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Exhibit 1.1
40,000,000
Units
UNITED REFINING ENERGY
CORP.
UNDERWRITING
AGREEMENT
New York, New York
, 2007
Maxim Group LLC
405 Lexington Avenue
New York, NY 10174
As Representative of the
Underwriters
named on Schedule A
hereto
Ladies and Gentlemen:
The undersigned, United
Refining Energy Corp., a Delaware corporation (“
Company ”), hereby confirms its agreement with Maxim
Group LLC (“ Maxim ”, hereinafter referred to as
“ you ” or the “ Representative
”) and with the other underwriters named on
Schedule A hereto for which you are acting as
representative (the Representative and the other underwriters being
collectively referred to herein as the “ Underwriters
” or, individually, an “ Underwriter ”) as
follows:
1. Purchase and Sale of
Securities .
1.1. 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, severally and not
jointly, to the several Underwriters, an aggregate of 40,000,000
units (the “ Firm Units ”) of the
Company’s securities at a purchase price (net of discounts
and commissions) of $9.40 per Firm Unit. The Underwriters,
severally and not jointly, agree to purchase from the Company the
number of Firm Units set forth opposite their respective names on
Schedule A attached hereto and made a part hereof at a
purchase price (net of discounts and commissions) of $9.40 per Firm
Unit. The Firm Units are to be offered initially to the public
(the “ Offering ”) at the offering price of
$10.00 per Firm Unit. Each Firm Unit consists of one share of
the Company’s common stock, par value $0.0001 per share (the
“ Common Stock ”), and one warrant to purchase
one share of Common Stock (the “ Warrant(s)
”). The shares of Common Stock and the Warrants included
in the Firm Units will begin separate trading five Business Days
(as defined below) following the earlier to occur of the expiration
of the Underwriters’ Over-allotment Option (as defined in
Section 1.2 hereof) or its exercise in full, subject to the
Company filing a Current Report on Form 8-K with the Commission (as
defined in Section 2.1.1 hereof) containing an audited balance
sheet reflecting
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the Company’s receipt
of the gross proceeds of the Offering (the “ Current
Report on Form 8-K ”) and issuing a press release
announcing when such separate trading will begin. The Company will
file the Current Report on Form 8-K upon the completion of the
Offering, which is anticipated to take place three Business Days
following the date of the Prospectus (as defined in
Section 2.1.1 hereof). The audited balance sheet will include
proceeds the Company receives from the exercise of the
Over-allotment Option, if the Over-allotment Option is exercised
prior to the filing of the Current Report on Form 8-K. Each Warrant
entitles its holder to purchase one share of Common Stock for $7.50
per share during the period commencing on the later of:
(a) the consummation by the Company of its Business
Combination (as defined below) or (b) one year from the
effective date (the “ Effective Date ”) of the
Registration Statement (as defined in Section 2.1.1 hereof),
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 acquisition, stock purchase or other similar
business combination consummated by the Company
(as described more fully in the Registration Statement). The
Company has the right to redeem the Warrants (and the
Representative’ Warrants but only upon exercise of the
Representative’ Unit Purchase Option (each as defined below))
upon not less than 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 Common Stock has been at least
$14.25 per share for any 20 trading days within a 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 City 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., New
York City time) or at such earlier time as shall be agreed upon by
the Representative and the Company at the offices of Lowenstein
Sandler PC, 1251 Avenue of the Americas, New York, New York 10020
(“ Lowenstein’s Offices ”) or at such
other place as shall be agreed upon by the Representative and the
Company. The closing of the Offering 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 by wire transfer in federal (same day)
funds 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 Company shall deposit $
($
if the Over-allotment Option is exercised in full), or
approximately $
per Unit (or $
if the Over-allotment Option is exercised in full), of the proceeds
received by it for the Firm Units and the Private Placement (as
defined in Section 1.4 hereof) in the trust account
established by it for the benefit of the public stockholders and
the Representative 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 $
($
per Firm Unit) or up to $
if the Over-allotment Option is exercised in full, payable to the
Representative as contingent compensation upon consummation of a
Business Combination. 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
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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 purpose 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 6,000,000 Units from the
Company (the “ Over-allotment Option
”). Such additional 6,000,000 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 $9.40 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
Lowenstein’s Offices or at such other place or in such other
manner as shall be agreed upon by the Company and the
Representative. If such delivery of 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. If any Option Units are to
be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Option Units (subject to such adjustments
to eliminate fractional Units as the Underwriters may determine)
that bears the same proportion to the total number of Option Units
to be purchased as the number of Firm Units set forth in
Schedule A opposite the name of such Underwriter bears to
the total number of Firm Units.
