospectus or the Prospectus or attached as an exhibit thereto, or (ii) is material to the Company’s business, has been duly and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as

 

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enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and none of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in breach or default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a breach or default thereunder.  To the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

 

2.3.3                         Prior Securities Transactions .  No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company since the date of the Company’s formation, except as disclosed in the Registration Statement.

 

2.3.4                         Regulations .  The disclosures in the Registration Statement, the Preliminary Prospectus 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 necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

2.4                                  Changes After Dates in Registration Statement .

 

2.4.1                         No Material Adverse Change .  Except as contemplated in the Prospectus, since the respective dates as of which information is given in the Registration Statement, any Preliminary Prospectus 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; (iii) no member of the Company’s board of directors or management has resigned from any position with the Company and (iv) no event or occurrence has taken place which materially impairs, or would likely materially impair, with the passage of time, the ability of the members of the Company’s board of directors or management to act in their capacities with the Company as described in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus.

 

2.4.2                         Recent Securities Transactions, Etc.   Except as contemplated in the Prospectus, 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 capital stock.

 

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2.5                                  Independent Accountants .  Goldstein Golub Kessler LLP (“GGK”), whose report is filed with the Commission as part of the Registration Statement and included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, are independent registered public accountants as required by the Act and the Regulations and the Public Company Accounting Oversight Board (including the rules and regulations promulgated by such entity, the “ PCAOB ”). GGK is duly registered and in good standing with the PCAOB. GGK has not, during the periods covered by the financial statements included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

 

2.6                                  Financial Statements; Statistical Data .

 

2.6.1                         Financial Statements . The financial statements, including the notes thereto and supporting schedules included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus fairly present the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with generally accepted accounting principles, consistently applied throughout the periods involved; and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein.  No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Sale Preliminary Prospectus or the Prospectus. The Registration Statement, the Sale Preliminary Prospectus and the Prospectus disclose all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus in accordance with Regulation S-X which have not been included as so required.

 

2.6.2                         Statistical Data . The statistical, industry-related and market-related data included in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.

 

2.7                                  Authorized Capital; Options, Etc.   The Company had at the date or dates indicated in each of the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, as the case may be, duly authorized, issued and outstanding capitalization as set forth in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus.  Based on the assumptions stated in the Registration Statement, the Sale Preliminary Prospectus 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, the Sale Preliminary Prospectus and the Prospectus, on the Effective Date of the Prospectus and on the Closing Date and the Option Closing Date, if any, there will be no options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common Stock of

 

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the Company or any security convertible into shares of Common Stock of the Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.

 

2.8                                  Valid Issuance of Securities, Etc.

 

2.8.1                         Outstanding Securities .  All issued and outstanding securities of the Company (including, without limitation, the Placement Securities) have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.  The Public Securities conform to all statements relating thereto contained in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus. Subject to the disclosure contained in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus with respect to the Placement Securities, the offers and sales of the outstanding Common Stock were at all relevant times either registered under the Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers of such shares of Common Stock, exempt from such registration requirements.

 

2.8.2                         Securities Sold Pursuant to this Agreement .  The Securities have been duly authorized and reserved for issuance and when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Securities has been duly and validly taken.  The Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus, as the case may be.  When issued, 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 Warrants are enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. The shares of Common Stock issuable upon exercise of the Warrants have been reserved for issuance upon the exercise of the Warrants, and when issued in accordance with the terms of such securities, will be duly and validly authorized, validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders.

 

2.8.3                         Placement Warrants . The Placement Warrants constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof and payment of the

 

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respective exercise prices therefor, the number and type of securities of the Company called for thereby in accordance with the terms thereof, and such Placement Warrants are enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. The shares of Common Stock issuable upon exercise of the Placement Warrants have been reserved for issuance upon the exercise of the Placement Warrants and, when issued in accordance with the terms of the Placement Warrants, will be duly and validly authorized, validly issued, fully paid and non-assessable, and the holders thereof are not and will not be subject to personal liability by reason of being such holders.

 

2.8.4                         No Integration . Neither the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Act or the Regulations with the offer and sale of the Public Securities pursuant to the Registration Statement.

 

2.9                                  Registration Rights of Third Parties .  Except as set forth in the Registration Statement, the Sale Preliminary Prospectus or the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Act or to include any such securities in a registration statement to be filed by the Company.

 

2.10                            Validity and Binding Effect of Agreements .  This Agreement, the Sponsor Note, the Warrant Agreement (as defined in Section 2.22 hereof), the Trust Agreement, the Services Agreement (as defined in Section 3.7.2 hereof), the Subscription Agreement (as defined in Section 2.23.2 hereof) and the Escrow Agreement (as defined in Section 2.23.3 hereof) have been duly and validly authorized by the Company and constitute valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

 

2.11                            No Conflicts, Etc.   The execution, delivery and performance by the Company of this Agreement, the Warrant Agreement, the Trust Agreement, the Service Agreement, the Subscription Agreement, the Sponsor Note 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

 

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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; (ii) result in any violation of the provisions of the Amended and Restated Certificate of Incorporation or the By-Laws of the Company; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties or business.

