SHINE MEDIA ACQUISITION CORP. 6,000,000 Units UNDERWRITING AGREEMENT
Exhibit
1.1
6,000,000
Units
__________,
2006
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
As
Representative of the several Underwriters
listed
on Schedule I hereto
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned, Shine Media Acquisition Corp, a Delaware corporation (“Company”),
hereby confirms its agreement with ▇▇▇▇▇▇▇▇ Curhan Ford & Co. (being
referred to herein variously as “you,”
“▇▇▇▇▇▇▇▇
Curhan”
or
the
“Representative”)
and
with the other underwriters named on Schedule I hereto for which you are acting
as Representative (the Representative and the other Underwriters being
collectively called 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
6,000,000 units (“Firm
Units”)
of the
Company, at a purchase price of $5.79 per Firm Unit (subject to adjustment
in
respect of the Deferred Compensation which may be paid to the Underwriters
in
accordance with Section 1.1.3 hereof) (the “Purchase
Price”).
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
I
attached hereto and made a part hereof at the Purchase Price. The Firm Units
are
to be offered initially to the public (“Offering”)
at the
offering price of $6.00 per Firm Unit. Each Firm Unit consists of one share
of
the Company’s common stock, par value $.0001 per share (“Common
Stock”),
and
two warrants (“Warrant(s)”).
The
shares of Common Stock and the Warrants included in the Firm Units will not
be
separately transferable until the earlier to occur of (i) the expiration of
the
Underwriters’ option to purchase up to 900,000 additional units to cover
over-allotments or (ii) 20 trading days after the exercise in full by the
Underwriters of such option (the “Separation
Date”),
but
in no event will the Representative allow separate trading before an audited
balance sheet has been prepared reflecting receipt by the Company of the gross
proceeds of the Offering and filed with the Securities and Exchange Commission
(the “Commission”)
with a
Current Report on Form 8-K. Each Warrant entitles its holder to exercise it
to
purchase one share of Common Stock for $5.00 during the period commencing on
the
later of the consummation by the Company of its “Business Combination” or one
year from the effective date (“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.
“Business
Combination”
shall
mean the acquisition by the Company, whether by merger, capital stock exchange,
asset or stock acquisition or other similar type of transaction or a combination
of the foregoing, of one or more companies operating in the media and
advertising industry in China (as described more fully in the Registration
Statement).
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1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 1:00 P.M., New York
time, on the third business day following the date of this Agreement (or the
fourth business day following the date of this Agreement, if this Agreement
is
executed 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 date and time of execution of this Agreement shall hereinafter be referred
to as the “Execution
Time).
The
hour and date of delivery and payment for the Firm Units are called the
“Closing
Date.”
Payment for the Firm Units shall be made on the Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, payable
as follows: $33,117,500 of
the
proceeds received by the Company for the Firm Units shall be deposited in the
trust account (“Trust
Account”)
established by the Company for the benefit of the public stockholders as
described in the Registration Statement, $900,000 of which is deposited in
respect of the Deferred Compensation (as defined below), and $1,265,000, less
the amount owed by the Company to the Representative for all accountable
expenses owed thereto incident to the performance of the obligations of the
Company under this Agreement as set forth in Section 3.7 hereof, shall be paid
to the order of the Company to a bank account established by the Company,
against delivery to you of certificates (in form and substance satisfactory
to
the Underwriters) representing the Firm Units (or through the facilities of
the
Depository Trust Company (“DTC”))
for
the account of the Underwriters. Three hundred and sixty thousand dollars
($360,000) shall be deducted from the gross proceeds and retained by the
Representative as a nonaccountable expense allowance pursuant to Section 3.8.2
hereof. 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 full 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.
1.1.3 Deferred
Compensation.
Upon
the consummation of the Company’s initial Business Combination, the Company will
pay to the Underwriters the deferred compensation deposited by the Underwriters
into the Trust Account (the “Deferred Compensation”) in an amount equal to 2.5%
of the gross proceeds (before giving effect to any discounts or commissions)
from the sale of the Units (as defined in Section 1.2.1 hereof), or $0.15 per
Unit, plus interest earned on such amount, less payment or withholdings in
respect of taxes payable on such interest. Payment of the Deferred Compensation
will be made out of the proceeds of this Offering held in the Trust Account
at
the consummation of the Business Combination. If the Company fails to consummate
a Business Combination within the required time period set forth in the
Prospectus, the Deferred Compensation will not be paid to the Underwriters;
any
proceeds held in the Trust Account that would have been paid to the Underwriters
in respect of the Deferred Compensation and any interest earned thereon will,
instead, be included in the liquidation distribution of the proceeds held in
the
Trust Account made to the holders of the IPO Shares.
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 (“Over-allotment
Option”).
Such
additional 900,000 units
are
hereinafter referred to as “Option
Units.”
The
Firm Units and the Option Units are hereinafter collectively referred to as
the
“Units,”
and
the Units, the shares of Common Stock and the Warrants included in the Units
and
the shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the “Public
Securities.”
The
purchase price to be paid for the Option Units will be the same price per Option
Unit as the price per Firm Unit set forth in Section 1.1.1
hereof.
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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 by 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 (the
“Option
Closing Date”),
which
will not be later than five full business days after the date of the notice
or
such other time as shall be agreed upon by the Company and the Representative,
at the offices of the Representative or at such other place as shall be agreed
upon by the Company and the Representative. Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters, and,
subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Units specified in such
notice.
1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, payable
to the Trust Account at the offices of the Representative or at such other
place
as shall be agreed upon by the Representative and the Company upon delivery
to
you of certificates representing such securities (or through the facilities
of
DTC). 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 full business days prior to the Closing Date or the Option
Closing Date, as the case may be, and will be made available to the
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.
1.3 Representative’s
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or its
designees) on the Effective Date, for an aggregate purchase price of $100,
an
option (“Representative’s
Purchase Option”)
for
the purchase of up to an aggregate of 360,000 units (“Representative’s
Units”).
Each
of the Representative’s Units is identical to the Firm Units except that the
Warrants included in the Representative’s Units (“Representative’s
Warrants”)
have
an exercise price of $6.25 (125% of the exercise price of the Warrants included
in the Units sold to the public). The Representative’s Purchase Option shall be
exercisable, in whole or in part, commencing on the later of (i) one year from
the Effective Date and (ii) the consummation of a Business Combination and
expiring on the five-year anniversary of the Effective Date at an initial
exercise price per Representative’s Unit of $7.50, which is equal to one hundred
twenty five percent (125%) of the initial public offering price of a Unit.
The
Representative’s Purchase Option, the Representative’s Units, the
Representative’s Warrants, the Common Stock included in the Representative’s
Units 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.”
1.3.2 Payment
and Delivery.
Delivery and payment for the Representative’s Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Underwriters, upon payment
therefor, certificates for the Representative’s Purchase Option in the name or
names and in such authorized denominations as the Representative may
request.