1.2.3. Payment and
Delivery . Payment for the Option Units shall be made on
the Closing Date or any Option Closing Date by wire transfer in
federal (same day) funds 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 Company
shall deposit the sum of $
per Option Unit ($
of which shall be deposited in the Trust Fund pursuant to
Section 1.5) in the Trust Fund pursuant to the Trust
Agreement. The certificates representing the Option Units to be
delivered will be in such denominations and registered in such
names as the Representative request not less than two
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Business Days prior to the
Closing Date or any 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
Purchase Option .
1.3.1. Purchase Option
. As additional consideration, the Company hereby agrees to
issue and sell to the Representative (and/or their respective
designees) on the Effective Date an option (“
Representative’s Purchase Option ”) for the
purchase of an aggregate of
Units (the “ Representative’s Units ”) for
an aggregate purchase price of $100.00. The
Representative’s Purchase Option shall be exercisable, in
whole or in part, commencing on the later of the consummation of a
Business Combination or one year from the Effective Date and
expiring on the five-year anniversary of the Effective Date at an
initial exercise price per Representative’s Unit of $11.00,
which is equal to one hundred and ten percent (110%) of the
initial public offering price of a Unit. The
Representative’s Purchase Option, the Representative’s
Units, the shares of Common Stock and the Warrants included in the
Representative’s Units (the “ Representative’s
Warrants ”) and the shares of Common Stock issuable upon
exercise of the Representative’s Warrants are hereinafter
referred to collectively as the “ Representative’s
Securities .” The Public Securities and the
Representative’s Securities are hereinafter referred to
collectively as the “ Securities .”
Representative understand and agree that there are significant
restrictions against transferring the Representative’s
Purchase Option during the first year after the Effective Date, as
set forth in Section 3 of the Representative’ Purchase
Option.
1.3.2. Delivery and
Payment . Delivery of and payment for the
Representative’ Purchase Option shall be made on the Closing
Date. The Company shall deliver to the Representative and
their respective designees upon payment therefor certificates for
the Representative’ Purchase Option in the name or names and
in such authorized denominations as the Representative may
request.
1.4. Private Placement
. Prior to the Effective Date, United Refining, Inc., a
company, an entity indirectly controlled by the Company’s
Chairman and Chief Executive Officer (the “ Sponsor
”), purchased from the Company pursuant to that certain
Subscription Agreement (as defined in Section 2.23.2 hereof)
an aggregate of
warrants identical to the Warrants comprising part of the Units
(the “ Placement Warrants ”) at a purchase price
of $
per Placement Warrant 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 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 Warrants.
1.5. Contingent Portion of
Underwriters’ Discount . The Representative[, on behalf
of itself and the other Underwriters,] agrees that 3.0% of the
gross proceeds from the sale of the Firm Units ($
) and 3.0% of the gross proceeds from the sale of the Option
Units (an
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aggregate of $
if the Over-allotment Option is exercised in full) (collectively,
the “ Contingent Discount ”) will be delivered
to the Company for deposit in the Trust Fund. The parties hereto
agree that such amounts shall remain payable to the Representative,
along with any interest accrued thereon, in respect of any IPO
Shares (as 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) [on a pro-rata
basis], 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], agree 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.
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 included therein or
in any amendment thereto prior to the effectiveness thereof (the
“ Preliminary Prospectus ”), 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. Such registration statement, as amended, on file with
the Commission at the time the registration statement becomes
effective (including the prospectus, financial statements,
schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part
thereof as of such time pursuant to Rule 430A of the Regulations)
is hereinafter called the “ Registration Statement
,” and the form of the final prospectus dated the Effective
Date included in the Registration Statement (or, if applicable, the
form of final prospectus containing information permitted to be
omitted therefrom 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
, 2007, for distribution by the Underwriters to prospective
investors (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
5
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 and the Representative have 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 in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading and have agreed in writing 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
the Prospectus or the effectiveness of the Registration Statement
or has instituted or, to the best of the Company’s knowledge,
threatened to institute any proceedings with respect to such an
order.
2.3. Disclosures in
Registration Statement .