 

2.12                            No Defaults; Violations .  No material default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its Amended and Restated Certificate of Incorporation or Bylaws or in violation of any material franchise, license, permit, applicable law, rule, regulation, judgment or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties or businesses.

 

2.13                            Corporate Power; Licenses; Consents.

 

2.13.1                   Conduct of Business .  The Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business for the purposes described in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus.  The disclosures in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus concerning the effects of federal, state and local regulation on this Offering and the Company’s business purpose as currently contemplated are correct in all material respects and do not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since its formation, the Company has conducted no business and has incurred no liabilities other than in connection with and in furtherance of the Offering.

 

2.13.2                   Transactions Contemplated Herein .  The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.  No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery, of the Securities and the consummation of the transactions and agreements contemplated by this Agreement, the Warrant Agreement, the Sponsor Loan, the Trust Agreement, the Services Agreement, the Subscription Agreement and the Escrow Agreement and as contemplated by the Sale Preliminary Prospectus and Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations promulgated by the National Association of Securities Dealers, Inc. (the “NASD” ).

 

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2.14                            D&O Questionnaires .  All information contained in the questionnaires (the “ Questionnaires ”) completed by each of (i) the Company’s officers and directors immediately prior to the Offering (the “Directors/Officers” ) and (ii) those persons listed in the Registration Statement as a special advisor (collectively, the “ Special Advisors ”), and provided to the Underwriters, as well as the biographies attached as an exhibit to his or her Insider Letter (as defined in Section 2.23.1) is true and correct and the Company has not become aware of any information which would cause the information disclosed in the questionnaires completed by the Directors/Officers or Special Advisors to become inaccurate and incorrect.

 

2.15                            Litigation; Governmental Proceedings .  There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the best of the Company’s knowledge, threatened against, or involving the Company or, to the best of the Company’s knowledge, any Director/Officer or any Special Advisor which has not been disclosed in the Registration Statement, the Questionnaires, the Sale Preliminary Prospectus and the Prospectus.

 

2.16                            Good Standing .  The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws of its state of incorporation and is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on the Company, its business, assets or operations.

 

2.17                            No Contemplation of a Business Combination . Prior to the date hereof, none of the Company, any Director/Officer or any Special Advisor had, and as of the Closing, the Company and such Director/Officers, Special Advisors and Initial Stockholders will not have had: (a) any specific Business Combination under consideration or contemplation or (b) any substantive interactions or discussions with any target business regarding a possible Business Combination.

 

2.18                            Transactions Affecting Disclosure to NASD .

 

2.18.1                   Except as described in the Sale Preliminary Prospectus 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 Director/Officer, Special Advisor with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any stockholders of the Company immediately prior to the Offering (the “Initial Stockholders” ) that may affect the Underwriters’ compensation, as determined by the NASD.

 

2.18.2                   The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any NASD member; or (iii) any person or entity that has any direct or indirect affiliation or association with any NASD member, within the twelve months prior to the Effective Date, other than payments to Maxim.

 

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2.18.3                   No officer, director, or beneficial owner of any class of the Company’s securities, including, without limitation, holders of securities purchased in the Private Placement, whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived (any such individual or entity, a “ Company Affiliate ”), is a member, a person associated, or affiliated with a member of the NASD.

 

2.18.4                   No Company Affiliate is an owner of stock or other securities of any member of the NASD (other than securities purchased on the open market).

 

2.18.5                   No Company Affiliate has made a subordinated loan to any member of the NASD.

 

2.18.6                   No proceeds from the sale of the Public Securities (excluding underwriting compensation) or the Placement Securities will be paid to any NASD member, or any persons associated or affiliated with a member of the NASD, except as specifically authorized herein and in the Subscription Agreement.

 

2.18.7                   Except with respect to Maxim, the Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a potential underwriter in the Offering or a related person (as defined by NASD rules) of such an underwriter within the 180-day period prior to the initial filing date of the Registration Statement.

 

2.18.8                   No person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of the NASD.

 

2.18.9                   No NASD member intending to participate in the Offering has a conflict of interest with the Company. For this purpose, a “conflict of interest” exists when a member of the NASD and its associated persons, parent or affiliates in the aggregate beneficially own 10% or more of the Company’s outstanding subordinated debt or common equity, or 10% or more of the Company’s preferred equity. “Members participating in the Offering” include managing agents, syndicate group members and all dealers which are members of the NASD.