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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 prepared and filed with the Commission a registration statement
and
an amendment or amendments thereto on Form S-1 (File No. 333-127093), including
a related preliminary prospectus (any such preliminary prospectus in the form
first filed with the Commission, a “Preliminary
Prospectus”
and
the
Preliminary Prospectus dated __________, 2006 included in the registration
statement first filed with the Commission on __________, 2006, in the form
distributed to potential investors in the Offering, the “Statutory
Prospectus”),
for
registration under the Act of the offering and sale of the Securities, 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 (“Rules”)
of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time
the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to paragraph (b) of Rule 430A of the Rules), is hereinafter
called the “Registration
Statement.”
Such
Registration Statement, including any amendments thereto filed prior to the
Execution Time, has become effective. The Company will file with the Commission
a final prospectus in accordance with Rule 424(b); such final prospectus in
the
form first filed with the Commission is hereinafter called the “Prospectus.”
As
filed, the Prospectus shall contain all information required by the Act and
the
Rules thereunder and, except to the extent the Representative shall agree in
writing to a modification, shall be in all substantive respects in the form
of
the Preliminary Prospectus included in the Registration Statement immediately
prior to the Execution Time.
2.1.2 Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number ) providing for
the registration under the Exchange Act of the Securities. The registration
of
the Securities under the Exchange Act is effective under the Rules on the date
hereof.
2.2 No
Stop Orders, Etc.
Neither
the Commission nor, to the Company’s knowledge, any state regulatory authority
has issued any order or threatened to issue any order preventing or suspending
the effectiveness of the Registration Statement or the use of any Preliminary
Prospectus, the Prospectus or any part thereof, or has instituted or, to the
Company’s knowledge, threatened to institute any proceedings with respect to
such an order.
2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
On the
Effective Date, the Registration Statement did, and when the Prospectus is
first
filed in accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any date on which Option Units are purchased, if such date is
not
the Closing Date (an “Option Closing Date”), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable requirements
of the Act and the Rules; on the Effective Date and at the Closing Date and
any
Option Closing Date, the Registration Statement did not and will not contain
any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any Option Closing Date, the Prospectus (together with
any
supplement thereto) will not include any untrue statement of a material fact
or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
At
the Execution Time, the Statutory Prospectus did, and on the Closing Date will,
comply in all material respects with the applicable requirements of the Act
and
the Rules; at the Execution Time, the Statutory Prospectus did not, and at
the
Closing Date will not, include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in
light of the circumstances under which they were made, not misleading. Nothing
has come to the attention of the Company that has caused the Company to believe
that the market-related data included in the Statutory Prospectus and the
Prospectus is not based on or derived from sources that are reliable and
accurate (in accordance with the methodologies used to derive such
market-related data set forth in the underlying source material) in all material
respects.
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2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Statutory 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 Statutory
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 Statutory Prospectus and the
Prospectus, or (ii) is material to the Company’s business, has been duly and
validly executed by the Company, is in full force and effect and is enforceable
against the Company and, to the Company’s knowledge, the other parties thereto,
in accordance with its terms, except (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and none
of
such agreements or instruments has been assigned by the Company, and neither
the
Company nor, to the best of the Company’s knowledge, any other party is in
breach or default thereunder and, to the best of the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a breach or default thereunder. To the best of the
Company’s knowledge, performance by the Company of the material provisions of
such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company
or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company since the formation of the Company, except
as disclosed in the Statutory Prospectus and the Prospectus.
2.3.4 Rules.
The
disclosures in the Statutory Prospectus and the Prospectus concerning the
effects of Federal, State and local regulation, and the laws and regulations
of
the People’s Republic of China (the “PRC”),
on
the Company’s business as currently contemplated are correct in all material
respects and do not omit to state a material fact necessary in order 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.
Since
the respective dates as of which information is given in the Statutory
Prospectus, except as otherwise specifically stated therein and in the
Prospectus, (i) there has been no material adverse change in the condition,
financial or otherwise, or business prospects of the Company, (ii) there have
been no material transactions entered into by the Company, other than as
contemplated pursuant to this Agreement, and (iii) no member of the Company’s
management has resigned from any position with the Company.
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2.4.2 Recent
Securities Transactions, Etc.
Subsequent to the respective dates as of which information is given in the
Statutory Prospectus, and except as may otherwise be indicated or contemplated
herein or therein and in the Prospectus, the Company has not (i) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its equity securities.
2.5 Independent
Accountants.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, whose report is filed with the Commission as part
of the Registration Statement, are independent accountants as required by the
Act and the Rules. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP has not, during the periods
covered by the financial statements included in the Statutory 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.
The
financial statements, including the notes thereto and supporting schedules
included in the Statutory Prospectus and the Prospectus, fairly present the
financial position, the results of operations and the cash flows of the Company
at the dates and for the periods to which they apply; and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles (“GAAP”),
consistently applied throughout the periods involved. The Statutory 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.
2.7 Authorized
Capital; Options; Etc.
The
Company had at the date or dates indicated in the Statutory Prospectus and
the
Prospectus duly authorized, issued and outstanding capital stock as set forth
in
the Statutory Prospectus and the Prospectus. Based on the assumptions stated
in
the Statutory Prospectus and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein. The Company’s
authorized Common Stock conforms to all statements relating thereto contained
in
the Statutory Prospectus and the Prospectus. Except as set forth in, or
contemplated by, the Statutory Prospectus and the Prospectus, on the Effective
Date and on the Closing Date, there will be no options, warrants, or other
rights to purchase or otherwise acquire any authorized but unissued shares
of
Common Stock of the Company or any security convertible into shares of Common
Stock of the Company, or any contracts or commitments to issue or sell shares
of
Common Stock or any such options, warrants, rights or convertible
securities.
2.8 Valid
Issuance of Securities; Etc.
2.8.1 Founders
Securities.
The
shares of Common Stock issued on and outstanding as of July 12, 2005, and any
shares issued in any stock dividend thereon, 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 shares of Common
Stock 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 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 were exempt from such registration requirements.
2.8.2 Securities
Sold Pursuant to the Unit Placement Agreement.
(i) The
shares of Common Stock included in the Placement Units (as defined in Section
2.10) have been duly authorized and, when executed by the Company and
countersigned, and issued and delivered against payment therefor by the
Investors pursuant to the Unit Placement Agreement, will be validly issued,
fully paid and non-assessable.
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(ii) The
Warrants included in the Placement Units were duly executed, authenticated,
issued and delivered, and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their 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 equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(iii) The
shares of Common Stock issuable upon exercise of the Warrants included in the
Placement Units have been duly authorized and, when executed by the Company
and
countersigned and issued and delivered against payment therefor pursuant to
the
Warrants included in the Placement Units and the Warrant Agreement, will be
validly issued, fully paid and non-assessable. The holders of such Common Stock
will not be subject to personal liability by reason of being such holders;
such
Common Stock will not be subject to any preemptive or other similar contractual
rights granted by the Company; and all corporate action required to be taken
for
the authorization, issuance and sale of such Common Stock (other than such
execution, countersignature and delivery at the time of issuance) has been
duly
and validly taken.