2.3.1. Disclosure
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 (including the Sale Preliminary Prospectus)
or the Prospectus, nor, in each case, any amendment thereof or
supplement thereto, on their respective dates, did, 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 the case of any 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
6
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, does 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” (first paragraph only)
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 in all material respects 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 or financial condition or results has been
duly and validly executed by the Company, is in full force and
effect in all material respects and is enforceable against the
Company and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state
securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought, and none
of such agreements or instruments have 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 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
offered or 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 except as disclosed in the
Registration Statement, the Sale Preliminary Prospectus and the
Prospectus.
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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
and financial condition and results as currently contemplated
fairly summarize 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 stated in the Registration Statement,
the Sale Preliminary Prospectus and the Prospectus, since the
respective dates as of which information is given therein:
(i) there has been no material adverse change in the
condition, financial or otherwise, results of operations, business
or 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 stated in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus,
subsequent to the respective dates as of which information is given
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.
2.5. Independent
Accountants . BDO Siedman, LLP (“ BDO
”), 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 ”). To the best of the
Company’s knowledge, BDO is duly registered and in good
standing with the PCAOB. BDO 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, cash flows and the results
of operations of the Company at the dates and for the periods to
which they apply; such financial statements have been prepared in
conformity with generally accepted accounting principles,
consistently applied throughout the periods involved; and such
supporting schedules present
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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 or the Prospectus in accordance with Regulation S-X
which have not been included as so required.
2.6.2. Statistical
Data . The statistical, industry-related and market-related
data included in the Registration Statement, the 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 date of this
Agreement and on the Closing Date and the Option Closing Date, if
any, there will be no options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares
of Common Stock of the Company or any security convertible into, or
exchangeable or exercisable for, 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
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. Such securities conform to all statements
relating thereto contained in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus. The offers and sales of
the outstanding shares of 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.
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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
Representative’s Purchase Option, the Representative’s
Warrants and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof
and payment of the respective exercise prices therefor, the number
and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s
Purchase Option, the Representative’s Warrants and the
Warrants are enforceable against the Company in accordance with
their respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may
be limited under 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 Representative’s Purchase Option,
the Representative’s Warrants and the Warrants, respectively,
have been reserved for issuance upon the exercise of the
Representative’s Warrants or the Warrants, as applicable, and
when issued in accordance with the terms thereof, 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.
2.8.3. Placement
Warrants . The Placement Warrants constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof
and payment of the respective exercise prices therefor, the number
and type of securities of the Company called for thereby in
accordance with the terms thereof, and such Placement Warrants are
enforceable against the Company in accordance with their respective
terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under
federal and state securities laws; and (iii) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. The shares of Common Stock issuable upon exercise of the
Placement Warrants have been reserved for issuance upon the
exercise of the Placement Warrants and, when issued in accordance
with the terms of the Placement Warrants, will be duly and validly
authorized, validly issued, fully paid and non-assessable, and the
holders thereof are not and will not be subject to personal
liability by reason of being such holders.
2.8.4. No Integration
. Neither the Company nor any of its affiliates has 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.
10
2.9. Registration Rights
of Third Parties . Except as set forth in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, no
holders of any securities of the Company or any rights exercisable
for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such
securities of the Company under the Act or to include any such
securities in a registration statement to be filed by the
Company.
2.10. Validity and Binding
Effect of Agreements . This Agreement, the Warrant
Agreement (as defined in Section 2.22 hereof),
Representative’s Purchase Option, the Trust Agreement, the
Service 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,
Representative’s Purchase Option, the Trust Agreement, the
Service Agreement, the Subscription Agreement and the Escrow
Agreement, the consummation by the Company of the transactions
herein and therein contemplated (including the issuance of the
Securities) 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; (ii) result in
any violation of the provisions of the Amended and Restated
Certificate of Incorporation (the “ Certificate of
Incorporation ”) or the bylaws (“ 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 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.
11
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 as
described in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus.
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 has obtained all consents,
authorizations, approvals and orders required in connection
therewith. 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 as contemplated
by this Agreement, the Warrant Agreement, Representative’s
Purchase Option, the Trust Agreement, the Service Agreement, the
Subscription Agreement and the Escrow Agreement and as contemplated
by the Sale Preliminary Prospectus and Prospectus, except those
obtained or made under applicable federal and state securities laws
and the rules and regulations promulgated by the National
Association of Securities Dealers, Inc. (the “ NASD
”).
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 hereof) is to the best of the Company’s
knowledge true and correct and the Company is not aware that any
information disclosed in the questionnaires completed by the
Directors/Officers or Special Advisors is inaccurate or
incomplete.