 

2.18.10             Except with respect to Maxim in connection with the Offering, the Company has not entered into any agreement or arrangement (including, without limitation, any consulting agreement or any other type of agreement) during the 180-day period prior to the initial filing date of the Registration Statement, which arrangement or agreement provides for the receipt of any item of value and/or the transfer or issuance of any warrants, options, or other securities from the Company to an NASD member, any person associated with a member (as defined by NASD rules), any potential underwriters in the Offering and any related persons.

 

2.19                            Foreign Corrupt Practices Act .  None of the Company, any Director/Officer, any Special Advisor 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

 

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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 Company or the assets, business or operations of the Company as reflected in any of the financial statements contained in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company.  The Company’s internal accounting controls and procedures are sufficient to cause the Company to comply with the Foreign Corrupt Practices Act of 1977, as amended.

 

2.20                            Patriot Act . None of the Company, any Director/Officer or any Special Advisor has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, or (iii) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law.

 

2.21                            Officers’ Certificate .  Any certificate signed by any duly authorized officer of the Company and delivered to Representative or Representative’s counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

 

2.22                            Warrant Agreement .  The Company has entered into a warrant agreement with respect to the Warrants and the Placement Warrants with CST substantially in the form filed as an exhibit to the Registration Statement (the “ Warrant Agreement ”), providing for, among other things, the payment of a warrant solicitation fee as contemplated by Section 3.9 hereof.

 

2.23                            Agreements With Company Affiliates .

 

2.23.1                   Insider Letters .  The Company has caused to be duly executed legally binding and enforceable agreements (except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (ii) as enforceability of any indemnification, contribution or noncompete provision may be limited under the federal and state securities laws, and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought) annexed as Exhibits to the Registration Statement (the “ Insider Letter ”), pursuant to which each of the Directors/Officers and Initial Stockholders of the Company agree to certain matters, including but not limited to, certain matters described as being agreed to by them under the “Proposed Business” Section of the Prospectus.

 

2.23.2                   Subscription Agreement . Certain of the Company’s officers and directors and their designees have executed and delivered an agreement, annexed as an exhibit to the

 

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Registration Statement (the “ Subscription Agreement ”), pursuant to which such persons, among other things, have purchased an aggregate of 166,667 Placement Units in the Private Placement. Pursuant to the Subscription Agreement, (i) $1,000,00 of the proceeds from the sale of the Placement Units will be deposited by the Company in the Trust Fund in accordance with the terms of the Trust Agreement prior to the Closing, and (ii) the purchasers of the Placement Units have waived any and all rights and claims they may have to any proceeds, and any interest thereon, held in the Trust in respect of the shares of Common Stock included in such Placement Units in the event a Business Combination is not consummated and the Trust Fund is liquidated in accordance with the terms of the Trust Agreement.

 

2.23.3                   Escrow Agreement .  The Company has caused the Directors/Officers and Initial Stockholders to enter into an escrow agreement (the “ Escrow Agreement ”) with CST (the “ Escrow Agent ”) substantially in the form filed as an exhibit to the Registration Statement whereby the Common Stock owned by such parties (including any shares of Common Stock included in the Placement Units which any of them may have purchased) will be held in escrow by the Escrow Agent, until the earlier of (i) the third anniversary of the Effective Date or (ii) the one year anniversary of a Business Combination.  During such escrow period, such parties shall be prohibited from selling or otherwise transferring such shares (except (a) to spouses and children of such parties and trusts established for their benefit, (b) after a Business Combination in a transaction whereby all the outstanding shares of the Company are exchanged or converted into cash or another entity’s securities and (c) as otherwise set forth in the Escrow Agreement) unless approved by the Company’s public stockholders, but will retain the right to vote such shares.  The Escrow Agreement shall not be amended, modified or otherwise changed without the prior written consent of Maxim, such consent not to be unreasonably withheld.

 

2.24                            Investment Management Trust Agreement .  The Company has entered into the Trust Agreement with respect to certain proceeds of the Offering substantially in the form filed as an exhibit to the Registration Statement.

 

2.25                            Covenants Not to Compete .  No Director/Officer, Special Advisor or Initial Stockholder of the Company is subject to any noncompetition agreement or non-solicitation agreement with any employer or prior employer which could materially affect his ability to be a Director/Officer, Special Advisor or Initial Stockholder or employee of the Company.

 

2.26                            Investments .  No more than 45% of the “value” (as defined in Section 2(a)(41) of the Investment Company Act of 1940 (“Investment Company Act”)) of the Company’s total assets consist of, and no more than 45% of the Company’s net income after taxes is derived from, securities other than “Government Securities” (as defined in Section 2(a)(16) of the Investment Company Act).

 

2.27                            Subsidiaries .  The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other business entity.