2.8.3 The
Placement Units and underlying securities conform in all material respects
to
all statements with respect thereto contained in the Statutory Prospectus and
the Prospectus. The certificates for the such securities are in due and proper
form. The offers and sales of the Placement Units were at all relevant times
either registered under the Act and the applicable state securities or Blue
Sky
laws or were exempt from such registration requirements.
2.8.4 Securities
Sold Pursuant to this Agreement.
(i) The
shares of Common Stock included in the Units and the Representative’s Units have
been duly authorized and, when executed by the Company and countersigned, and
issued and delivered against payment therefor by the Underwriters pursuant
to
this Agreement or the Representative’s Purchase Option, as the case may be, will
be validly issued, fully paid and non-assessable.
(ii) The
Warrants included in the Units and the Representative’s Warrants, when executed,
authenticated, issued and delivered in the manner set forth in the Warrant
Agreement against payment therefor by the Underwriters pursuant to this
Agreement or the Representative’s Purchase Option, as the case may be, will be
duly executed, authenticated, issued and delivered, and will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their 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 equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(iii) The
shares of Common Stock issuable upon exercise of the Warrants included in the
Units and the Representative’s Warrants have been duly authorized and, when
executed by the Company and countersigned and issued and delivered against
payment therefor pursuant to the Warrants or the Representative’s Warrants, as
the case may be, and the Warrant Agreement, will be validly issued, fully paid
and non-assessable. The holders of such Common Stock will not be subject to
personal liability by reason of being such holders; such Common Stock will
not
be subject to any preemptive or other similar contractual rights granted by
the
Company; and all corporate action required to be taken for the authorization,
issuance and sale of such Common Stock (other than such execution,
countersignature and delivery at the time of issuance) will have been duly
and
validly taken.
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(iv) When
issued, the Representative’s Purchase Option will constitute a valid and binding
obligation of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise price 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 is enforceable against the Company in
accordance with its 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 equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(v) The
Securities conform in all material respects to all statements with respect
thereto contained in the Statutory Prospectus and the Prospectus. The
certificates for the Securities are in due and proper form.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Statutory 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 between the Company and Continental Stock Transfer &
Trust Company, substantially in the form filed as Exhibit 4.4 to the
Registration Statement (“Warrant
Agreement”),
the
Trust Agreement with respect to certain proceeds of the Offering substantially
in the form filed as Exhibit 10.12 to the Registration Statement (“Trust
Agreement”),
those
certain letter agreements (each substantially in the forms filed as Exhibits
10.1 through 10.11 to the Registration Statement), pursuant to which each of
the
Initial Stockholders agrees to certain matters, including but not limited to,
certain matters described as being agreed to by them under the “Proposed
Business” section of the Prospectus (“Insider
Letters”),
that
certain Placement Unit Agreement, by and among the Company and each of the
investors listed on the signature pages thereto (the “Investors”),
pursuant to which the Investors will purchase an aggregate of 133,333 Units
(“Placement
Units”)
in a
private placement (the “Placement
Agreement”),
that
certain stock escrow agreement (substantially in the form filed as Exhibit
10.13
to the Registration Statement), whereby the Common Stock owned by the Initial
Stockholders will be placed in escrow until three years after the Effective
Date
(“Stock
Escrow Agreement”),
the
Representative’s Purchase Option and the Services Agreement (as defined in
Section 2.24
hereof)
have been duly and validly authorized by the Company and constitute the valid
and binding agreements of the Company, enforceable against the Company in
accordance with their respective terms (to the extent the Company has any
obligations under such 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 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 equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
8
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Representative’s Purchase Option, the Trust Agreement,
the Insider Letters, the Unit Placement Agreement, the Services Agreement and
the Stock Escrow Agreement, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company with the
terms
hereof and thereof do not and will not, with or without the giving of notice
or
the lapse of time or both (i) result in a breach of, or conflict with any of
the
terms and provisions of, or constitute a default under, or result in the
creation, modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms
of
any agreement or instrument to which the Company is a party except pursuant
to
the Trust Agreement; (ii) result in any violation of the provisions of the
Amended and Restated Certificate of Incorporation or the Bylaws of the Company;
or (iii) violate any existing applicable law, rule, regulation, judgment, order
or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or business.
2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its 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; Ownership.
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 and to consummate a Business Combination
as
described in the Statutory Prospectus and the Prospectus. The disclosures in
the
Statutory 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.
2.13.2 Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Trust Agreement, the Services Agreement,
the Unit Placement Agreement and the Stock Escrow Agreement, and as contemplated
by the Statutory Prospectus and the Prospectus, except with respect to
applicable federal and state securities laws.
2.13.3 Ownership.
Except
as set forth in the Statutory Prospectus and the Prospectus, the Company owns
or
has valid leasehold interests in all material properties and assets required
for
the operation of its business as now conducted, including those described in
the
Statutory Prospectus and the Prospectus as being owned by it.
9
2.14 D&O
Questionnaires.
To the
best of the Company’s knowledge, all information contained in the director and
officer questionnaires and NASD supplemental questionnaires (“Questionnaires”)
completed by each of the Company’s stockholders prior to the Offering
(“Initial
Stockholders”)
and
provided to the Underwriters as an exhibit to his or her Insider Letter (as
defined in Section 2.10)
is true
and correct and the Company has not become aware of any information which would
cause the information disclosed in the questionnaires completed by each Initial
Stockholder to become inaccurate and incorrect.
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge,
threatened against, or involving the Company or, to the best of the Company’s
knowledge, any Initial Stockholder, which has not been disclosed in the
Statutory Prospectus, the Prospectus and the Questionnaires, except for actions,
suits, proceedings, inquiries, arbitrations, investigations, litigation or
government proceedings pending against any Initial Stockholder that would not
individually or in the aggregate have a material adverse effect on such Initial
Stockholder, the Company or the Offering.
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its state of incorporation, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the Company.
2.17 Transactions
Affecting Disclosure to NASD.
2.17.1 Finder’s
Fees.
Except
as described in the Statutory 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
Initial Stockholder with respect to the sale of the Securities hereunder or
any
other arrangements, agreements or understandings of the Company or, to the
best
of the Company’s knowledge, any Initial Stockholder that may affect the
Underwriters’ compensation, as determined by the National Association of
Securities Dealers, Inc. (“NASD”).
2.17.2 Payments
Within Twelve Months.
The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) (i) to any person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company, (ii) to
any
NASD member or (iii) to any person or entity that has any direct or indirect
affiliation or association with any NASD member, within the twelve months prior
to the Effective Date.
2.17.3 Use
of
Proceeds.
None of
the net proceeds of the Offering will be paid by the Company to any
participating NASD member or its affiliates, except as specifically authorized
herein and except as may be paid in connection with a Business Combination
as
contemplated by the Statutory Prospectus and the Prospectus.
2.17.4 Insiders’
NASD Affiliation.