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
12
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 or its business, assets, operations or
financial condition or results.
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, or as of
the Closing, the Company and such Director/Officers, Special
Advisors and Initial Stockholders will have had: (a) any
specific Business Combination under consideration; or (b) any
substantive interactions or discussions with any target regarding a
possible Business Combination.
2.18. Transactions
Affecting Disclosure to NASD .
2.18.1. Except as described
in the Registration Statement, 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
the payment of $25,000 to Maxim.
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 or the Placement Warrants will be
paid to any NASD member, or any persons associated or affiliated
with a member of the NASD, except as specifically authorized
herein.
2.18.7. Except with respect
to the Representative, 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.
13
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 the Representative 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 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 .
Neither of the Company nor, to the Company’s knowledge, any
Director/Officer or any Special Advisor or any other person acting
on behalf of the Company 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.
14
2.21. Officers’
Certificate . Any certificate signed by any duly
authorized officer of the Company and delivered to Representative
or Representative’ 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, Representative’s
Warrants and the Placement Warrants with CST substantially in the
form filed as an exhibit to the Registration Statement (the “
Warrant Agreement ”).
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 Registration
Statement, the Sale Preliminary Prospectus and the
Prospectus.
2.23.2. Subscription
Agreement . The Sponsor has executed and delivered a
subscription agreement, annexed as an exhibit to the Registration
Statement (the “ Subscription Agreement ”),
pursuant to which the Sponsor, among other things, has purchased an
aggregate of
Placement Warrants in the Private Placement. Pursuant to the
Subscription Agreement, (i) $
of the proceeds from the sale of the Placement Warrants 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 Sponsor has waived any and all rights and claims it
may have to any proceeds, and any interest thereon, held in the
Trust Fund in respect of the Placement Securities 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 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
15
Agreement shall not be
amended, modified or otherwise changed without the prior written
consent of the Representative, 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 and the Private Placement 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, any Company Affiliate or any Underwriter,
on the other hand, 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 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 Registration Statement, the Sale Preliminary
Prospectus or 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
16
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. AMEX Rules . As
of the effective date of the Registration Statement, the
Company’s Board of Directors shall have validly appointed an
audit committee and nominating committee whose composition
satisfies the requirements of the rules and regulations of the
American Stock Exchange (“ AMEX ”) and the Board
of Directors and/or audit committee and the nominating committee
has each adopted a charter that satisfies the requirements of AMEX.
Neither the Board of Directors nor the audit committee has been
informed, nor is any director of the Company aware, of:
(i) any significant deficiencies and material weaknesses in
the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report
financial information; or (ii) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company’s internal control over
financial reporting.
2.33. Listing of the
Public Securities on AMEX . The Public Securities have been
authorized for listing on the AMEX.
3. Covenants of the Company
. The Company covenants and agrees as follows:
3.1. Amendments to
Registration Statement, the Sale Preliminary Prospectus
. The Company will deliver to the Representative, prior to
filing or use, any amendment of or supplement to the Registration
Statement, the Sale Preliminary Prospectus or Prospectus proposed
to be filed or used on or after the date of the Agreement and not
file or use 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 or the Exchange 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
hereof and the Sale Preliminary Prospectus and the
Prospectus. If (i) at any time when a prospectus relating
to the Public Securities is required to be delivered under the Act
or the Exchange Act, (ii) any event shall have occurred or any
condition shall exist as a result of which, in the opinion of
counsel for the Company or counsel for the Underwriters, the
Registration Statement, the Sale Preliminary Prospectus or 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 the case of the Sale Preliminary Prospectus and the
Prospectus, in light of the circumstances under which they were
made) not misleading, or (iii) if it is necessary during such
period to amend the Registration Statement or amend or supplement
the Sale Preliminary Prospectus or the Prospectus to comply with
the Act or the Exchange 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.
17
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 Public Securities under the
provisions of the Exchange Act. The Company will not
deregister the Public Securities under the Exchange Act without the
prior written consent of the Representative.
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 a prospectus is required to be delivered (or
would be required to be delivered but for Rule 172) 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 thereof or
supplement thereto becomes effective, deliver to Representative 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 become and 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
18
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, any Preliminary Prospectus or Prospectus, subject to
Section 3.1; (v) of the receipt of any comments or
request for any additional information from the Commission; and
(vi) of the happening of any event or existence of any
condition 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 any state securities commission shall enter a
stop order or suspend such qualification at any time, the Company
will make every reasonable effort to obtain promptly the lifting of
such order.