 

2.28                            Related Party Transactions .  No relationship, direct or indirect, exists between or among any of the Company or any Company Affiliate, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Company Affiliate, on the other hand,

 

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which is required by the Act, the Exchange Act or the Regulations to be described in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus which is not so described and described as required. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the Directors/Officers or Initial Stockholders or any of their respective family members, except as disclosed in the Registration Statement, the Sale Preliminary Prospectus and the Prospectus. The Company has not extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or officer of the Company.

 

2.29                            No Influence . The Company has not offered, or caused the Underwriters to offer, the Firm Units to any person or entity with the intention of unlawfully influencing: (a) a customer or supplier of the Company or any Company Affiliate to alter the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication to write or publish favorable information about the Company or any such affiliate.

 

2.30                            Definition of “Knowledge” . As used in herein, the term “ knowledge of the Company ” (or similar language) shall mean the knowledge of the officers and directors of the Company who are named in the Prospectus, with the assumption that such officers and directors shall have made reasonable and diligent inquiry of the matters presented.

 

2.31                            Sarbanes-Oxley . The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or self regulatory entity or agency, that are applicable to it as of the date hereof.

 

2.32                            Quotation of the Public Securities on Bulletin Board . As of the Effective Date, the Public Securities have been authorized for quotation on the OTC Bulletin Board (“ OTCBB ”) and, to the Company’s knowledge, no proceedings have been instituted or threatened which would effect, and no event or circumstance has occurred as of the Effective Date which is reasonably likely to effect, the listing of the Public Securities on the OTCBB.

 

3.                                        Covenants of the Company .  The Company covenants and agrees as follows:

 

3.1                                  Amendments to Registration Statement .  The Company will deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.

 

3.2                                  Federal Securities Laws .

 

3.2.1                         Compliance .  During the time when a Prospectus is required to be delivered under the Act, the Company will use all reasonable efforts to comply with all requirements imposed upon it by the Act, the Regulations and the Exchange Act and by the regulations under the Exchange Act, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Public Securities in accordance with the provisions

 

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hereof and the Prospectus.  If at any time when a Prospectus relating to the Public Securities is required to be delivered under the Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Sale Preliminary Prospectus and 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 during such period to amend the Registration Statement or amend or supplement the Sale Preliminary Prospectus and Prospectus to comply with the Act, the Company will notify the Representative promptly and prepare and file with the Commission, subject to Section 3.1 hereof, an appropriate amendment to the Registration Statement or amendment or supplement to the Sale Preliminary Prospectus and Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

 

3.2.2                         Filing of Final Prospectus .  The Company will file the Prospectus (in form and substance satisfactory to the Representative) with the Commission pursuant to the requirements of Rule 424 of the Regulations.

 

3.2.3                         Exchange Act Registration .  For a period of five years from the Effective Date, or until such earlier time upon which the Company is required to be liquidated, the Company will use its best efforts to maintain the registration of the Units, Common Stock and Warrants under the provisions of the Exchange Act.  The Company will not deregister the Units under the Exchange Act without the prior written consent of Maxim.

 

3.2.4                         Sarbanes-Oxley Compliance . As soon as it is legally required to do so, the Company shall take all actions necessary to obtain and thereafter maintain material compliance with each applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or self regulatory entity or agency with jurisdiction over the Company.

 

3.3                                  Blue Sky Filing .  The Company will endeavor in good faith, in cooperation with the Representative, at or prior to the time the Registration Statement becomes effective, to qualify the Public Securities for offering and sale under the securities laws of such jurisdictions as the Representative may reasonably designate, provided that no such qualification shall be required in any jurisdiction where, as a result thereof, the Company would be subject to service of general process or to taxation as a foreign corporation doing business in such jurisdiction.  In each jurisdiction where such qualification shall be effected, the Company will, unless the Representative agrees that such action is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or reports at such times as are or may be required by the laws of such jurisdiction.

 

3.4                                  Delivery to Underwriters of Prospectuses .  The Company will deliver to each of the several Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Act or the Exchange Act such number of copies of each Sale Preliminary Prospectus and Prospectus and all amendments and supplements to such documents as such Underwriters may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to Representative

 

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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 Representative .  The Company will use its best efforts to cause the Registration Statement to remain effective and will notify the Representative 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 suspending the effectiveness of the Registration Statement, or any post-effective amendment thereto or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the 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 or its counsel, makes any statement of a material fact made in the Registration Statement, the Sale Preliminary Prospectus and/or the Prospectus untrue or that requires the making of any changes in the Registration Statement, the Sale Preliminary Prospectus and/or the Prospectus in order to make the statements therein, (with respect to the Prospectus and Sale Preliminary Prospectus in light of the circumstances under which they were made), not misleading.  If the Commission or