Based
on the Questionnaires distributed to such persons, except as set forth on
Schedule
2.18.4,
no
officer, director or any beneficial owner of the Company’s unregistered
securities has any direct or indirect affiliation or association with any NASD
member.
2.18 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Prospectus or
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company’s internal
accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.
10
2.19 Officers’
Certificate.
Any
certificate signed by any duly authorized officer of the Company on behalf
of
the Company and delivered to you or to your counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.20 Covenants
Not to Compete.
No
Initial Stockholder, employee, officer or director of the Company is subject
to
any noncompetition agreement or non-solicitation agreement with any employer
or
prior employer which could materially affect his ability to be an Initial
Stockholder, employee, officer and/or director of the Company.
2.21 Investments.
The
Company is not and, after giving effect to the offering and sale of the
securities as contemplated hereunder and in the Statutory Prospectus and the
Prospectus, and the application of the net proceeds from such sale as described
in the Statutory Prospectus and the Prospectus, will not be an “investment
company” within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
thereunder.
2.22 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.23 Related
Party Transactions.
There
are no business relationships or related party transactions involving the
Company or any other person required to be described in the Statutory Prospectus
and the Prospectus that have not been described as required.
2.24 Free
Writing Prospectus.
The
Company has not prepared or used any “free writing prospectus,” as such term is
defined under Rule 405.
2.25 Administrative
Services.
The
Company has entered into an agreement (the “Services
Agreement”)
with
Enjoy Media (Hong Kong) Limited (the “Affiliate”)
substantially in the form annexed as Exhibit 10.14 to the Registration Statement
pursuant to which the Affiliate will make available to the Company office space
and administrative, technological and secretarial support for the Company’s use
for $10,000 per month.
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.
11
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a Prospectus (or in lieu thereof a notice pursuant to Rule 173(a))
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 Rules
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 Statutory Prospectus and the Prospectus. If at any time when a Prospectus
(or in lieu thereof a notice pursuant to Rule 173(a)) 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 Statutory 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 light of the circumstances under which they
were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or the 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 or supplement in accordance with Section 10 of the
Act.
3.2.2 Exchange
Act Registration.
Until
the earlier of five years from the Effective Date, the date that the Company
is
liquidated or the date that the Company is acquired by a third party, 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 the Representative.
3.3 Blue
Sky Filings.
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. Until
the
earliest of (i) the date on which all Underwriters shall have ceased to engage
in market making activities in respect of the Public Securities, (ii) the date
on which the Public Securities are listed or quoted, as the case may be, on
the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market (or any successor to such entities) and (iii) the date of the liquidation
of the Company (the period from the Effective Date to such earliest date, the
“Blue
Sky Compliance Period”),
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 (or in lieu thereof a notice
pursuant to Rule 173(a)) is required to be delivered under the Act or the
Exchange Act, such number of copies of the Statutory Prospectus and the
Prospectus as such Underwriters may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to you two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed
consents of certified experts.
3.5 Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use its best efforts to cause the Registration Statement to remain
effective until distribution of the Public Securities is complete 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 or of the initiation, or
the
threatening, of any proceeding for that purpose when the Company becomes aware
of such, (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 when the Company becomes aware of such,
(iv)
of the mailing and delivery to the Commission for filing of any amendment or
supplement to the Registration Statement or Prospectus, (v) of the receipt
of
any comments or request for any additional information from the Commission,
and
(vi) of the happening of any event during the period described in Section
3.4
hereof
that, in the judgment of the Company, makes any statement of a material fact
made in the Statutory Prospectus, the Registration Statement, or the Prospectus
untrue or that requires the making of any changes in the Registration Statement
or the Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Commission
or
any state securities commission shall enter a stop order or suspend such
qualification during any such time, the Company will make every reasonable
effort to obtain promptly the lifting of such order.
12
3.6 Affiliated
Transactions.
3.6.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which is
affiliated with any 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.
3.6.2 Compensation.
Except
for payments made to the Affiliate as disclosed in the Statutory Prospectus
and
the Prospectus, the Company shall not pay any 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, the consummation of
a
Business Combination; provided that the Initial Stockholders and their
affiliates shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.
3.7 Reports
to the Representative.
3.7.1 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 its 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 Current Report on Form 8-K and Schedules
13D, 13G, 14D-1 or 13E-4 received or prepared by the Company, (iv) five copies
of each registration statement filed by the Company with the Commission under
the Securities Act, (v) a copy of monthly statements, if any, setting forth
such
information regarding the Company’s results of operations and financial position
(including balance sheet, profit and loss statements and data regarding
outstanding purchase orders) as is regularly prepared by management of the
Company and (vi) 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 that the Representative shall sign, if
required by the Company, a Regulation FD compliant confidentiality agreement
reasonably acceptable to the Representative in connection with the
Representative’s receipt of such information.
13
3.7.2 Transfer
Sheets.
During
the Blue Sky Compliance Period, the Company shall retain a transfer and warrant
agent acceptable to the Representative (“Transfer
Agent”)
and
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 the daily and monthly consolidated transfer sheets of the Transfer
Agent and DTC. The Underwriters acknowledge that Continental Stock Transfer
& Trust Company is an acceptable Transfer Agent.
3.7.3 Secondary
Market Trading Survey.
Until
such time as the Public Securities are listed or quoted, as the case may be,
on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market, the Company shall engage ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters (“▇▇▇▇▇▇▇”)
to
deliver to the Underwriters on the Effective Date, and to update upon the
request of the Representative at the beginning of each fiscal quarter, a written
report detailing those states in which the Public Securities may be traded
in
non-issuer transactions under the Blue Sky laws of the fifty States
(“Secondary
Market Trading Survey”).
3.8 Payment
of Expenses.
3.8.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at the Closing Date, all expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to (i) the preparation (exclusive of the fees and
expenses of counsel to the Underwriters), printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, any Preliminary Prospectus and the Prospectus and the
printing and mailing of this Agreement and related documents, including the
cost
of all copies thereof and any amendments thereof or supplements thereto supplied
to the Underwriters in quantities as may be required by the Underwriters, (ii)
the printing, engraving, issuance and delivery of the Units, the shares of
Common Stock and the Warrants included in the Units and the Representative’s
Purchase Option, including any transfer or other taxes payable thereon, (iii)
the qualification of the Public Securities under state or foreign securities
or
Blue Sky laws, including the costs of preparing, printing and mailing the
“Preliminary Blue Sky Memorandum,” and all amendments and supplements thereto,
the preparation of the Secondary Market Trading Survey (as defined above),
and
the reasonable fees and disbursements of ▇▇▇▇▇▇▇ related thereto; provided
that
the Company shall not be required to reimburse the Representative or ▇▇▇▇▇▇▇
for
any amounts under this clause (iii) in excess of $40,000 ($15,000 of which
has
been previously paid to ▇▇▇▇▇▇▇), (iv) filing fees, costs and expenses
(excluding fees and disbursements for the Representative’s counsel) incurred in
registering the Offering with the NASD and the Commission, (v) fees and
disbursements of the Transfer Agent, (vi) the Company’s expenses associated with
“due diligence” and “road show” meetings arranged by the Representative, and
(vii) all other costs and expenses customarily borne by an issuer incident
to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 3.8.1.