3.6. Review of Financial
Statements . Until the earlier of five years from the
Effective Date, or until such earlier upon which the Company is
required to be liquidated, the Company, at its expense, shall cause
its regularly engaged independent certified public accountants to
review (but not audit) the Company’s financial statements for
each of the first three fiscal quarters prior to the announcement
of quarterly financial information, the filing of the
Company’s Form 10-Q quarterly report and the mailing of
quarterly financial information to stockholders.
3.7. Affiliated
Transactions .
3.7.1. Business
Combinations . The Company will not consummate a Business
Combination with any entity which is affiliated with any
Director/Officer, Special Advisor or Initial Stockholder unless the
Company obtains an opinion from an independent investment banking
firm that the Business Combination is fair to the Company’s
stockholders from a financial perspective.
3.7.2. Administrative
Services . The Company has entered into an agreement (the
“ Service Agreement ”) with
(“
”), in the form filed as an exhibit to the Registration
Statement pursuant to which
will make available to the Company general and administrative
services, including office space, utilities, receptionist and
secretarial support for the Company’s use for $7,500 per
month, which shall be payable out of the interest earned on the
Trust Fund.
3.7.3. Compensation
. Except as set forth in this Section 3.7, the Company
shall not pay any Director/Officer, Special Advisor or Initial
Stockholder or any of their affiliates any fees or compensation
from the Company for services rendered to the Company prior to, or
in connection with, this Offering or the consummation of a Business
Combination; provided that the Initial Stockholders shall be
entitled to reimbursement from the Company for their out-of-pocket
expenses incurred on the Company’s behalf, which includes
expenses incurred by them in connection with seeking and
consummating a Business Combination.
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3.8. Secondary Market
Trading and Standard & Poor’s . The Company
will apply to be included in Standard and Poor’s Daily News
and Corporation Records Corporate Descriptions for a period of five
years from the consummation of the Offering. Promptly after
the consummation of the Offering, the Company shall take such steps
as may be necessary to obtain secondary market trading exemptions
for the Company’s securities in any state requested by the
Representative, provided 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. The Company
shall also take such other action as may be reasonably requested by
the Representative to obtain a secondary market trading exemption
in such other states as may be requested by the
Representative.
3.9. Financial Public
Relations Firm . Promptly after the execution of a
definitive agreement for a Business Combination, the Company shall
retain a financial public relations firm reasonably acceptable to
the Representative for a term to be agreed upon by the Company and
the Representative.
3.10. Reports to the
Representative .
3.10.1. Periodic Reports,
Etc. 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 furnish to the Representative and
their counsel copies of such financial statements and other
periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities, and
promptly furnish to the Representative: (i) a copy of each
periodic report the Company shall be required to file with the
Commission; (ii) a copy of every press release and every news
item and article with respect to the Company or its affairs
which was released by the Company; (iii) a copy of each Form
8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by
the Company; (iv) five copies of each Registration Statement;
and (v) such additional documents and information with respect
to the Company and the affairs of any future subsidiaries of the
Company as the Representative may from time to time reasonably
request; provided the Representative shall sign, if requested by
the Company, a Regulation FD compliant confidentiality agreement
which is reasonably acceptable to the Representative and their
counsel in connection with the Representative’ receipt of
such information. Documents filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System
(“ EDGAR ”) shall be deemed to have been
delivered to the Representative pursuant to this
section.
3.10.2. Transfer
Sheets . For a period of five years following the
Effective Date or until such earlier time upon which the Company is
required to be liquidated, the Company shall retain a transfer and
warrant agent acceptable to the Representative (the “
Transfer Agent ”) and during the two (2) year
period following the Closing Date, will furnish to the Underwriters
at the Company’s sole cost and expense such transfer sheets
of the Company’s securities as the Representative may
request, including subscriptions to the daily, weekly and monthly
consolidated transfer sheets of the Transfer Agent and
DTC. CST is acceptable to the Underwriters.
3.10.3. Secondary Market
Trading Survey . In the event the Public Securities are no
longer listed or quoted, as the case may be, on the New York Stock
Exchange, AMEX or
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the Nasdaq National Market,
or until such earlier time upon which the Company is required to be
liquidated, the Company shall engage Lowenstein Sandler PC (“
Lowenstein ”), for a one-time fee of $5,000, to
deliver and update to the Underwriters on a timely basis, but in
any event at the beginning of each fiscal quarter, a written report
detailing those states in which t
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