The
Representative may deduct from the net proceeds of the Offering payable to
the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in this Agreement to be paid by the Company to the Representative
and
others.
3.8.2 Nonaccountable
Expenses.
The
Company further agrees that, in addition to the expenses payable pursuant to
Section 3.8.1,
the
Company will pay to the Representative a nonaccountable expense allowance upon
the consummation of the Offering equal to one percent (1%) of the gross proceeds
(excluding the proceeds of the exercise of the over-allotment option, if any)
received by the Company from the sale of the Firm Units (before giving effect
to
any discounts and commissions), or $360,000.
14
3.9 Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering received by it in a manner
consistent with the application described under the caption “Use Of Proceeds” in
the Statutory Prospectus and the Prospectus.
3.10 Delivery
of Earnings Statements to Security Holders.
The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the sixteenth full calendar
month following the Effective Date, an earnings statement (which need not be
certified by independent public or independent certified public accountants
unless required by the Act or the Rules, but which shall satisfy the provisions
of Rule 158(a) under Section 11(a) of the Act) covering a period of at least
twelve consecutive months beginning after the Effective Date.
3.11 Notice
to NASD.
In the
event any person or entity (excluding attorneys, accountants, engineers,
environmental or labor consultants, investigatory firms, technology consultants
and specialists and similar service providers that are not affiliated or
associated with the NASD and are not brokers or finders) is engaged, in writing,
to assist the issuer in finding or evaluating a Target Business, the Company
will provide the following to the NASD and the Representative prior to
consummation of the Business Combination: (i) copies of agreements governing
said services; and (ii) a justification as to why the person or entity providing
the merger and acquisition services should not be considered an “underwriter or
related person” with respect to the Company’s initial public offering as such
term is defined in Rule 2710(a)(6) of the NASD Conduct Rules. The Company also
agrees that proper disclosure of such arrangement or potential arrangement
will
be made in the proxy statement which the Company will file for purposes of
soliciting stockholder approval for the Business Combination.
3.12 Stabilization.
Except
with respect to the agreements between the Representative and certain of the
Initial Stockholders substantially in the form filed as Exhibit 10.18 to the
Registration Statement, neither the Company, nor, to its knowledge, any of
its
employees, directors or stockholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that
has constituted or that might reasonably be expected to cause or result in,
under the Exchange Act, or otherwise, stabilization or manipulation of the
price
of any security of the Company to facilitate the sale or resale of the
Units.
3.13 Internal
Controls.
During
the Blue Sky Compliance Period, the Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets, (iii) access
to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.14 Accountants.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated or is no longer required to
file
reports under the Exchange Act, the Company shall retain nationally recognized
independent registered public accountants. The Representative acknowledges
that
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP is a nationally recognized independent registered
public accountant for purposes of this Section 3.14.
3.15 Form
8-K.
The
Company shall, on the date hereof, retain its independent public accountants
to
audit the financial statements of the Company as of the Closing Date
(“Audited
Financial Statements”)
reflecting the receipt by the Company of the gross proceeds of the initial
public offering. As soon as the Audited Financial Statements become available,
the Company shall immediately file a Current Report on Form 8-K with the
Commission, which Report shall contain the Company’s Audited Financial
Statements.
15
3.16 NASD.
During
the period of the distribution of the Public Securities, the Company shall
advise the NASD if it is aware that any 5% or greater stockholder of the Company
becomes an affiliate or associated person of an NASD member participating in
the
distribution of the Company’s Public Securities.
3.17 Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
3.18 Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust Account
to be invested only in money market funds or “government securities” with
specific maturity dates as set forth in the Trust Agreement and disclosed in
the
Statutory Prospectus and the Prospectus. The Company will otherwise conduct
its
business in a manner so that it will not become subject to the Investment
Company Act. Furthermore, once the Company consummates a Business Combination,
it will be engaged in a business other than that of investing, reinvesting,
owning, holding or trading securities.
3.19 Colorado
Trust Filing.
In the
event the Securities are registered in the State of Colorado, the Company will
cause a Colorado Form ES to be filed with the Commissioner of the State of
Colorado no less than 10 days prior to the distribution of the Trust Account
in
connection with a Business Combination and will do all things necessary to
comply with Section ▇▇-▇▇-▇▇▇ and Rule 51-3.4 of the Colorado Securities
Act.
4. Conditions
of Underwriters’ Obligations.
The
obligations of the Underwriters to purchase and pay for the Firm Units on the
Closing Date and the Option Units, if any, on any Option Closing Date, are
subject to the condition that the representations and warranties of the Company
as of the date hereof and as of the Closing Date or Option Closing Date, as
the
case may be, are true and accurate in all material respects, and to the
condition that the Company has performed all of its covenants and obligations
hereunder theretofore to be performed, and to the following additional
conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending or contemplated by the Commission and any
request on the part of the Commission for additional information shall have
been
complied with to the reasonable satisfaction of ▇▇▇▇▇▇▇.
4.1.2 NASD
Clearance.
The
NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting or other arrangements of the transactions
contemplated hereby.
4.1.3 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by you
pursuant to Section 3.3
hereof
shall have been issued on either on the Closing Date or the Option Closing
Date,
and no proceedings for that purpose shall have been instituted or shall be
contemplated.
16
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel.
On each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received the favorable opinion of Loeb & Loeb LLP (“Loeb
& Loeb”),
counsel to the Company, dated the as of the Closing Date or the Option Closing
Date, as the case may be, addressed to the Representative, substantially in
the
form attached hereto as Exhibit A.
4.2.2 Reliance.
In
rendering such opinion, such counsel may rely (i) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to ▇▇▇▇▇▇▇) of other counsel
reasonably acceptable to ▇▇▇▇▇▇▇, familiar with the applicable laws, and (ii)
as
to matters of fact, to the extent they deem proper, on certificates or other
written statements of officers of the Company and officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to ▇▇▇▇▇▇▇ if requested. The
opinion of counsel for the Company and any opinion relied upon by such counsel
for the Company shall include a statement to the effect that it may be relied
upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
4.3 Cold
Comfort Letter.
At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to ▇▇▇▇▇▇▇ from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
dated, respectively, as of the date of this Agreement and as of the Closing
Date
and the Option Closing Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Rules and that they have not, during
the
periods covered by the financial statements included in the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g)
of
the Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement, the Statutory Prospectus and the Prospectus comply
as to
form in all material respects with the applicable accounting requirements of
the
Act and the published Rules thereunder;
(iii) Stating
that, on the basis of a limited review which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholders
and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible
for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that (a)
the unaudited financial statements of the Company included in the Registration
Statement, do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules or are not fairly presented
in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements of the
Company included in the Registration Statement, (b) at a date not later than
five days prior to the Effective Date, Closing Date or Option Closing Date,
as
the case may be, there was any change in the capital stock or long-term debt
of
the Company, or any decrease in the stockholders’ equity of the Company as
compared with amounts shown in the February 28, 2006 balance sheet included
in
the Statutory Prospectus and the Prospectus, other than as set forth in or
contemplated by the Statutory Prospectus and the Prospectus, or, if there was
any decrease, setting forth the amount of such decrease, and (c) during the
period from July 18, 2005 to a specified date not later than five days prior
to
the Effective Date, Closing Date or Option Closing Date, as the case may be,
there was any decrease in revenues, net earnings or net earnings per share
of
Common Stock, other than as set forth in or contemplated by the Statutory
Prospectus and the Prospectus, or, if there was any such decrease, setting
forth
the amount of such decrease;
17
(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company;
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Statutory Prospectus
and the Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not during the immediately preceding five year period brought
to
the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
(vii) Statements
as to such other matters incident to the transaction contemplated hereby as
you
may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the President and the Secretary or Assistant Secretary of the Company,
dated the Closing Date or the Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.5
hereof
have been satisfied as of such date and that, as of Closing Date and the Option
Closing Date, as the case may be, the representations and warranties of the
Company set forth in Section 2
hereof
are true and correct. In addition, the Representative will have received such
other and further certificates of officers of the Company as the Representative
may reasonably request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or
Assistant Secretary of the Company, dated the Closing Date or the Option Date,
as the case may be, respectively, certifying (i) that the Bylaws and Amended
and
Restated Certificate of Incorporation of the Company are true and complete,
have
not been modified and are in full force and effect, (ii) that the resolutions
relating to the public offering contemplated by this Agreement are in full
force
and effect and have not been modified, (iii) all correspondence between the
Company or its counsel and the Commission, and (iv) as to the incumbency of
the
officers of the Company. The documents referred to in such certificate shall
be
attached to such certificate.
18
4.5 No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any, (i)
there shall have been no material adverse change or development involving a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Statutory Prospectus,
(ii)
no action suit or proceeding, at law or in equity, shall have been pending
or
threatened against the Company or any Initial Stockholder before or by any
court
or federal or state commission, board or other administrative agency wherein
an
unfavorable decision, ruling or finding may materially adversely affect the
business, operations, prospects or financial condition or income of the Company,
except as set forth in the Statutory Prospectus and Prospectus, (iii) no stop
order shall have been issued under the Act and no proceedings therefor shall
have been initiated or threatened by the Commission, and (iv) the Statutory
Prospectus, the Registration Statement and the Prospectus and any amendments
or
supplements thereto shall contain all material statements which are required
to
be stated therein in accordance with the Act and the Rules and shall conform
in
all material respects to the requirements of the Act and the Rules, and neither
the Statutory Prospectus nor the Prospectus nor any amendment or supplement
thereto shall contain any 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.
4.5.1 Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representative the
Representative’s Purchase Option.
4.6 Opinions
of Counsel for the Underwriters.
All
proceedings taken in connection with the authorization, issuance or sale of
the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to you and to ▇▇▇▇▇▇▇ and you shall have received from each of ▇▇▇▇▇▇▇
and ▇▇▇ ▇▇ Law Firm (“▇▇▇ ▇▇”), PRC Counsel for the Underwriters, a favorable
opinion, dated the Closing Date and the Option Closing Date, if any, with
respect to such of these proceedings as you may reasonably require. On or prior
to the Effective Date, the Closing Date and the Option Closing Date, as the
case
may be, ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇ shall have been furnished such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this
Section 4.6,
or in
order to evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
5. Indemnification.
5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by you that
participates in the offer and sale of the Securities (each a “Selected
Dealer”)
and
each of their respective directors, officers and employees and each person,
if
any, who controls any such Underwriter (“controlling
person”)
within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all legal or other expenses reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, whether arising out of any
action between any of the Underwriters and the Company or between any of the
Underwriters and any third party or otherwise) to which they or any of them
may
become subject under the Act, the Exchange Act or any other statute or at common
law or otherwise or under the laws of foreign countries, arising out of or
based
upon any untrue statement or alleged untrue statement of a material fact
contained in (i) any Preliminary Prospectus, the Registration Statement or
the
Prospectus (as from time to time each may be amended and supplemented); (ii)
in
any post effective amendment or amendments or any new registration statement
and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Representative’s Purchase Option; or (iii) any application
or other document or written communication (in this Section 5
collectively called “application”)
executed by the Company or based upon written information furnished by the
Company in any jurisdiction in order to qualify the Securities under the
securities laws thereof or filed with the Commission, any state securities
commission or agency, Nasdaq or any securities exchange; or the omission or
alleged omission therefrom of a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company with respect to an Underwriter by or on behalf of such
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in any
application, as the case may be. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against
the
Company or any of its officers, directors or controlling persons in connection
with the issue and sale of the Securities or in connection with the Registration
Statement or Prospectus.
19
5.1.2 Procedure.
If any
action is brought against an Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1,
such
Underwriter or Selected Dealer shall promptly notify the Company in writing
of
the institution of such action and the Company shall assume the defense of
such
action, including the employment and fees of counsel (subject to the reasonable
approval of such Underwriter or Selected Dealer, as the case may be) and payment
of actual expenses; provided,
that
the failure to give such notice shall not relieve the Company from any liability
it may have under Sections 5.1.1
or
5.1.2
hereof,
except to the extent the Company has been materially prejudiced (through
forfeiture of substantive rights or defenses) by such failure and; provided further,
that
the failure to notify the Company shall not relieve the Company from any
liability that it may have to an indemnified party other than on account of
Sections 5.1.1
or
5.1.2
hereof.
Such Underwriter, Selected Dealer or controlling person shall have the right
to
employ its or their own counsel in any such case, but the fees and expenses
of
such counsel shall be at the expense of such Underwriter, Selected Dealer or
controlling person unless (i) the employment of such counsel at the expense
of
the Company shall have been authorized in writing by the Company in connection
with the defense of such action, or (ii) the Company shall not have employed
counsel to take charge of the defense of such action, or (iii) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the right
to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events the reasonable fees and expenses of not more
than one additional firm of attorneys selected by the Underwriter, Selected
Dealer and/or controlling person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if the Underwriter, Selected Dealer
or controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application. In case any action
shall be brought against the Company or any other person so indemnified based
on
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
20
5.3 Contribution.
5.3.1 Contribution
Rights.
In
order to provide for just and equitable contribution under the Act in any case
in which (i) any person entitled to indemnification under this Section
5
makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5
provides
for indemnification in such case, or (ii) contribution under the Act, the
Exchange Act or otherwise may be required on the part of any such person in
circumstances for which indemnification is provided under this Section
5,
then,
and in each such case, the Company and the Underwriters shall contribute to
the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and the
Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
offering price appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a fraudulent misrepresentation (within
the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5.3.1,
no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages that such Underwriter has otherwise been required to pay in respect
of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section 5,
each
director, officer and employee of an Underwriter or the Company, as applicable,
and each person, if any, who controls an Underwriter or the Company, as
applicable, within the meaning of Section 15 of the Act shall have the same
rights to contribution as the Underwriters or the Company, as
applicable.
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing
party”),
notify the contributing party of the commencement thereof, but the omission
to
so notify the contributing party will not relieve it from any liability which
it
may have to any other party other than for contribution hereunder. In case
any
such action, suit or proceeding is brought against any party, and such party
notifies a contributing party or its representative of the commencement thereof
within the aforesaid fifteen days, the contributing party will be entitled
to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any
party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section 5
are
intended to supersede, to the extent permitted by law, any right to contribution
under the Act, the Exchange Act or otherwise available. The Underwriters’
obligations to contribute pursuant to this Section 5.3
are
several and not joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
21
6.2 Default
Exceeding 10% of Firm Units or Option Units.
In the
event that the default addressed in Section 6.1
above
relates to more than 10% of the Firm Units or Option Units, you may in your
discretion arrange for yourself or for another party or parties to purchase
such
Firm Units or Option Units to which such default relates on the terms contained
herein. If within one business day after such default relating to more than
10%
of the Firm Units or Option Units you do not arrange for the purchase of such
Firm Units or Option Units, then the Company shall be entitled to a further
period of one business day within which to procure another party or parties
reasonably satisfactory to you to purchase said Firm Units or Option Units
on
such terms. In the event that neither you nor the Company arrange for the
purchase of the Firm Units or Option Units to which a default relates as
provided in this Section 6,
this
Agreement will be terminated without liability on the part of the Company
(except as provided in Sections 3.10
and
5
hereof)
or the several Underwriters (except as provided in Section 5
hereof);
provided, however, that if such default occurs with respect to the Option Units,
this Agreement will not terminate as to the Firm Units; and provided further
that nothing herein shall relieve a defaulting Underwriter of its liability,
if
any, to the other several Underwriters and to the Company for damages occasioned
by its default hereunder.
6.3 Postponement
of Closing Date.
In the
event that the Firm Units or Option Units to which the default relates are
to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees
to
file promptly any amendment to the Registration Statement or the Prospectus
that
in the opinion of counsel for the Underwriters may thereby be made necessary.
The term “Underwriter” as used in this Agreement shall include any party
substituted under this Section 6
with
like effect as if it had originally been a party to this Agreement with respect
to such Securities.
7. Additional
Covenants.
7.1 Additional
Shares or Options.
The
Company hereby agrees that until the earlier of the consummation of a Business
Combination or the distribution of the Trust Account referred to in Section
7.6
hereof,
it shall not issue any shares of Common Stock or any options or other securities
convertible into Common Stock, or any shares of Preferred Stock which
participate in any manner in the Trust Account or which vote as a class with
the
Common Stock on a Business Combination.
7.2 Trust
Account Waiver Acknowledgment.
The
Company hereby agrees that prior to commencing its due diligence investigation
of any operating business which the Company seeks to acquire for its initial
Business Combination (“Target
Business”)
or
obtaining the services of any vendor, it will use its best efforts to cause
the
Target Business or vendor to execute a waiver letter substantially in the form
attached hereto as Exhibit B. Notwithstanding the foregoing, in the event any
Target Business, vendor or other third party refuses to execute such a letter,
the Company may nonetheless commence its due diligence investigations of such
Target Business or obtain the services of any such vendor or third party if
and
only if the Company’s board of directors determines in good faith after due
inquiry that the Company would be unable to obtain, on a reasonable basis,
substantially similar services or opportunities from another entity willing
to
execute such a waiver.
22
7.3 Insider
Letters and Stock Escrow Agreement.
The
Company shall not take any action or omit to take any action that would cause
a
breach of any of the Insider Letters executed between each Initial Stockholder
and the Representative or the Stock Escrow Agreement executed between the
Initial Stockholders and the Company and will not allow any amendments to,
or
waivers of any provisions of, such Insider Letters or Stock Escrow Agreement
without the prior written consent of the Representative.
7.4 Certificate
of Incorporation and Bylaws.
The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Amended and Restated Certificate
of Incorporation or Bylaws. Prior to the consummation of a Business Combination
or until the distribution of the Trust Account referred to in Section
7.6
hereof,
the Company will not amend its Amended and Restated Certificate of Incorporation
without the prior written consent of the Representative.
7.5 Blue
Sky Requirements.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
7.6 Acquisition/Distribution
Procedure.
The
Company agrees: (i) that, prior to the consummation of the initial Business
Combination, it will submit such transaction to the Company’s stockholders for
their approval (“Business
Combination Vote”)
even
if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law; and (ii) that, in the event
that the Company does not effect a Business Combination within 18 months from
the consummation of this Offering (subject to extension for an additional
six-month period, as described in the Prospectus), the Company will be
liquidated and will distribute to all holders of IPO Shares (as defined below)
an aggregate sum equal to the Company’s “Liquidation Value.” The Company’s
“Liquidation
Value”
shall
mean the Company’s book value, as determined by the Company and approved by
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP. In no event, however, will the Company’s
Liquidation Value be less than the Trust Account, inclusive of (i) the proceeds
held in trust from this Offering and the sale of the Placement Units, (ii)
the
2.5% of the proceeds held in the Trust Account representing the Deferred
Compensation, and (iii) any interest (net of taxes payable) not released to
the
Company to fund it’s working capital, including any interest earned on the
portion of the proceeds held in the Trust Account representing the Deferred
Compensation. Only holders of IPO Shares shall be entitled to receive
liquidating distributions and the Company shall pay no liquidating distributions
with respect to any other shares of capital stock of the Company. With respect
to the initial Business Combination Vote, the Company shall cause all of the
Initial Stockholders to vote the shares of Common Stock owned by them
immediately prior to this Offering, including the shares of Common Stock
included in the Placement Units, in accordance with the vote of the holders
of a
majority of the IPO Shares present, in person or by proxy at a meeting of the
Company’s stockholders called for such purpose. At the time the Company seeks
approval of the initial Business Combination, the Company will offer each holder
of the Company’s Common Stock issued in this Offering (the “IPO
Shares”)
the
right to convert their IPO Shares at a per share conversion price (the
“Conversion
Price”)
equal
to (A) the amount in the Trust Account as of two business days prior to the
Business Combination Vote, excluding (x) the portion of the proceeds
attributable to the private placement and the Deferred Compensation and (y)
any
interest earned on either the Deferred Compensation or the proceeds of the
private placement, divided
by
(B) the
total number of IPO Shares. If holders of less than 20% in interest of the
Company’s IPO Shares vote against such approval of a Business Combination and
elect to convert their IPO Shares, the Company may, but will not be required
to,
proceed with such Business Combination. If the Company elects to so proceed,
it
will convert shares, based upon the Conversion Price, from those holders of
IPO
Shares who affirmatively requested such conversion and who voted against the
Business Combination. Only holders of IPO Shares shall be entitled to receive
distributions from the Trust Account and the Company shall pay no distributions
with respect to any other shares of capital stock of the Company. If holders
of
20% or more in interest of the IPO Shares vote against approval of any potential
Business Combination and elect to convert their IPO Shares, the Company will
not
proceed with such Business Combination and will not convert such
shares.
23
7.7 Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including but not limited to using its best efforts to
prevent any of the Company’s outstanding securities from being deemed to be a
“▇▇▇▇▇ stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8 Presentation
of Potential Target Businesses.
The
Company shall cause each of its officers and directors to agree that, in order
to minimize potential conflicts of interest which may arise from multiple
affiliations, each such officer and director will present to the Company for
its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire a Target Business, until the earlier of the
consummation by the Company of a Business Combination, the distribution of
the
Trust Account or until such time as each such officer or director shall cease
to
be an officer or director of the Company, subject to any fiduciary obligations
such officer or director might have as a result of a fiduciary relationship
established prior to the establishment of a fiduciary relationship with the
Company.
7.9 Target
Net Assets.
The
Company agrees that the initial Target Business(es) in a Business Combination
must have a fair market value equal to at least 80% of the Company’s net assets
at the time of such Business Combination. The fair market value of such
business(es) must be determined by the Board of Directors of the Company based
upon standards generally accepted by the financial community, such as actual
and
potential sales, earnings and cash flow and book value. If the Board of
Directors of the Company is not able to independently determine that the Target
Business(es) has a fair market value of at least 80% of the Company’s net assets
at the time of such Business Combination, the Company will obtain an opinion
from an unaffiliated, independent investment banking firm with respect to the
satisfaction of such criteria. The Company is not required to obtain an opinion
from an investment banking firm as to the fair market value of the Target
Business(es) if the Company’s Board of Directors independently determines that
the Target Business(es) has a sufficient fair market value.
8. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Dates and such representations,
warranties and agreements of the Underwriters and Company, including the
indemnity agreements contained in Section 5
hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, the Company or any
controlling person, and shall survive termination of this Agreement or the
issuance and delivery of the Securities to the several
Underwriters.
9. Effective
Date of This Agreement and Termination Thereof.
9.1 Termination.
You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the Boston
Stock Exchange or on the NASD OTC Bulletin Board (or successor trading market)
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the
NASD
OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or (v)
if
a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, explosion, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in your opinion, make
it
inadvisable to proceed with the delivery of the Units, (vii) if any of the
Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof
of
such a material adverse change in the conditions or prospects of the Company,
or
such adverse material change in general market conditions, including without
limitation as a result of terrorist activities after the date hereof, as in
the
Representative’s judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by
the
Underwriters for the sale of the Securities.
24
9.2 Expenses.
In the
event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the
terms
herein, the obligations of the Company to pay the out of pocket expenses related
to the transactions contemplated herein shall be governed by Section
3.8.1
hereof.
9.3 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5
shall
not be in any way affected by, such election or termination or failure to carry
out the terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered or telecopied and confirmed
and shall be deemed given when so delivered or telecopied and confirmed or
if
mailed, two days after such mailing
If
to the
Representative:
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
As
Representative of the several Underwriters
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
General Counsel
Copy
to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If
to the
Company:
Rockefeller
Center
1230
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇
▇.
▇▇▇▇
25
Copy
to:
Loeb
& Loeb LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Esq.
10.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
10.3 Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
10.4 Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5
hereof,
and their respective successors, legal representatives and assigns, and no
other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provisions
herein contained.
10.6 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflict of laws. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of New
York
of the United States of America for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and
that
such courts represent an inconvenient forum. Any such process or summons to
be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in this Section 10.
Such
mailing shall be deemed personal service and shall be legal and binding upon
the
Company in any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from
the
other party(ies) all of its reasonable attorneys’ fees and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
10.7 No
Fiduciary Duty.
The
Company acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement is an arm's-length commercial transaction between
the
Company, on the one hand, and the Underwriters, on the other, (ii) in connection
therewith the Underwriters are acting solely as a principal and not as the
agent
or fiduciary of the Company, (iii) the Underwriters have not assumed an advisory
or fiduciary responsibility in favor of the Company with respect to the Offering
(irrespective of whether the Underwriters have advised or is currently advising
the Company on other matters) or any other obligation to the Company except
the
obligations expressly set forth in this Agreement and (iv) the Company has
consulted its own legal and financial advisors to the extent it deemed
appropriate. The Company agrees that it will not claim that the Underwriters
have rendered advisory services of any nature or respect, or owe a fiduciary
or
similar duty to the Company in connection with the Offering.
26
10.8 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
10.9 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way affect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
If
the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
| Very truly yours, | ||
| SHINE MEDIA ACQUISITION CORP. | ||
| |
|
|
| By: | ||
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇
Title: Chief Executive Officer and President |
||
| Accepted
on the date first above written |
|||
|
▇▇▇▇▇▇▇▇
CURHAN FORD & CO.
Acting
severally on behalf of itself and the
several
Underwriters named on Schedule I hereto
|
|||
| By: | |||
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: Head
of Investment Banking
|
|||
27
SCHEDULE
I
6,000,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
|
[__________]
|
|
Canaccord
▇▇▇▇▇ Inc.
|
[__________]
|
|
▇▇▇▇▇▇▇▇▇▇
& Co., LLC
|
[__________]
|
SCHEDULE
2.18.4
[None.]
EXHIBIT
A
FORM
OF OPINION OF COUNSEL TO THE COMPANY
EXHIBIT
B
FORM
OF TRUST CLAIM WAIVER LETTER
[Letterhead
of prospective vendor or target business.]
Rockefeller
Center
1230
Avenue of the Americas
▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Reference
is made to the Prospectus of Shine Media Acquisition Corp. (the “Company”),
dated , 2006 (the “Prospectus”).
We
acknowledge that we have read the Prospectus and understand that the Company
has
established a trust account for the benefit of the Company’s public stockholders
at JPMorgan Chase Bank, NA, maintained by Continental Stock Transfer & Trust
Company acting as trustee (the “Trust Account”) and that the Company may
disburse monies from the Trust Account only:
(a)
in
the
event the Company consummates a “business combination” (as such term is used in
the Prospectus), to any public stockholders who exercise their conversion
rights, to the Underwriters in respect of their deferred underwriting discount
and to the Company in the amount remaining in the Trust Account following such
payments to the public stockholders and the Underwriters; or
(b)
in
the
event of the Company’s dissolution and liquidation, to the public
stockholders.
For
and
in consideration of the Company [agreeing
to evaluate us for purposes of consummating an initial business
combination][engaging
our services],
we
hereby agree that we do not have any right, title, interest or claim of any
kind
in or to any monies in the Trust Account (“Claim”) and hereby waive any Claim we
may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with the Company and will not seek recourse against
the
Trust Account for any reason whatsoever.
Yours
very truly,
[NAME]
By:___________________________
Name:
Title: