As filed with the Securities and Exchange Commission on December 22, 2006
File No. 333-136536
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
to
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INFORMATION SERVICES GROUP, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or organization) |
6770
(Primary Standard Industrial Classification Code Number) |
20-5261587
(I.R.S. Employer Identification No.) |
Four Stamford Plaza
107 Elm St.
Stamford, CT 06902
(203) 517-3100
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Michael P. Connors, Chairman and Chief Executive Officer
Four Stamford Plaza
107 Elm St. Stamford, CT 06902
(203) 517-3100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Emanuel Cherney
Kaye Scholer LLP 425 Park Avenue New York, NY 10022 Telephone: (212) 836-8000 Facsimile: (212) 836-8689 |
Christopher S. Auguste
Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036 Telephone: (212) 715-9100 Facsimile: (212) 715-8000 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ý
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security to be Registered
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Amount
to be Registered |
Proposed Maximum
Offering Price Per Security(1) |
Proposed Maximum
Aggregate Offering Price(1) |
Amount of
Registration Fee |
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| Units, each consisting of one share of Common Stock, $0.001 par value, and one Warrant(2) | 21,562,500 | $ | 8.00 | $ | 172,500,000 | $ | 18,457.50 | |||||
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| Shares of Common Stock included as part of the Units(2) | 21,562,500 | — | — | — | ||||||||
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| Warrants included as part of the Units(2) | 21,562,500 | — | — | — | (3) | |||||||
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| Shares of Common Stock underlying the Warrants included in the Units(2)(4) | 21,562,500 | $ | 6.00 | $ | 129,375,000 | $ | 13,843.13 | |||||
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| Underwriters' Unit Purchase Option | 1 | $ | 100.00 | $ | 100 | — | (3) | |||||
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| Units underlying the Underwriters' Unit Purchase Option ("Underwriters' Units")(4) | 937,500 | $ | 9.60 | $ | 9,000,000 | $ | 963.00 | |||||
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| Shares of Common Stock included as part of the Underwriters' Units(4) | 937,500 | — | — | (3) | ||||||||
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| Warrants included as part of the Underwriters' Units(4) | 937,500 | — | — | (3) | ||||||||
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| Shares of Common Stock underlying the Warrants included in the Underwriters' Units(4) | 937,500 | $ | 7.50 | $ | 7,031,250 | $ | 752.34 | |||||
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| Total | $ | 317,906,350 | $ | 34,015.97 | (5) | |||||||
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The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 2006
PROSPECTUS
$150,000,000
Information Services Group, Inc.
18,750,000 Units
Information Services Group, Inc. is a blank check company recently formed for the purpose of effecting a merger, capital stock exchange, asset or stock acquisition or other similar business combination with one or more domestic or international operating businesses. Our efforts in identifying a prospective target will not be limited to a particular industry, although we intend to focus our efforts on the information services industry, including business, media, marketing and consumer information opportunities. These opportunities may be in major industry segments such as consumer products, retail, financial services, media, marketing, healthcare, government and technology. We do not have any specific merger, capital stock exchange, asset acquisition or other business combination under consideration or contemplation, and we have not, nor has anyone on our behalf, contacted any potential target business or had any discussions, formal or otherwise, with respect to such a transaction.
This is an initial public offering of our securities. Each unit has an offering price of $8.00 and consists of:
Each warrant entitles the holder to purchase one share of our common stock at a price of $6.00. Each warrant will become exercisable on the later of our completion of a business combination and , 2008 [one year from the date of this prospectus] , and will expire on , 2011 [four years from the date of this prospectus] , or earlier upon redemption.
Our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, has agreed to purchase from us 6,000,000 warrants at a price of $1.00 per warrant, in a private placement prior to the completion of this offering. The warrants purchased in the private placement will be identical to those sold in this offering, except that the warrants purchased by Oenoke Partners, LLC, are not subject to repurchase or redemption by us and can be exercised on a cashless basis. Oenoke Partners, LLC has agreed that it will not sell or otherwise transfer the warrants purchased in the private placement until one year from the date we complete a business combination.
We have granted the underwriters a 30-day option to purchase up to 2,812,500 additional units solely to cover over-allotments, if any (over and above the 18,750,000 units referred to above). The over-allotment will be used only to cover the net syndicate short position resulting from the initial distribution. We have also agreed to sell to the underwriters for $100, as additional compensation, an option to purchase up to a total of 937,500 units at a per-unit offering price of $9.60. The units issuable upon exercise of this option will be identical to those offered by this prospectus except that the warrants included in the option have an exercise price of $7.50 (125% of the exercise price of the warrants included in the units sold in the offering). The purchase option and its underlying securities have been registered under the registration statement of which this prospectus forms a part.
There is presently no public market for our units, common stock or warrants. We have applied to have our units listed on the American Stock Exchange under the symbol "III.U" on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the underwriters' over-allotment option and (2) the exercise in full of the over-allotment option, subject in either case to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, the common stock and warrants will be traded on American Stock Exchange under the symbols "III" and "III.WS", respectively. We cannot assure you that our securities will be or continue to be listed on the American Stock Exchange.
Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 15 of this prospectus for a discussion of information that should be considered in connection with investing in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Unit
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Total(1)
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| Public offering price | $8.00 | $150,000,000 | ||
| Underwriting discount(2) | $0.56 | $ 10,500,000 | ||
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| Proceeds, before expenses, to us | $7.44 | $139,500,000 |
Of the proceeds from this offering and the private placement, approximately $7.93 per unit, or $148,650,000 ($7.90 per unit, or $170,250,000 if the underwriters' over-allotment option is exercised in full), will be deposited into a trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company acting as trustee.
We are offering the units for sale on a firm commitment basis. The underwriters expect to deliver our securities to investors in the offering on or about , 2007.
Book-Running Manager
Deutsche Bank Securities
Co-Managers
| Morgan Joseph | Lazard Capital Markets |
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
MARKET AND INDUSTRY INFORMATION
Information regarding industry data pertaining to our proposed business in the section entitled "Proposed Business" contained in this prospectus consists of reports compiled by Veronis Suhler Stevenson. Neither we nor any of our affiliates has entered into any agreement (whether service provider agreements, underwriting agreements, consulting agreements, or any other agreements) with Veronis Suhler Stevenson. Neither we nor any of our affiliates is affiliated with Veronis Suhler Stevenson. We take responsibility for compiling and extracting, but we have not independently verified market and industry data provided by third parties or by industry or general publications, and we take no further responsibility for this data.
This summary highlights certain information appearing elsewhere in this prospectus. For a more complete understanding of this offering, you should read the entire prospectus carefully, including the risk factors and the financial statements and the related notes and schedules thereto. Unless otherwise stated in this prospectus:
We are a blank check company organized under the laws of the State of Delaware on July 20, 2006. We were formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses. We intend to focus our efforts on the information services industry, including business, media, marketing and consumer information opportunities (the "target industry"). These opportunities may be in major industry segments such as consumer products, retail, financial services, media, marketing, healthcare, government and technology. We intend to identify acquisition opportunities where we can apply management's experience within these segments to enhance the value of the acquired company's product and service offerings.
Although we intend to focus on identifying acquisition candidates in the information services industry and we will not initially actively seek to identify acquisition candidates in other industries, in the event that an opportunity is presented to us in another industry, we may consider pursuing that opportunity if we conclude that it represents an attractive investment opportunity for us. In addition, if we are unable to identify an acquisition candidate which we deem to be attractive in the information services industry after having expended a reasonable amount of time and effort to identify such a candidate, we may then decide to more actively seek opportunities in other industries. At present, we are not able to ascertain (i) what opportunities, if any, in industries outside of the target industry may be presented to us, (ii) how much time and effort we may expend prior to determining that we may not be able to identify favorable investment opportunities in the target industry or (iii) which other industries we may choose to examine with the objective of identifying a favorable investment opportunity. In the event we elect to pursue an investment outside of the target industry, we expect that our management, in conjunction with our board of directors and senior advisors, will engage in discussions to identify, based upon their
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respective familiarity with the business climate in general and specific industries in particular, one or more other industries which are likely to include a significant number of companies which would be suitable acquisition candidates. Once having identified such industry or industries, we would make known our interest in those industries to investment bankers and others who we believe may be able to identify companies in such industry or industries that may be candidates for a transaction.
We do not currently have any specific operating businesses under consideration. We have not identified or been provided with the identity of, or had any direct or indirect contact with potential targets. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable target, although we may do so following the offering. To date, our efforts have been limited to organizational activities and activities related to this offering.
Our management brings extensive experience with global operations, mergers and acquisitions, acquisition integration, and financial and legal expertise with leading firms in the information services industry. Our Chairman and CEO, Michael Connors, most recently served as Chairman and CEO of VNU's Media Measurement and Information (MMI) Group. VNU NV (VNU) is a leading global information and media company. In 2001, Mr. Connors was instrumental in creating the MMI Group, which comprises VNU's media information, entertainment, software and internet businesses, including Nielsen Media Research, Nielsen Entertainment and NetRatings. In addition to leading the MMI Group, Mr. Connors served as chairman of VNU World Directories, which included VNU's Yellow Pages and directory businesses operating in seven countries. Mr. Connors also served as a member of the VNU Executive Board. Prior to joining VNU, Mr. Connors was Vice Chairman of ACNielsen Corporation, one of the world's largest marketing information services companies, where he helped lead the turnaround of ACNielsen into a profitable company. During his leadership, ACNielsen's equity value grew from $893 million, its market capitalization immediately following its spinoff in November, 1996 from The Dun & Bradstreet Corporation (D&B), to $2.3 billion, its sale price to VNU in February, 2001. After the acquisition of ACNielsen by VNU in 2001, Mr. Connors led the successful integration of ACNielsen into VNU. Prior to that, as Senior Vice President of D&B, Mr. Connors played a key role in the breakup of D&B into three separate publicly traded companies. Prior to its breakup, D&B owned, among others, the following companies in the information services industry: Moody's Investors Service, Inc., R.H. Donnelley, IMS Health, ACNielsen Corporation, Nielsen Media Research, D&B Credit Services and a majority stake in Gartner Group. At the time of its breakup, D&B was one of the largest data and information companies in the world.
Frank Martell, our Executive Vice President, Chief Financial Officer and Treasurer, also has extensive experience in the information services industry. Until December 2006, Mr. Martell was the Chief Operating Officer of ACNielsen Corporation and Chief Executive Officer of ACNielsen Europe and Emerging Markets. He spent the previous 11 years with VNU, ACNielsen and D&B serving in a series of global financial and senior operating positions. Earl Doppelt, our Executive Vice President, General Counsel and Corporate Secretary, served as Executive Vice President and Chief Legal Officer of VNU, a leading global information and media company, until November 2006. He spent the previous 12 years with VNU, ACNielsen and D&B. Along with Mr. Connors, Mr. Doppelt was part of the executive team that led the turnaround of ACNielsen into a profitable company. Richard Gould, our Executive Vice President, was with Morgan Stanley until October 2006, where, during a 20-year career, he held several executive positions in capital markets, global sales management, marketing and new product innovation. Most recently, Mr. Gould served as co-head of Morgan Stanley's
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North America Equity Distribution as well as head of Global Derivatives Sales, Quantitative Research and the Global Pensions Group.
We have a strong and distinguished board of directors. In addition to Mr. Connors, our board of directors includes Robert J. Chrenc, R. Glenn Hubbard and Robert E. Weissman, individuals with established records in industry and the financial community. Formerly Executive Vice President, Chief Financial Officer and Chief Administrative Officer of ACNielsen Corporation, Mr. Chrenc currently is a director of Symbol Technologies Inc. Dr. Hubbard has served as the Dean of Columbia University, Graduate School of Business since 2004 and was Chairman of the President's Council of Economic Advisers from 2001 to 2003. Mr. Weissman retired in January 2001 after nearly 30 years of experience as Chief Executive Officer for several public corporations, including most recently IMS Health Incorporated, and prior to that Cognizant Corporation and The Dun & Bradstreet Corporation. We expect to rely heavily on their collective talent and experience in analyzing investment opportunities.
We believe the projected demand for products and services in the information services industry presents attractive opportunities for consolidation and growth. The information services industry encompasses companies which create, produce, deliver, distribute and/or market products and services including:
Although we may effect business combinations with companies operating in any industry we choose (including companies operating outside of the information services industry under circumstances described above), we believe that there are numerous business opportunities in the industries on which we will be focused. However, we have not conducted any research with respect to identifying the number and characteristics of the potential business combination candidates within our targeted industry, or any industry, or the location of the target industry domestically or internationally, or the likelihood or probability of success of any proposed business combination. Accordingly, we cannot assure you that we will be able to locate a target business or that we will be able to engage in a business combination with a target business on favorable terms, or at all.
While we may seek to effect business combinations with more than one target business, our initial business combination must have a fair market value at least equal to 80% of our net assets at the time of such acquisition (all of our assets, including the funds held in the
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trust account other than the deferred underwriting discount, less our liabilities). Consequently, it is likely that we will have the ability to effect a business combination with only a single domestic or international operating business. The target business that we acquire may have a fair market value significantly in excess of 80% of our net assets. We can also satisfy the requirement that the business combination have a fair market value at least equal to 80% of our net assets in an acquisition transaction where we acquire less than a 100% interest in the target business, provided that the fair market value of the interest in such business or businesses is at least equal to 80% of our net assets at the time such acquisition transaction is consummated. Although as of the date of this prospectus we have not engaged or retained, had any discussions with, or entered into any agreements with, any third party regarding any such potential financing transactions, we could seek to fund such a business combination by raising additional funds through the sale of our securities or through loan arrangements. However, if we were to seek such additional funds, any such arrangement would only be consummated simultaneously with our consummation of a business combination. Since we have no specific business combination under consideration, we have not entered into any such fundraising agreement and have no current intention of doing so. There is no assurance that such fundraising arrangement, if desired, would be available on acceptable terms, if at all. If we are unable to consummate a business combination within the allotted time periods set forth in this prospectus, we will implement a plan of dissolution and distribution which will include the liquidation of our trust account to our public stockholders.
Our executive offices are located at Four Stamford Plaza, 107 Elm St., Stamford, CT 06902, and our telephone number is (203) 517-3100.
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| Securities offered: | 18,750,000 units, at $8.00 per unit, each unit consisting of: | |||
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one share of common stock; and |
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one warrant. |
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Trading commencement and separation of common stock and warrants: |
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The units will begin trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the underwriters' over-allotment option and (2) its exercise in full, subject in either case to our having filed the Form 8-K described below and having issued a press release announcing when such separate trading will begin. |
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Separate trading of the common stock and warrants is prohibited until: |
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In no event will the common stock and warrants begin to trade separately until we have filed a Current Report on Form 8-K with the Securities and Exchange Commission, or SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering. We will file this Form 8-K promptly after the consummation of this offering, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Form 8-K, a second or amended Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option. |
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Common stock: |
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Number outstanding before this offering and the private placement: |
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4,687,500 shares(1) |
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Number to be outstanding after this offering and the private placement: |
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23,437,500 shares(2) |
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We may exercise this redemption right at our option, with no requirement for the consent of the underwriter or any other person. |
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The warrants issued in the private placement are not subject to redemption. |
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Private placement: |
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Our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, has agreed to purchase from us an aggregate of 6,000,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $6,000,000, in a private placement immediately prior to the completion of this offering. Oenoke Partners, LLC currently engages in no business activities other than to hold our securities. It does not have employees or advisors and its members consist solely of our management. The warrants to be sold in the private placement can be exercised on a cashless basis and will have terms and provisions that are otherwise identical to those of the warrants being sold as part of the units in the public offering, except that the private placement warrants will not be subject to redemption and the private placement warrants will not be transferable until one year following the date we complete a business combination. Oenoke Partners, LLC has agreed that it will not sell or otherwise transfer the warrants until after we consummate a business combination. |
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The $6,000,000 of proceeds from the private placement will be added to the proceeds of this offering and will be held in the trust account pending our completion of a business combination on the terms described in this prospectus. If we do not complete such a business combination, then the $6,000,000 of proceeds will be part of the liquidating distribution to our public stockholders and the warrants issued in the private placement will expire worthless. |
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Proposed American Stock Exchange symbols for our: |
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Units: |
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"III.U" |
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Common stock: |
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"III" |
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Warrants: |
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"III.WS" |
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Proceeds of this offering and the private placement to be held in the trust account: |
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$148,650,000, or approximately $7.93 per unit, of the proceeds of this offering will be placed in a trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company, pursuant to an agreement to be signed on the date of this prospectus. The amount to be placed in the trust account includes $6,000,000 of proceeds from the private placement and $4,500,000 of deferred underwriting discount (assuming the over-allotment option is not exercised). We believe that the inclusion in the trust account of the proceeds from the private placement and the deferred underwriting discount is a benefit to our stockholders because these amounts will ensure that additional proceeds will be available for distribution to investors if a liquidation of the trust account occurs as part of our dissolution and distribution prior to our completing an initial business combination. These proceeds will not be released until the earlier of the completion of a business combination and our liquidation as part of our plan of dissolution and distribution. However, up to $3,000,000 of the interest earned on the trust account (net of taxes) may be released to us to cover a portion of our operating expenses. Therefore, except with respect to such interest, unless and until a business combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business. These expenses may be paid prior to a business combination only from the proceeds of this offering and the private placement not held in the trust account (initially, $500,000) after payment of expenses related to this offering and from any interest earned on the trust account and released to us as described above. It is possible that we could use a portion of the funds not in the trust account to make a deposit, down payment or fund a "no-shop" provision with respect to a particular proposed business combination. In the event we were ultimately required to forfeit such funds (whether as a result of our breach of the agreement relating to such payment or otherwise), we may not have a sufficient amount of working capital available outside of the trust account to pay expenses related to finding a suitable business combination without securing additional financing. If we were unable to secure additional financing, we would most likely fail to consummate a business combination in the allotted time and would be forced to liquidate our trust account as part of our plan of dissolution and distribution. |
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The underwriters have agreed to defer $4,500,000 of their underwriting discount ($5,175,000 if the over-allotment option is exercised in full) until the consummation of our initial business combination. Upon the consummation of an initial business combination, this deferred underwriting discount of $0.24 per unit, which equals 3.0% of the gross proceeds of this offering, will be released to the underwriters and any public stockholders exercising their conversion rights out of the proceeds of this offering held in the trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company acting as trustee. The underwriters will not be entitled to any interest accrued on the deferred discount. |
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Warrant proceeds paid to us: |
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None of the warrants may be exercised until after the consummation of a business combination and, thus, after the proceeds of the trust account have been disbursed. Accordingly, the warrant exercise price will be paid directly to us and not placed in the trust account. |
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Limited payments to insiders: |
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Prior to the completion of a business combination, we will not pay any fees, reimbursements or other cash payments to our officers, directors or senior advisors or their respective affiliates other than: |
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repayment on the earlier of August 1, 2007 and the completion of this offering of a $100,000 loan, plus interest at the rate of 5% per annum, compounded semiannually, made by Oenoke Partners LLC; |
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repayment on the earlier of October 3, 2007 and the completion of this offering of a $150,000 loan, plus interest at the rate of 5% per annum, compounded semiannually, made by Oenoke Partners, LLC; and |
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reimbursement for any expenses related to this offering and to identifying, investigating and implementing a suitable business combination. |
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Stockholders must approve our initial business combination: |
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We will seek stockholder approval before we effect our initial business combination, even if the nature of the acquisition would not ordinarily require stockholder approval under applicable state law. In connection with the vote required for our initial business combination, all of our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, have agreed to vote the shares of common stock then owned by them in accordance with the majority of the shares of common stock voted by the public stockholders. We will proceed with a business combination only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination and only if public stockholders owning less than 20% of the shares sold in this offering exercise their conversion rights described below. Voting against the business combination alone will not result in conversion of a stockholder's shares for the conversion price described below. Such stockholder must have also exercised its conversion rights described below. In addition, if we seek approval from our stockholders to consummate a business combination within 90 days prior to the expiration of 24 months (assuming that the period in which we need to consummate a business combination has been extended to 24 months, as provided in our amended and restated certificate of incorporation) from the date of this offering, the proxy statement related to such business combination will also seek stockholder approval for our board's recommended plan of dissolution and distribution, in the event our stockholders do not approve such business combination. |
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Conversion rights for public stockholders voting to reject our initial business combination: |
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If our initial business combination is approved and completed, public stockholders voting against our initial business combination will be entitled to convert their shares of common stock into a pro rata share of the aggregate amount then on deposit in the trust account, including their pro rata portion of the deferred underwriting discount and any interest income earned on the trust account, net of (1) income taxes payable on the interest income on the trust account and (2) up to $3,000,000 of interest earned on the trust account balance, net of income taxes payable on this amount, released to us to fund working capital requirements. We refer to this amount as the conversion price. Public stockholders who convert their common stock will be paid as soon as reasonably practicable their conversion price following their exercise of conversion rights and will continue to have the right to exercise any warrants they own. We estimate that the initial per share conversion price will be approximately $7.93 per share, without taking into account interest earned on the trust account or taxes payable on such interest. This amount is less than the $8.00 per unit price in this offering and may be lower than the market price of the common stock on the date of conversion. Accordingly, there may be a disincentive on the part of public stockholders to exercise their conversion rights. |
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Dissolution and distribution if no business combination: |
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We will dissolve and distribute only to our public stockholders the amount in our trust account (including any accrued interest, net of income taxes payable thereon) plus any remaining net assets outside the trust account if we do not effect a business combination within 18 months after consummation of this offering (or within 24 months from the consummation of this offering if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months after consummation of this offering and the business combination has not yet been consummated within such 18 month period). Pursuant to our amended and restated certificate of incorporation, upon the expiration of the applicable time periods, our purpose and powers will be limited to dissolving, liquidating and winding up. Also contained in our amended and restated certificate of incorporation is the agreement of our board to dissolve our company upon the expiration of the applicable time period. We will seek stockholder approval for the plan of dissolution and distribution, and our principal stockholder, officers, directors and senior advisors have agreed to vote all shares owned by them in favor of the dissolution and distribution. As soon as reasonably practicable upon the approval by our stockholders of our plan of dissolution and distribution, we will liquidate our trust account to our public stockholders and pay, or reserve for payment, from funds not held in trust, our liabilities and obligations. All claims (whether existing, pending or that may be potentially brought against us in the next ten years) of our creditors must be paid or reasonably provided for prior to any distribution of funds held in the trust account to our stockholders. All of our officers, directors, senior advisors and principal stockholder directly or indirectly own common stock in our company, but have waived their right to receive distributions (other than with respect to common stock, or any shares of common stock underlying units, they purchase in connection with this offering or in the after market) upon the liquidation of the trust account, or as part of any plan of dissolution and distribution in the event we do not consummate a business combination within the required time periods. In addition, if we seek approval from our stockholders to consummate a business combination within 90 days of the expiration of 24 months (assuming that the period in which we need to consummate a business combination has been extended, as provided in our amended and restated certificate of incorporation) from the date of this offering, the proxy statement related to the business combination will also seek stockholder approval for our board's recommended plan of dissolution and distribution, in the event our stockholders do not approve the business combination. If no proxy statement seeking the approval of our stockholders for a business combination has been filed 30 days prior to the date which is 24 months (assuming that the period in which we need to consummate a business combination has been extended, as provided in our amended and restated certificate of incorporation) from the date of this offering, our board will, prior to such date, convene, adopt and recommend to our stockholders a plan of dissolution and distribution, and on such date file a proxy statement with the SEC seeking stockholder approval for this plan. |
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We expect that all costs associated with the implementation and completion of our plan of dissolution and distribution will be funded by funds not held in our trust account, although we cannot assure you that there will be sufficient funds for such purpose. To the extent such funds are not available, Oenoke Partners, LLC has agreed to advance us the necessary funds and has agreed not to seek repayment for such expenses, though it has not taken a reserve for this possibility and there can be no assurance that it will be able to meet its obligations under this agreement. |
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In the event we seek stockholder approval for a plan of dissolution and distribution and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. Pursuant to the terms of our amended and restated certificate of incorporation, our powers following the expiration of the permitted time periods for consummating a business combination will automatically thereafter be limited to acts and activities relating to dissolving and winding up our affairs, including liquidation. If we do not consummate a business combination, the funds held in our trust account may not be distributed except to our stockholders upon our dissolution and, unless and until such approval is obtained from our stockholders, the funds held in our trust account will not be released. Consequently, holders of a majority of our outstanding stock must approve our dissolution in order to receive the funds held in our trust account and the funds will not be available for any other corporate purpose. |
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Lock-up of securities: |
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Our existing stockholders have agreed that, subject to certain limited exceptions, the shares they owned prior to the completion of this offering and the warrants purchased in the private placement will not be transferable until one year from the date of the closing of the initial business combination. All securities which are subject to lockup restrictions will be held in an escrow account maintained by a third party escrow agent pursuant to the terms of a lock-up agreement to be entered into by and among us, the security holders and such escrow agent. Any transferee of securities will be subject to the same restrictions imposed on the existing stockholders. |
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We are a newly formed company that has no operations and has generated no revenues. Until we complete a business combination, we will have no operations and will generate no operating revenues. In making your decision on whether to invest in our securities, you should take into account not only the backgrounds of our management team but also the special risks we face as a blank check company. If we make down payments or pay exclusivity or similar fees in connection with structuring and negotiating our initial business combination and we do not complete the specific business combination, the costs incurred for the proposed transaction will not be recoverable. Such an event will result in a loss to us of the costs incurred and could materially and adversely affect subsequent attempts to locate and acquire or merge with another business.
You should carefully consider these and the other risks set forth in the section entitled "Risk Factors" beginning on page 15 of this prospectus.
The following table summarizes the relevant financial data for our business and should be read with our financial statements and the related notes and schedules thereto that are included in this prospectus. We have not had any significant operations to date, so only balance sheet data are presented.
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November 30, 2006
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| Working capital (deficiency)(2) | $ | (708,698 | ) | $ | 148,441,302 | |
| Total assets | 804,898 | 148,483,274 | ||||
| Total liabilities | 827,817 | 4,500,000 | ||||
| Value of common stock which may be converted to cash (approximately $7.93 per share) | — | 29,729,992 | ||||
| Stockholders' equity (deficit) | (22,919 | ) | $ | 114,253,282 | ||
The "as adjusted" information gives effect to the sale of the units we are offering pursuant to this prospectus, including the application of the related gross proceeds and the payment of the estimated remaining costs from such sale and the sale of 6,000,000 warrants at a price of $1.00 per warrant in the private placement.
The working capital and total assets amounts include the $148,650,000 (or $170,250,000 if the underwriters' over-allotment option is exercised in full) to be held in the trust account, which will be available to us only upon the consummation of a business combination within the time period described in this prospectus. If a business combination is not consummated, we will be dissolved and the proceeds held in the trust account will be distributed as part of our plan of dissolution and distribution solely to our public stockholders, who, for this purpose, include our existing stockholders with respect to any shares purchased by them in this offering or in the aftermarket.
We will not proceed with a business combination if public stockholders owning 20% or more of the shares sold in this offering vote against the business combination and exercise their conversion rights. Accordingly, if we have the requisite vote, we may effect a business combination even if public stockholders owning up to 3,749,999 shares of the 18,750,000 shares sold in this offering exercise their conversion rights and vote against the business combination. If this occurred, we would be required to convert to cash up to 3,749,999 shares of the 18,750,000 shares sold in this offering, at an initial per-share conversion price of approximately $7.93, without taking into account interest earned on the trust account or taxes payable on such interest. The actual per share conversion price will be equal to:
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An investment in our securities involves a high degree of risk. You should consider carefully all of the material risks described below, together with the other information contained in this prospectus before making a decision to invest in our securities. If any of the following risks occurs, our business, financial condition and results of operations may be adversely affected. In that event, the trading price of our securities could decline, and you could lose all or a part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements, including as a result of the risks described below.
Risks Associated with Our Business
We are a development stage company with no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated development stage company with no operating results to date. Therefore, our ability to begin operations is dependent upon obtaining financing through the public offering of our securities. Since we do not have an operating history, you will have no basis upon which to evaluate our ability to achieve our business objective, which is to acquire an operating business in the information services industry. We have not conducted any discussions and we have no plans, arrangements or understandings with any prospective acquisition candidates or engaged any agent or other representative to identify or locate suitable acquisition candidates. We have no present revenues and will not generate any revenues until, at the earliest, after the consummation of a business combination. We cannot assure you when or if an initial business combination will occur.
If we are unable to complete an initial business combination and are forced to dissolve and liquidate the trust account, our public stockholders will receive less than $8.00 per share and our warrants will expire worthless.
If we are unable to complete a business combination within the prescribed timeframes and are forced to dissolve and liquidate our assets as part of our plan of dissolution and distribution, the per share liquidation distribution will be less than $8.00 because of the expenses of this offering, our general and administrative expenses and the anticipated costs of seeking an initial business combination, which may include using a portion of the funds not being placed in trust as a down payment or to fund a down payment, lock-up or "no-shop" provision with respect to a particular proposed business combination. If we were to expend all of the net proceeds of this offering and the private placement, other than the proceeds deposited in the trust account, and without taking into account any interest earned on the trust account or taxes payable on such interest, the initial per share liquidation price would be $7.93, or $0.07 less than the per unit offering price of $8.00, assuming that amount was not further reduced by claims of creditors. We cannot assure you that the actual per share liquidation price will not be less than $7.93. In the event that our board of directors recommends and our stockholders approve a plan of dissolution and distribution and it is subsequently determined that our reserves for claims and liabilities to third parties are insufficient, stockholders who receive funds from our trust account could be liable up to such amounts to creditors. Furthermore, there will be no distribution with respect to our outstanding warrants, which will expire worthless if we liquidate before the completion of a business combination. For a more complete discussion of the effects on our stockholders if we are unable to complete a business combination, see the section below entitled "Proposed Business—Effecting a Business Combination—Plan of dissolution and distribution if no business combination."
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If the net proceeds of this offering not being placed in the trust account together with interest earned on the trust account available to us are not sufficient to allow us to operate for at least the next 24 months, we may be unable to complete a business combination.
We believe that, upon consummation of this offering, the funds available to us outside of the trust account, including up to $3,000,000 of interest earned from the trust account that may be released to us, will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. However, we cannot assure you that our estimates will be accurate. We could use a portion of the funds not being placed in the trust account to pay fees to consultants to assist us with our search for a target business. Additionally, we could use a portion of the funds not being placed in the trust account as a down payment or to fund a "no-shop" provision with respect to a particular proposed business combination, although we do not have any current intention to do so. If we did and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
You will not be entitled to protections normally afforded to investors of blank check companies.
Since the net proceeds of this offering are intended to be used to complete a business combination with a target business that has not been identified, we may be deemed to be a "blank check" company under the United States securities laws. However, since we will have net tangible assets in excess of $5,000,000 upon the consummation of this offering and will file a Current Report on Form 8-K with the SEC upon consummation of this offering including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Because we are not subject to Rule 419, our units will be immediately tradable and we have a longer period of time to complete a business combination in certain circumstances than we would if were subject to Rule 419. For a more detailed comparison of our offering to offerings under Rule 419, see the section entitled "Proposed Business—Comparison to Offerings of Blank Check Companies" below.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share liquidation price received by stockholders from the trust account as part of our plan of dissolution and distribution will be less than $7.93 per share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, prospective target businesses and other entities with which we execute agreements waive any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements, and the execution of such an agreement is not a condition to our doing business with anyone. Even if they do execute such agreements, they would not be prevented from bringing claims against the trust account including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with a claim against our assets, including the funds held in the trust account.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to
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find a provider of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives available to it and would enter into an agreement with a third party that did not execute a waiver only if management believed that such third party's engagement would be significantly more beneficial to us than any alternative. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and not seek recourse against the trust account for any reason. Accordingly, the proceeds held in the trust account could be subject to claims that could take priority over the claims of our public stockholders and the per share liquidation price could be less than the initial $7.93 per share held in the trust account, plus interest (net of (1) any taxes due on such interest, which taxes, if any, shall be paid from the trust account and (2) any amounts that may have been released to us to fund working capital requirements), due to claims of such creditors. If we are unable to complete a business combination and are forced to liquidate, each of our executive officers has jointly and severally agreed to reimburse us for our debts to vendors for services rendered or products sold to us, if we do not obtain a valid and enforceable waiver from that vendor of its rights or claims to the trust account and only to the extent necessary to ensure that such claims do not reduce the amount in the trust account. However, we cannot assure you that our executive officers will be able to satisfy those obligations. Based on the information provided to us in the director and officer questionnaires provided to us in connection with this offering as well as the representations as to their accredited investor status (as such term is defined in Regulation D), we currently believe that such persons are of substantial means and capable of funding their indemnity obligations, even though we have not asked them to reserve for such an eventuality. However, we cannot assure you that our executive officers will be able to satisfy those obligations. We believe the likelihood of our executive officers having to indemnify the trust account is limited because we intend to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claims of any kind in or to monies held in the trust account. In the event that our board recommends and our stockholders approve a plan of dissolution and distribution and it is subsequently determined that our reserve for claims and liabilities to third parties is insufficient, stockholders who received funds from our trust account could be liable for up to such amounts to creditors.
Additionally, if we are forced to file a bankruptcy case or an involuntary case is filed against us that is not dismissed, the funds held in our trust account will be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account the per share liquidation distribution would be less than the initial $7.93 per share held in the trust account.
We will dissolve and liquidate if we do not consummate a business combination and our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.
We will dissolve and disburse the funds in our trust account to our public stockholders if we do not complete a business combination within 18 months after the consummation of this offering (or within 24 months after the consummation of this offering if certain extension criteria are satisfied). There will be no distribution from the trust account with respect to our warrants which will expire worthless. Under Sections 280 through 282 of the Delaware General Corporation Law, or DGCL, stockholders may be held liable for claims, whether existing, pending or that may be potentially brought against it within a ten year period, by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures intended to ensure that it
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makes reasonable provision for all such claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share of the claim and the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. Although we will seek stockholder approval to liquidate the trust account to our public stockholders as part of our plan of dissolution and distribution, we do not intend to comply with these procedures of the DGCL. In the event that the Board recommends and the stockholders approve a plan of dissolution and distribution and it is subsequently determined that our reserve for claims and liabilities to third parties was insufficient, stockholders who received funds could be liable for claims (whether existing, pending or that may be potentially brought against us within a ten year period) for up to such amounts to creditors. As such, our stockholders could potentially be liable for any such claims to the extent of distributions received by them in a dissolution and any liability of our stockholders may extend beyond the third anniversary of such dissolution. We cannot assure you that third parties will not seek to recover from our stockholders amounts owed to them by us.
We cannot predict with certainty the extent to which the funds held in the trust account will be available for distribution to our stockholders in the event we dissolve and liquidate.
We cannot predict with certainty: (i) actual or potential claims or lawsuits that may be brought against us; (ii) what waiver agreements, if any, we will be able to obtain from vendors, service providers and prospective target businesses; (iii) the amount of additional expenses that we may incur that exceeds the amount of funds held outside of the trust; or (iv) the ability of our management to ensure that the proceeds held in the trust account are not reduced by claims of target businesses or vendors. To the extent we are required to make payments in respect of or provide for any such claims, lawsuits, expenses or other costs, the amount of funds held in the trust account for payment to our stockholders will be reduced.
The procedures we must follow under Delaware law and our amended and restated certificate of incorporation if we dissolve and liquidate may result in substantial delays in the liquidation of our trust account to our public stockholders as part of our plan of dissolution and distribution.
Pursuant to, among other documents, our amended and restated certificate of incorporation, if we do not complete a business combination within 18 months after the consummation of this offering, or within 24 months after the consummation of this offering if the extension criteria have been satisfied, we will be required to dissolve, liquidate and wind up in compliance with the provisions of the DGCL. In addition, in the event we seek stockholder approval for a plan of dissolution and distribution and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. If we do not consummate a business combination, the funds held in our trust account may not be distributed except to our stockholders upon our dissolution and, unless and until such approval is obtained from our stockholders, the funds held in our trust account will not be released. Consequently, holders of a majority of our outstanding stock must approve our dissolution in order to receive the funds held in our trust account and the funds will not be available for any other corporate purpose. The procedures required for us to liquidate under the DGCL, or a vote to reject any plan of dissolution and distribution by our stockholders, may result in substantial delays in the liquidation of our trust account to our public stockholders as part of our plan of dissolution and distribution.
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If we do not consummate a business combination and dissolve, payments from the trust account to our public stockholders may be delayed.
We currently believe that any plan of dissolution and distribution subsequent to the expiration of the 18 and 24-month deadlines would proceed in approximately the following manner:
In the event we seek stockholder approval for a plan of dissolution and distribution and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. Pursuant to the terms of our amended and restated certificate of incorporation, our powers following the expiration of the permitted time periods for consummating a business combination will automatically be limited to acts and activities relating to dissolving and winding up our affairs, including liquidation. If we do not consummate a business combination, the funds held in our trust account may not be distributed except to our stockholders upon our dissolution and, unless and until approval is obtained from our stockholders, the funds held in our trust account will not be released. Consequently, holders of a majority of our outstanding stock must approve our dissolution in order to receive the funds held in our trust account and the funds will not be available for any other corporate purpose.
These procedures, or a vote to reject any plan of dissolution and distribution by our stockholders, may result in substantial delays in the liquidation of our trust account to our public stockholders as part of our plan of dissolution and distribution.
Since we have not currently selected any target business with which to complete a business combination, we are unable to currently ascertain the merits or risks of the operations of that business.
Since we have not yet identified a prospective target business, investors in this offering have no current basis to evaluate the possible merits or risks of the operations of that business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a target business. For a more complete discussion of our selection of a target business, see the section below entitled "Proposed Business—Effecting a Business Combination—We have not identified a target business."
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We may seek investment opportunities in industries outside of our target industry (which industries may or may not be outside of our management's area of expertise).
Although we intend to focus on identifying acquisition candidates in our target industry and we will not initially actively seek to identify acquisition candidates in other industries (which industries may or may not be outside of our management's area of expertise), we will consider an acquisition outside of our target industry if (i) an acquisition candidate is presented to us and we determine that such candidate offers an attractive investment opportunity for our company or (ii) we are unable to identify a suitable candidate in the target industry after having expended some amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular acquisition candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in an acquisition candidate.
Subject to the limitations that our business combination must have a fair market value of at least 80% of our net assets at the time of the acquisition (all of our assets, including the funds held in the trust account other than the deferred underwriting discount, less our liabilities), we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. In addition, because there is no limitation on our ability to raise additional capital through equity placements or through loans, we may be able to acquire a company with a fair market value in an amount greater than 80% of our net assets at the time. We can also satisfy the requirement that the business combination have a fair market value at least equal to 80% of our net assets in an acquisition transaction where we acquire less than a 100% interest in the target business, provided that the fair market value of the interest in such business or businesses is at least equal to 80% of our net assets at the time such acquisition transaction is consummated.
Under Delaware law, the requirements and restrictions relating to this offering contained in our amended and restated certificate of incorporation may be amended, which could reduce or eliminate the protection afforded to our stockholders by such requirements and restrictions.
Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of a business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
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receive their pro rata share of the trust account, including their pro rata portion of the deferred underwriting discount and all accrued interest (net of (1) income taxes payable on the interest income on the trust account and (2) up to $3,000,000 of interest income on the trust account balance, net of income taxes payable on this amount, released to us to fund working capital requirements);
Our amended and restated certificate of incorporation requires that we obtain unanimous consent of our stockholders to amend the above-described provisions. However, the validity of unanimous consent provisions under Delaware law has not been settled. A court could conclude that the unanimous consent requirement constitutes a practical prohibition on amendment in violation of the stockholders' implicit rights to amend the corporate charter. In that case, the above-described provisions would be amendable without unanimous consent and any such amendment could reduce or eliminate the protection afforded to our stockholders. However, we view the foregoing provisions, including the requirement that the public stockholders owning less than 20% of the shares sold in this offering exercise their conversion rights in order for our initial business combination to be consummated, as obligations to our stockholders, and we will not take any action to waive or amend any of these provisions, including by seeking to amend our certificate of incorporation to increase or decrease this threshold.
Because we are a blank check company, it may be difficult for us to complete a business combination during the prescribed time period.
Based upon publicly available information, we have identified approximately 75 blank check companies that have gone public since August 2003. Of these companies, only 13 have actually completed a business combination. The remaining approximately 62 blank check companies have more than $4.3 billion in trust and are seeking to complete business acquisitions. Of these companies, only 27 have announced that they have entered into definitive agreements or letters of intent with respect to potential business combinations but have not yet consummated business combinations. Accordingly, there are approximately 33 blank check companies with more than $2.6 billion in trust that have filed registration statements and are seeking, or will be seeking, to complete business combinations. Furthermore, the fact that only nine of such companies have completed business combinations and only 27 other of such companies have entered into definitive agreements
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for business combinations, and two have announced liquidations, may be an indication that there are only a limited number of attractive targets available to such entities or that many targets are not inclined to enter into a transaction with a blank check company, and therefore we also may not be able to consummate a business combination within the prescribed time period. If we are unable to consummate an initial transaction within the prescribed time period, our purpose will be limited to dissolving, liquidating and winding up.
We may issue shares of our capital stock to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership.
Our amended and restated certificate of incorporation authorizes the issuance of up to 75,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Immediately after this offering (assuming no exercise of the underwriters' over-allotment option), there will be 20,250,000 authorized but unissued shares of our common stock available for issuance (after appropriate reservation for the issuance of shares upon full exercise of our outstanding warrants and the purchase option granted to the underwriters). Although we have no commitments as of the date of this offering to issue our securities, we may issue a substantial number of additional shares of our common stock or preferred stock, or a combination of common and preferred stock, to complete a business combination. The issuance of additional shares of our common stock or any number of shares of our preferred stock:
For a more complete discussion of the possible structure of a business combination, see the section below entitled "Proposed Business—Effecting a Business Combination—Selection of a target business and structuring of a business combination."
We may issue debt securities or otherwise incur substantial debt to complete a business combination, which may adversely affect our leverage and financial condition.
Although we have no commitments as of the date of this prospectus to issue any debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete a business combination. If we issue debt securities, it could result in:
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For a more complete discussion of the possible structure of a business combination, see the section below entitled "Proposed Business—Effecting a Business Combination—Selection of a target business and structuring of a business combination."
Our ability to effect a business combination and to execute any potential business plan afterwards will be dependent upon the efforts of our key personnel, some of whom may join us following a business combination and whom we may have only a limited ability to evaluate.
Our ability to effect a business combination will be dependent upon the efforts of our key personnel. The future role of our key personnel following a business combination, however, cannot presently be fully ascertained. Although we expect most of our management, particularly our Chief Executive Officer, to remain associated with us following a business combination, we may employ other personnel following the business combination. While we intend to closely scrutinize any additional individuals we engage after a business combination, we cannot assure you that our assessment of these individuals will prove to be correct. If we acquired a target business in an all-cash transaction, it would be more likely that current members of management would remain with us if they chose to do so. If a business combination were structured as a merger whereby the stockholders of the target company were to control the combined company following a business combination, it may be less likely that management would remain with the combined company unless it was negotiated as part of the transaction via the acquisition agreement, an employment agreement or other arrangement. In making the determination as to whether current management should remain with us following the business combination, management will analyze the experience and skill set of the target business' management and negotiate as part of the business combination that certain members of current management remain if it is believed that it is in the best interests of the combined company post-business combination. Although we intend to closely scrutinize the management of a prospective target business in connection with evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business's management will prove to be correct.
Our current management may have a conflict of interest in connection with negotiating the terms of our initial business combination.
Since our current management will negotiate the terms of our initial business combination and may negotiate the terms of their employment or consulting arrangements, our current management may have a conflict of interest in attempting to negotiate terms that are favorable to our public stockholders in the acquisition agreement at the same time that they are negotiating terms in their employment or consulting arrangements that are favorable to them.
Our officers, directors and senior advisors will allocate their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could impact our ability to consummate a business combination.
Our officers, directors and senior advisors are not required to commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and other businesses. We do not intend to have any full-time employees, other than those employed merely in an administrative capacity, prior to the consummation of a business combination. All of our executive officers may be engaged in other business
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endeavors and are not obligated to contribute any specific number of hours to our affairs. If our executive officers' other business affairs require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and could impact our ability to consummate a business combination.
Some of our officers, directors and senior advisors are currently affiliated with entities which may have existing or potential interests in our target industry engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicting fiduciary duties in determining to which entity a particular business opportunity should be presented.
Certain of our officers, directors and senior advisors are currently affiliated with other entities that may have existing or potential interests in our target industry following a business combination. Due to these existing affiliations, they may have conflicting fiduciary obligations with regard to presenting certain potential business opportunities to those entities that may be of interest to us. Our officers, directors and senior advisors may in the future become affiliated with other entities, including other "blank check" companies, engaged in business activities similar to those we intend to conduct.
A discussion of management's pre-existing fiduciary obligations to certain entities where members of management serve as directors see the section entitled "Management" below.
We may seek a business combination with a target business with which one or more of our existing officers, directors and senior advisors may be affiliated.
Our existing officers, directors and senior advisors are not currently aware of any specific opportunities to consummate a business combination with any entities with which they are affiliated, whether by virtue of the sale of assets, spin-off, divestiture or otherwise, and there have been no preliminary discussions or indications of interest with any such entity or entities. Although we will not be specifically focusing on, or targeting any, transaction with any affiliated entities, we would consider such a transaction if any such opportunity were presented to us, without first seeking to consummate a business combination with a non-affiliated entity, although we are unaware of any such actual or potential transaction as of the date of this prospectus. If, after the offering, we become aware of and pursue an opportunity to seek a business combination with a target business with which one or more of our existing officers, directors or senior advisors may be affiliated, conflicts of interest could arise in connection with negotiating the terms of and completing the business combination. Accordingly, such officers, directors and senior advisors may become subject to conflicts of interest regarding us and other business ventures in which they may be involved, which may have an adverse effect on our ability to consummate a business combination. Management intends to comply with the requirements of Delaware Law with respect to any such transaction. In order to minimize these potential conflicts of interest, we have agreed not to consummate a business combination with an entity that is affiliated with our principal stockholder, officers, directors or senior advisors unless we obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial point of view.
For a discussion of our management's business affiliations and the potential conflicts of interest that you should be aware of, see the sections below entitled "Management—Directors and Executive Officers" and "Management—Conflicts of Interest." We cannot assure you that these conflicts will be resolved in our favor.
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If we seek to effect a business combination with an entity that is directly or indirectly affiliated with our existing stockholders, conflicts of interest could arise.
Our existing stockholders, including our officers, directors and senior advisors, may in the future have affiliations with companies in the information services industry. If we were to seek a business combination with a target business with which one of our existing stockholders may be affiliated, conflicts of interest could arise in connection with negotiating the terms of and completing the business combination. Conflicts that may arise may not be resolved in our favor. For a discussion of our management's business affiliations and the potential conflicts of interest that you should be aware of, see the sections below entitled "Management—Directors and Executive Officers" and "Management—Conflicts of Interest."
All of our officers, directors and senior advisors beneficially own shares of, and warrants to purchase, our common stock which will not participate in liquidation distributions, and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination.
All of our officers, directors and senior advisors own stock and warrants in our company, either directly or indirectly, but have waived their right to receive distributions upon our liquidation as part of our plan of dissolution and distribution. The shares and warrants owned by our officers, directors and senior advisors will be worthless if we do not consummate a business combination. The personal and financial interests of our officers, directors and senior advisors may influence their motivation in identifying and selecting a target business and in timely completing a business combination. Consequently, our officers', directors' and senior advisors' discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our public stockholders' best interest.
It is probable that we will be able to complete only one business combination, which will cause us to be solely dependent on a single business and a limited number of products or services.
The net proceeds from this offering and the private placement will provide us with approximately $148,650,000 (net of the $4,500,000 deferred underwriting discount payable upon consummation of a business combination), which we may use to complete a business combination. Our initial business combination must have a fair market value of at least 80% of our net assets at the time of such acquisition (all of our assets, including the funds held in the trust account other than the deferred underwriting discount, less our liabilities). Consequently, it is probable that we will have the ability to complete only a single business combination. Accordingly, the prospects for our ability to effect our acquisition strategy may be:
In this case, we will not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities that may have the resources to complete several business combinations in different industries or different areas of a single industry.
The ability of our stockholders to exercise their conversion rights may not allow us to effectuate the most desirable business combination or optimize our capital structure.
When we seek stockholder approval of any business combination, we will offer each public stockholder the right to have his, her or its shares of common stock converted to cash
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if the stockholder votes against the business combination and if the business combination is approved and completed. Such holder must both vote against such business combination and then exercise his, her or its conversion rights to receive the conversion price. Accordingly, if our business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many stockholders may exercise such conversion rights, we may either need to reserve part of the trust account for possible payment upon such conversion or we may need to arrange third party financing to help fund our business combination in case a larger percentage of stockholders exercise their conversion rights than we expect. Therefore, we may not be able to consummate a business combination that requires us to use all of the funds held in the trust account as part of the purchase price, or we may end up having a leverage ratio that is not optimal for our business combination. This may limit our ability to effectuate the most attractive business combination available to us.
We will depend on interest earned on the trust account balance to fund a portion of our search for a target business or businesses and to complete our initial business combination.
Of the net proceeds of this offering, $500,000 will be available to us initially outside the trust account to fund our working capital requirements. We will depend on sufficient interest being earned on the proceeds held in the trust account to provide us with additional working capital that we may need to identify one or more target businesses and to complete our initial business combination. While we are entitled to have released to us from the trust account for such purposes interest income, net of income taxes on such interest, of up to a maximum of $3,000,000, a substantial decline in interest rates may result in our having insufficient funds available with which to structure, negotiate or close an initial business combination. In such event, we would need to obtain additional funds from our initial stockholders or another source to continue operations, or we may be forced to liquidate. None of our officers, directors, senior advisors or stockholders is required to provide any financing to us.
We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or to abandon a particular business combination.
Although we believe that the net proceeds of this offering and the private placement will be sufficient to allow us to consummate a business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the private placement prove to be insufficient, either because of the size of the business combination or the depletion of the available net proceeds in the search for a target business, or because we become obligated to convert into cash a significant number of shares from converting stockholders, we will be required to seek additional financing. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing is unavailable when needed to consummate a particular business combination, we will be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing may stall the development or growth of the target business. None of our officers, directors, senior advisors or principal stockholder is required to provide any financing to us.
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Our existing stockholders control a substantial interest in us and thus may influence certain actions requiring a stockholder vote.
Upon consummation of our offering, our existing stockholders, including our principal stockholder and all of our directors, officers and senior advisors will collectively own, directly or indirectly, 4,687,500 shares of common stock (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised) or approximately 20% of our issued and outstanding shares of common stock and warrants to purchase an additional 6,000,000 shares of common stock. As a result, at any annual or special meeting of stockholders that addresses any matter other than a business combination, our existing stockholders, because of their ownership position, will have considerable influence regarding the outcome of all matters requiring approval by our stockholders at such time, including the election of directors and approval of significant corporate transactions, following the consummation of our business combination.
Our existing stockholders paid an aggregate of $9,375, or $0.002 per unit consisting of one share of common stock and one warrant, for their units purchased prior to this offering and the private placement. We subsequently redeemed all of such warrants at a redemption price equal to $0.001 per warrant, or an aggregate redemption price equal to $4,687.50. In addition, our existing stockholders paid $703.13, or $0.001 per share of common stock, for 703,125 shares of common stock which are subject to redemption to the extent the underwriter's over-allotment option is not exercised. Accordingly, you will experience immediate and substantial dilution from the purchase of our common stock.
The difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to you and the other investors in this offering. The fact that our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, acquired their shares at a nominal price has significantly contributed to this dilution. Assuming the offering is completed, you and the other new investors will incur an immediate and substantial dilution of approximately 27.46% or $2.20 per share (the difference between the pro forma net tangible book value per share of $5.80, and the initial offering price of $8.00 per unit). See "Dilution" for additional information regarding the dilution that you will experience.
Our outstanding warrants and option may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.
In connection with this offering, as part of the units we will issue warrants to purchase 18,750,000 shares of common stock (or warrants to purchase 21,562,500 shares of our common stock if the underwriters' over-allotment option is exercised in full). We will also issue an option to purchase an aggregate of 937,500 units to the underwriters, which, if exercised, will result in the issuance of an additional 937,500 warrants and an additional 937,500 shares. Our existing stockholders will also own warrants to purchase an aggregate of 6,000,000 shares, which shares are issuable upon exercise of the warrants purchased in the private placement. To the extent that we desire to issue shares of common stock to effect a business combination, the potential for the issuance of substantial numbers of additional shares upon exercise of these warrants and the underwriters' purchase option could make us a less attractive acquisition vehicle in the eyes of a target business as such securities, when exercised, will increase the number of issued and outstanding shares of our common stock and reduce the value of the shares issued to complete the business combination. Accordingly, our warrants and the underwriters' purchase option may make it more difficult to effectuate a business combination or increase the cost of the target business. Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants and option could have an adverse effect on the market price for our securities or on our ability to obtain future public financing. If and to the extent these warrants and this option are exercised, you will experience dilution in your holdings.
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Holders of warrants will not be able to exercise their warrants in the event we are unable to maintain an effective registration statement with respect to the shares issuable upon exercise of the warrants.
No warrants will be exercisable unless at the time of exercise a prospectus relating to common stock issuable upon exercise of the warrants is current and the common stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. Under the terms of the warrant agreement, we have agreed to meet these conditions and use our reasonable best efforts to maintain a current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so. If we fail to register the shares of common stock underlying the warrants or have them qualified for an exemption under the securities laws of the state of residence of the holder of the warrants, holders of warrants will not be entitled to exercise the warrants and as a result, the warrants may be deprived of any value and the market for the warrants may be limited. We are not obligated to pay cash or other consideration to the holders of the warrants in such circumstance or under other circumstances and the warrants could become, and later expire, worthless.
Because the warrants we will sell in the private placement will be issued pursuant to an exemption from the registration requirements under the federal securities laws, the holders of the warrants purchased in the private placement will be able to exercise their warrants even if, at the time of exercise, a prospectus relating to the common stock issuable upon exercise of the warrants issued in the public offering is not current. As a result, the holders of the warrants purchased in the private placement will not have any restrictions with respect to the exercise of their warrants. As described above, the holders of the warrants purchased in this offering will not be able to exercise them unless we have a current registration statement covering the shares issuable upon their exercise.
Holders of our unit purchase option will not be able to exercise their option or the warrants issuable upon exercise of such option in the event we are unable to maintain an effective registration statement with respect to the option, the units and the common stock issuable upon exercise of the option and the warrants.
Holders of our unit purchase option will not be able to exercise this option or the warrants issuable upon exercise of such option in the event we are unable to maintain an effective registration statement with respect to the option, the units and the common stock issuable upon exercise of the option and the warrants. If we fail to register the option, the units and the common stock issuable upon exercise of the option and the warrants, holders of the option will not be entitled to exercise the option or the underlying warrants. We are not obligated to pay cash or other consideration to the holders of the option in such a circumstance or under any other circumstances and the option and the underlying warrants could become, and later expire, worthless.
If our existing stockholders and purchasers of the private placement warrants exercise their registration rights, it may have an adverse effect on the market price of our common stock and the existence of these rights may make it more difficult to effect a business combination.
Our existing stockholders are entitled to require us to register the resale of their shares of common stock at any time after the date on which its shares are released from their lock-up. In addition, the holders of the private placement warrants can demand that we register those warrants and the shares of common stock underlying the warrants at anytime after such warrants become exercisable by their terms. If our existing stockholders and the holders of the private placement warrants exercise their registration rights with respect to all of their
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shares of common stock and warrants, then there will be an additional 4,687,500 shares of common stock (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised), and 6,000,000 warrants and/or up to 6,000,000 shares of common stock issued upon exercise of the warrants, that will be eligible for trading in the public market. The presence of this additional number of securities eligible for trading in the public market may have an adverse effect on the market price of our common stock. In addition, the existence of these rights may make it more difficult to effectuate a business combination or increase the cost of the target business, as the stockholders of the target business may be discouraged from entering into a business combination with us or may request a higher price for their securities as a result of these registration rights and the potential future effect their exercise may have on the trading market for our common stock.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to our reports of operating losses, one or more potential business combinations, the filing of periodic reports with the SEC, and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established or sustained.
The determination of the offering price of our units is more arbitrary compared with the pricing of securities for an operating company in a particular industry.
Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. Factors considered in determining the prices and terms of the units, including the common stock and warrants underlying the units, include:
However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since we have no historical operations or financial results with which to compare them.
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If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination.
If we are deemed to be an investment company under the Investment Company Act of 1940, our activities may be restricted, including:
In addition, we may have imposed upon us burdensome requirements, including:
We do not believe that our anticipated principal activities will subject us to the Investment Company Act of 1940, as amended. To this end, the proceeds held in trust may be invested by the trust agent only in "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity date of 180 days or less. By restricting the investment of the proceeds to these instruments, we intend to meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act of 1940. This offering is not intended for persons who are seeking a return on investments in government securities. The trust account and the purchase of government securities for the trust account is intended as a holding place for funds pending the earlier to occur of (i) the consummation of our primary business objective, which is a business combination and (ii) absent a business combination, our dissolution and return of the funds held in this trust account to our public stockholders as part of our plan of dissolution and distribution. Notwithstanding our belief that we are not required to comply with the requirements of such act, in the event that the stockholders do not approve a plan of dissolution and distribution and the funds remain in the trust account for an indeterminable amount of time, we may be considered to be an investment company and thus required to comply with such act. If we were deemed to be subject to the act, compliance with these additional regulatory burdens would require additional expenses for which we have not accounted.
Our existing stockholders will not be reimbursed for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not held in the trust account unless the business combination is consummated, and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination and in the public stockholders' best interest.
Our existing stockholders, including all of our officers, directors and senior advisors, will not be reimbursed for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not held in the trust account unless the business combination is consummated. The financial interest of our officers, directors or senior advisors could influence their motivation in selecting a target business, and thus there may be a conflict of interest when determining whether a particular business combination is in the stockholders' best interest.
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The American Stock Exchange may delist our securities, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.
We have applied to list our securities on the American Stock Exchange, a national securities exchange, upon consummation of this offering. We cannot assure you that our securities, once listed, will continue to be listed on the American Stock Exchange. Additionally, in connection with our business combination, it is likely that the American Stock Exchange may require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at the time of our business combination. If the American Stock Exchange delists our securities from trading on its exchange, we could face significant consequences including:
Risks Associated with the Information Services Industry
We intend to focus our search on target businesses in the information services industry. We believe that the following risks will apply to us following the completion of a business combination with a target business in the information services industry.
If, following a business combination, the products or services that we market or sell are not accepted by the public, our results of operations will be adversely affected.
The information services industry is dependent on developing and marketing new products and services that respond to technological and competitive developments and changing client needs and tastes. We cannot assure you that the products and services of a target business with which we effect a business combination will gain market acceptance. Any significant delay or failure in developing new product and service offerings, could result in a loss of actual or potential market share and a decrease in revenues.
The information services industry is competitive and we may not be able to compete effectively which could adversely affect our revenues and profitability upon consummation of a business combination.
The information services industry is rapidly evolving and competitive. Many of the competitors we will face upon consummation of a business combination may have significantly greater financial, technical, marketing and other resources than we do. In addition, the management of our competitors may have greater operating resources and experience in their respective industries. Some of these competitors may also offer a wider range of services than we can and have greater name recognition and a larger client base. These competitors may be able to respond more quickly and effectively to new or changing opportunities, technologies and client requirements. They may also be able to undertake more extensive promotional activities, offer more attractive terms to clients, and adopt more aggressive pricing policies. If we are unable to compete effectively following a business combination, our business, financial condition, results of operations and prospects could be materially adversely affected.
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Changes in legislative, judicial, regulatory, cultural or consumer environments relating to consumer privacy or information collection and use may affect our ability to collect and use data.
Privacy concerns could lead to the enactment of legislation or industry regulations, the issuance of judicial interpretations, or simply a change in customs that could place limitations on our ability to collect, maintain and use information about internet consumers following a business combination. Such limitations could result in a material increase in the cost of collecting some kinds of data or could prevent us from operating or distributing some of our products and services following a business combination. Failure to comply with the law and regulatory requirements may result criminal or civil liability. The occurrence of one or more of these events could materially harm our business, results of operation and financial condition following a business combination.
Industry consolidation could result in increased competition for the products and services we expect to provide following a business combination.
The possibility of the consolidation or merger of companies which might combine forces to create a single-source provider of multiple services to the marketplace in which we expect to compete could result in increased competition for us. The dynamics of the marketplace could be significantly altered if some of the single-service providers were to combine with each other to provide a wider variety of services, which could adversely affect our target's business, financial position and operating results.
We may be unable to protect or enforce the intellectual property rights of any target businesses that we acquire.
After completing a business combination, the procurement and protection of trademarks, copyrights, patents, domain names, trade dress, and trade secrets may be critical to our success. We will likely rely on a combination of copyright, trademark, trade secret laws and contractual restrictions to protect any proprietary technology and rights that we may acquire. Despite our efforts to protect that proprietary technology and those rights, we may not be able to prevent misappropriation of those proprietary rights or deter independent development of technologies that compete with the business we acquire. Our competitors may file patent applications or obtain patents and proprietary rights that block or compete with our patents. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. It is also possible that third parties may claim we have infringed their patent, trademark, copyright or other proprietary rights. Claims or litigation, with or without merit, could result in substantial costs and diversions of resources, either of which could have a material adverse effect on our competitive position and business. Depending on the target business or businesses that we acquire, it is likely that we will have to protect copyrights, trademarks, patents, and domain names in an increasing number of jurisdictions, a process that is expensive and may not be successful in every location. With respect to certain proprietary rights, such as trademarks and copyrighted materials, of the target business or businesses that we will acquire, we expect that the target business or businesses will have entered into license agreements in the past and will continue to enter into such agreements in the future. These licensees may take actions that diminish the value of such target business or businesses' proprietary rights or cause harm to such target business or businesses' reputation.
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If we are alleged to have infringed on the intellectual property or other rights of third parties, it could subject us to significant liability for damages and invalidation of our proprietary rights.
If, following a business combination, third parties allege that we have infringed on their intellectual property rights, privacy rights or publicity rights or have defamed them, we could become a party to litigation. These claims and any resulting lawsuits could subject us to significant liability for damages and invalidation of our proprietary rights and restrict our ability to publish and distribute the infringing or defaming content.
Changes in technology may reduce the demand for the products or services we may offer following a business combination.
The information services industry is affected by rapid and significant changes in technology. These changes may reduce the demand for certain existing products and services and technologies used in the industry or render them obsolete. We cannot assure you that the technologies used by or relied upon or produced by a target business with which we effect a business combination will not be subject to such reduction in demand or obsolescence. While we may attempt to adapt and apply the services provided by the target business to newer technologies, we cannot assure you that we will have sufficient resources to fund these changes or that these changes will ultimately prove successful.
Since we may acquire a business that is located outside the United States, we may encounter risks specific to one or more countries in which we ultimately operate.
If we acquire a business that has operations outside the United States, we will be exposed to risks that could negatively impact our future results of operations following a business combination. The additional risks to which we may be exposed in any such case include but are not limited to:
Foreign currency fluctuations could adversely affect our business and financial results.
A target business with which we combine may do business and generate sales within other countries. Foreign currency fluctuations may affect the costs that we incur in such international operations. It is also possible that some or all of our operating expenses may be incurred in non-U.S. dollar currencies. The appreciation of non-U.S. dollar currencies in those countries where we have operations against the U.S. dollar would increase our costs and could harm our results of operations and financial condition.
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We estimate that the net proceeds of this offering and the private placement will be as set forth in the following table:
|
|
Without
Over-Allotment Option |
With
Over-Allotment Option Exercised |
||||||
|---|---|---|---|---|---|---|---|---|
| Gross Proceeds | ||||||||
| Gross Proceeds from units offered to the public | $ | 150,000,000 | $ | 172,500,000 | ||||
| Gross proceeds from warrants offered in the private placement | 6,000,000 | 6,000,000 | ||||||
|
|
|
|||||||
| Total gross proceeds | $ | 156,000,000 | $ | 178,500,000 | ||||
|
|
|
|||||||
| Offering Expenses(1) | ||||||||
| Underwriting discount (4.0% of gross proceeds of the public offering; excludes deferred underwriting discount of 3.0% of gross proceeds)(2) | $ | 6,000,000 | $ | 6,900,000 | ||||
| Legal fees and expenses | 400,000 | 400,000 | ||||||
| Printing and engraving expenses | 125,000 | 125,000 | ||||||
| Accounting fees and expenses | 60,000 | 60,000 | ||||||
| SEC registration fee | 34,016 | 34,016 | ||||||
| NASD filing fee | 32,290 | 32,290 | ||||||
| American Stock Exchange listing fee | 70,000 | 70,000 | ||||||
| Miscellaneous expenses | 128,694 | 128,694 | ||||||
|
|
|
|||||||
| Total offering expenses | $ | 6,850,000 | $ | 7,750,000 | ||||
|
|
|
|||||||
| Proceeds after offering expenses | $ | 149,150,000 | $ | 170,750,000 | ||||
|
|
|
|||||||
| Net proceeds held in trust account(2) | $ | 148,650,000 | $ | 170,250,000 | ||||
| Net proceeds not held in trust account | 500,000 | 500,000 | ||||||
|
|
|
|||||||
|
|
Amount
|
Percent of
Net Proceeds Not in Trust Account |
|||||
|---|---|---|---|---|---|---|---|
| Use of Net Proceeds Not Held in Trust and Up to $3,000,000 of the Interest Earned on Our Trust Account (Net of Taxes Payable) That May Be Released to Us to Cover Our Operating Expenses | |||||||
| Legal, accounting and other expenses, including due diligence expenses and reimbursement of out-of-pocket expenses incurred in connection with a business combination | $ | 1,200,000 | 34.3 | % | |||
| Legal and accounting fees relating to SEC reporting obligations | 80,000 | 2.3 | |||||
| Rent for office space(3) | $ | 280,872 | 8.0 | ||||
| Working capital to cover miscellaneous expenses, D&O insurance, potential deposits, down payments or funding of a "no shop" provision in connection with a business combination and reserves including for costs of dissolution and liquidation, if necessary | 1,939,128 | 55.4 | |||||
|
|
|
||||||
| Total(4) | $ | 3,500,000 | 100.0 | % | |||
|
|
|
||||||
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consummation of a business combination. Upon consummation of a business combination such deferred discount will be released to the underwriters and any public stockholders exercising their conversion rights out of the proceeds of this offering held in the trust account. The underwriters will not be entitled to any interest accrued on the deferred discount.
We will place $148,650,000, or $170,250,000 if the underwriters' over-allotment option is exercised in full, of the net proceeds of this offering and the private placement in a trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company, as trustee. The proceeds will not be released from the trust account until the earlier of the completion of a business combination and our liquidation. We expect to use $4,500,000 of proceeds held in the trust account to pay the deferred underwriting discount (or $5,175,000 if the over-allotment option is exercised in full), up to $3,000,000 of the interest earned on the trust account (net of taxes payable on such interest), plus $500,000 not held in the trust account to cover our operating expenses and the remaining proceeds held in the trust account as consideration to pay the sellers of a target business with which we complete a business combination. Any amounts not paid as consideration to the sellers of the target business may be used to finance operations of the target business or to effect other acquisitions, including the payment of any finders' fees or other similar costs or expenses as well as the expenses of identifying and evaluating such target business, the selection of such target business, and structuring, negotiating and consummating the business combination, or for any such other purpose, as may be determined by our board of directors at that time.
We expect that due diligence of prospective target businesses will be performed by some or all of our officers, directors or senior advisors and may include engaging market research firms and/or third party consultants. Such market research firms and/or third party consultants will be paid out of the funds allocated for due diligence. Our officers, directors and senior advisors will not receive any compensation for their due diligence of prospective target businesses, but will be reimbursed from the funds allocated for due diligence investigation for any out-of-pocket expenses (such as travel expenses) incurred in connection with such due diligence activities attendant to consummating a business transaction. To the extent funds not held in the trust account and up to $3,000,000 of interest income released to us from the trust account are insufficient to reimburse management for out-of-pocket expenses, the obligation to repay advances by management may be assumed by the resulting entity following, and subject to, the consummation of a business combination.
Our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, has advanced to us, pursuant to two separate loans, a total of $250,000, which was used to pay a portion of the expenses of this offering. The first loan, for $100,000, bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of August 1, 2007 and the consummation of this offering. The second loan, for $150,000, also bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of October 3, 2007 and the consummation of this offering. The loans will be repaid out of the proceeds of this offering not being placed in the trust account.
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We may use a portion of the working capital, including any interest released to us from the trust account, to make a deposit, down payment or fund a "no-shop" provision with respect to a particular proposed business combination, although we do not have any current intention to do so. The amount that would be used as a down payment or lock-up payment would be determined based on the terms of the specific business combination. If we are ultimately required to forfeit such funds (whether as a result of our breach of the agreement relating to such payment or otherwise), we would have less funds available to us to conduct due diligence and pay other expenses related to finding another suitable business combination and might be unable to complete a business combination without borrowing funds. If we were unable to secure additional financing, we would most likely fail to consummate a business combination in the allotted time and would be forced to liquidate. We do not anticipate paying finders' fees or other similar payments prior to the consummation of a business combination and any such payments would be made only in connection with the consummation of the business combination.
Under the tabular disclosure of "Use of Net Proceeds Not Held in Trust, and Up to $3,000,000 of the Interest Earned on Our Trust Account (Net of Taxes Payable) That May Be Released to Us to Cover Our Operating Expenses" we have included estimates of the amount of expenses that we are likely to incur in connection with: (1) legal, accounting and other expenses incurred in connection with a business combination; (2) legal and accounting fees relating to SEC reporting obligations and (3) rent for office space. As the amounts are estimates, our board may determine that it is advisable that the amount of "working capital to cover miscellaneous expenses, D&O insurance, potential deposits, down payments or funding of a 'no-shop' provision in connection with a business combination and reserves including for costs of dissolution and liquidation, if necessary," as provided for under the tabular disclosure of "Use of Net Proceeds Not Held in Trust, and Up to $3,000,000 of the Interest Earned on Our Trust Account (Net of Taxes Payable) That May Be Released to Us to Cover Our Operating Expenses" may be increased or decreased to the extent that the actual amount of legal, accounting and other expenses and rent for office space described above differs from the estimated amounts that are provided for in the table.
To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business or to acquire other businesses.
The net proceeds of this offering not held in the trust account and not immediately required for the purposes set forth above will be invested only in United States "government securities," within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less so that we are not deemed to be an investment company under the Investment Company Act. Interest income, net of taxes payable with respect to such interest, of up to $3,000,000 on the trust account balance is releasable to us from the trust account to fund a portion of our working capital and other requirements. Following completion of this offering, we believe the funds available to us from outside the trust account, together with interest income (net of taxes on such income) of up to $3,000,000 on the balance of the trust account to be released to us for working capital and other requirements, will be sufficient to allow us to operate for at least the next 24 months, assuming a business combination is not completed during that time. However, there is no assurance that the net proceeds not held in trust will be sufficient to cover the expenses attendant to consummating a business combination.
No compensation of any kind (including finder's and consulting fees) will be paid by us, Oenoke Partners, LLC or any of our respective affiliates to any of our officers, directors or senior advisors or any of their affiliates, for services rendered to us prior to or in connection
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with the consummation of the business combination. However, our officers, directors, senior advisors and affiliates will be reimbursed for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. To the extent that such expenses exceed the available proceeds not deposited in the trust account or released to us from the trust account described above, we would not reimburse such out-of-pocket expenses unless we consummate a business combination. It is possible that certain of our officers, directors or senior advisors may be employed or retained by a target business after the business combination in some capacity. However, since the role of any of those individuals after a business combination is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after a business combination.
A public stockholder will be entitled to receive funds from the trust account (including interest earned on his, her or its portion of the trust account) only in the event of our liquidation of our trust account as part of our plan of dissolution and distribution or if that public stockholder were to seek to convert such shares into cash in connection with a business combination which such public stockholder voted against and which we consummate. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.
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The difference between the public offering price per share of common stock, assuming no value is attributed to the warrants included in the units, and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of common stock which may be converted into cash), by the number of outstanding shares of our common stock.
At November 30, 2006, our net tangible book value was a deficiency of $708,698, or approximately $(0.15) per share of common stock. After giving effect to the private placement and this offering's sale of 18,750,000 shares of common stock included in the units, and the deduction of underwriting discount and estimated expenses of this offering, our pro forma net tangible book value (as decreased by the value of 3,749,999 shares of common stock which may be converted into cash) at November 30, 2006 would have been $114,253,282, or $5.80 per share, representing an immediate increase in net tangible book value of $5.95 per share to the existing stockholders and an immediate dilution of $2.20 per share, or 27.46%, to new investors not exercising their conversion rights.
For purposes of presentation, our pro forma net tangible book value after this offering is $29,729,992 less than it otherwise would have been because, if we effect a business combination, the conversion rights of the public stockholders may result in the conversion into cash of up to 3,749,999 (approximately 19.99%) of the aggregate number of the shares of common stock sold in this offering at a per share conversion price equal to the amount in the trust account, plus the amount of the deferred underwriting discount, net of income taxes payable on the interest income on the trust account, calculated as of two business days prior to the actual consummation of the proposed business combination, divided by the number of shares sold in this offering.
In addition, investors in this offering may be subject to additional dilution in the event that any holders of warrants (including warrants purchased in the private placement) exercise their warrants in exchange for shares of common stock.
The following table illustrates the dilution to the new investors on a per share basis, assuming no value is attributed to the warrants included in the units:
| Public offering price | $ | 8.00 | |||||
| Net tangible book value before this offering | $ | (0.15 | ) | ||||
| Increase attributable to new investors | 5.95 | ||||||
|
|
|||||||
| Pro forma net tangible book value after this offering | 5.80 | ||||||
|
|
|||||||
| Dilution to new investors | $ | 2.20 | |||||
|
|
|||||||
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The following table sets forth information with respect to our existing stockholders, the purchaser of units in the private placement that will occur prior to the completion of this offering, and the new investors:
|
|
Shares Purchased
|
Total Consideration
|
|
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
Average
Price Per Share |
|||||||||||
|
|
Number
|
Percentage
|
Amount
|
Percentage
|
||||||||
| Existing stockholders | 4,687,500 | (1) | 20 | % | $ | 4,688 | .003 | % | $ | 0.001 | ||
| New investors | 18,750,000 | 80 | % | 150,000,000 | 99.997 | $ | 8.000 | |||||
|
|
|
|
|
|||||||||
| Total | 23,437,500 | 100 | % | $ | 150,004,688 | 100 | % | |||||
|
|
|
|
|
|||||||||
The pro forma net tangible book value after this offering is calculated as follows:
| Numerator: | |||||
| Net tangible book value before this offering and the private placement | $ | (666,726 | ) | ||
| Net proceeds from the private placement | 6,000,000 | ||||
| Net proceeds from the public offering | 143,150,000 | ||||
| Less: Deferred underwriter's fee paid upon consummation of a business combination | (4,500,000 | ) | |||
| Less: proceeds held in trust subject to conversion to cash ($7.93 × 3,749,999 shares) | (29,729,992 | ) | |||
|
|
|||||
| $ | 114,253,282 | ||||
|
|
|||||
| Denominator: | |||||
| Shares of common stock outstanding prior to this offering | 4,687,500 | (1) | |||
| Shares of common stock included in the units offered | 18,750,000 | ||||
| Less: shares subject to conversion | (3,749,999 | ) | |||
|
|
|||||
| 19,687,501 | |||||
|
|
|||||
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The following table sets forth our capitalization at November 30, 2006 and as adjusted to give effect to the private placement, the sale of our units in this offering and the application of the estimated net proceeds derived from the sale of our warrants in the private placement and the sale of warrants and units in this offering:
|
|
November 30, 2006
|
|||||||
|---|---|---|---|---|---|---|---|---|
|
|
Actual
|
As Adjusted
|
||||||
| Note payable to our principal stockholder | $ | 250,000 | $ | — | ||||
| Underwriter Fee Payable | $ | — | $ | 4,500,000 | ||||
| Common stock, $0.001 par value, 0 and 3,749,999 shares that are subject to possible conversion at conversion value | $ | — | $ | 29,729,992 | ||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized; none issued or outstanding | $ | — | $ | — | ||||
| Common stock, $0.001 par value, 75,000,000 shares authorized; 4,687,500 shares issued and outstanding, actual; 19,687,501 shares issued and outstanding (excluding 3,749,999 (approximately 19.99%) shares subject to possible conversion), as adjusted | $ | 4,688 | $ | 19,688 | ||||
| Additional paid-in capital | 114,261,201 | |||||||
| Deficit accumulated during the development stage | (27,607 | ) | (27,607 | ) | ||||
|
|
|
|||||||
| Total stockholders' equity (deficit) | $ | (22,919 | ) | $ | 114,253,282 | |||
|
|
|
|||||||
| Total capitalization | $ | 227,081 | $ | 148,483,274 | ||||
|
|
|
|||||||
If we consummate a business combination, the conversion rights afforded to our public stockholders may result in the conversion into cash of up to 3,749,999 (approximately 19.99%) of the aggregate number of shares sold in this offering at a per share conversion price equal to the amount in the trust account, plus the amount of the deferred underwriting discount, net of (1) income taxes payable on the interest income on the trust account and (2) up to $3,000,000 of interest income on the trust account balance, net of income taxes payable on this amount, released to us to fund working capital requirements, each calculated as of two business days prior to the actual consummation of the proposed business combination, divided by the number of shares sold in this offering.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We were formed on July 20, 2006 for the purpose of effecting a merger, capital stock exchange, asset or stock acquisition or other similar business combination with one or more domestic or international operating businesses. We intend to utilize cash derived from the proceeds of this offering and the private placement, our capital stock, debt or a combination of cash, capital stock and debt, in effecting a business combination.
We have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through offerings of our equity securities.
We estimate that the net proceeds from this offering and the private placement, after deducting offering expenses of approximately $6,850,000 (or $7,750,000 if the underwriters' over-allotment option is exercised in full), including underwriting discount (other than the deferred underwriters' discount of $4,500,000, or $5,175,000 if the underwriters' over-allotment option is exercised in full), will be approximately $149,150,000, or $170,750,000 if the underwriters' over-allotment option is exercised in full. Of this amount, $148,650,000, or $170,250,000 if the underwriters' over-allotment option is exercised in full, will be held in the trust account and the remaining $500,000 will not be held in the trust account. We expect to use $4,500,000, or $5,175,000 if the underwriters' over-allotment is exercised in full, of the remaining proceeds held in the trust account to pay the deferred underwriting discount and up to $3,000,000 of the interest earned on the trust account (net of taxes payable on such interest) to satisfy our operating expenses, and the remaining proceeds held in the trust account to acquire a target business, including the payment of any finders' fee or other similar payments, as well as the expenses of identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business, to acquire other businesses or for any such other purposes as may be determined by our board of directors at the time. We believe that, upon consummation of this offering, the funds available to us outside of the trust account, together with interest income (net of taxes) of up to $3,000,000 on the balance of the trust account releasable to us, will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. Over this time period, we anticipate paying approximately (1) $1,200,000 for legal, accounting, due diligence and other expenses related to a business combination, (2) $80,000 for legal and accounting fees relating to our SEC reporting obligations, (3) $280,872 for rent for office space and (4) $1,939,128 for miscellaneous expenses and reserves including the cost of dissolution and reserves, if any, which we currently estimate to be approximately $50,000 to $75,000.
In the event the underwriters purchase option is exercised, the effect such exercise would have on our financial condition and results of operation would be an increase in the amount of available cash we would have immediately following such exercise.
Based upon the foregoing projections, we do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination. However, we may need to raise additional funds through a private offering of debt or equity securities if such funds are required to consummate a business combination that is presented to us although we have not entered into any such arrangement and have no current intention of doing so. We would only
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consummate such a financing simultaneously with the consummation of a business combination.
On August 2, 2006, our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, advanced to us a total of $100,000, which was used to pay a portion of the expenses of this offering. The loan bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of August 1, 2007 and the consummation of this offering. The loan will be repaid out of the proceeds of this offering not being placed in the trust account.
On October 3, 2006, our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, made a second advance to us for a total of $150,000, which was used to pay a portion of the expenses of this offering. This second loan also bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of October 3, 2007 and the consummation of this offering. This loan will be repaid out of the proceeds of this offering not being placed in the trust account.
We have agreed to sell to the underwriters, for $100, an option to purchase up an aggregate of 937,500 units. The exercise price for the units issuable upon exercise of the underwriters' unit purchase option was determined through negotiations between us and the underwriters. Following such negotiations, we agreed that the exercise price of the units underlying the unit purchase option should reflect a twenty percent premium over the price of the units issued in the initial public offering. We will account for this purchase option as a cost of raising capital. We have estimated, based upon a Black-Scholes option pricing model, that the fair value of the purchase option on the date of grant is approximately $3.3 million, using an expected life of 4 years, volatility of 58.8%, and a risk-free rate of 4.61%. However, because our units do not have a trading history, the volatility is based on assumptions by management.
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Overview
We are a blank check company organized under the laws of the State of Delaware on July 20, 2006. We were formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses. Our efforts in identifying a prospective target will not be limited to a particular industry, although we intend to focus our efforts on the information services industry, including business, media, marketing and consumer information opportunities. These opportunities may be in major industry segments such as consumer products, retail, financial services, media, marketing, healthcare, government and technology. We intend to identify acquisition opportunities where we can apply management's experience within these segments to enhance the value of the acquired company's product and service offerings.
Although we intend to focus on identifying acquisition candidates in the information services industry and we will not initially actively seek to identify acquisition candidates in other industries, in the event that an opportunity is presented to us in another industry, we may consider pursuing that opportunity if we conclude that it represents an attractive investment opportunity. In addition, if we are unable to identify an acquisition candidate which we deem to be attractive in the information services industry after having expended a reasonable amount of time and effort to identify such a candidate, we may then decide to more actively seek opportunities in other industries. At present, we are not able to ascertain (i) what opportunities, if any, in industries outside of the target industry may be presented to us, (ii) how much time and effort we may expend prior to determining that we may not be able to identify favorable investment opportunities in the information services industry or (iii) which other industries we may choose to examine with the objective of identifying a favorable investment opportunity. In the event we elect to pursue an investment outside of the target industry, we expect that our management, in conjuction with our board of directors and senior advisors, will engage in discussions to identify, based upon their respective familiarity with the business climate in general and specific industries in particular, one or more other industries which are likely to include a significant number of companies which would be suitable acquisition candidates. Once having identified such industry or industries, we would make known our interest in those industries to investment bankers and others who we believe may be able to identify companies in such industry or industries that may be candidates for a transaction.
We do not currently have any specific operating businesses under consideration. We have not identified or been provided with the identity of, or had any direct or indirect contact with potential targets, including businesses associated with VNU. Further, we have not analyzed whether we might be interested in pursuing the acquisition of any other VNU business units if such business units are offered for sale in the future. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable target, although we may do so following the offering. To date, our efforts have been limited to organizational activities and activities related to this offering.
Our management brings extensive experience with global operations, mergers and acquisitions, acquisition integration, and financial and legal expertise with leading firms in the information services industry. Our Chairman and CEO, Michael Connors, most recently served as Chairman and CEO of VNU's Media Measurement and Information (MMI) Group. VNU is a leading global information and media company. In 2001, Mr. Connors was instrumental in creating the MMI Group, which comprises VNU's media information, entertainment, software and internet businesses, including Nielsen Media Research, Nielsen Entertainment and
43
NetRatings. In addition to leading the MMI Group, Mr. Connors served as chairman of VNU World Directories, which included VNU's Yellow Pages and directory businesses operating in seven countries. Mr. Connors also served as a member of the VNU Executive Board. Prior to joining VNU, Mr. Connors was Vice Chairman of ACNielsen Corporation, one of the world's largest marketing information services companies, where he helped lead the turnaround of ACNielsen into a profitable company. During his leadership, ACNielsen's equity value grew from $893 million, its market capitalization immediately following its spinoff in November, 1996 from The Dun & Bradstreet Corporation (D&B), to $2.3 billion, its sale price to VNU in February, 2001. After the acquisition of ACNielsen by VNU in 2001, Mr. Connors led the successful integration of ACNielsen into VNU. Prior to that, as Senior Vice President of D&B, Mr. Connors played a key role in the breakup of D&B into three separate publicly traded companies. Prior to its breakup, D&B owned, among others, the following companies in the information services industry: Moody's Investors Service, Inc., R.H. Donnelley, IMS Health, ACNielsen Corporation, Nielsen Media Research, D&B Credit Services and a majority stake in Gartner Group. At the time of its breakup, D&B was one of the largest data and information companies in the world.
Frank Martell, our Executive Vice President, Chief Financial Officer and Treasurer, also has extensive experience in the information services industry. Until December 2006, Mr. Martell was the Chief Operating Officer of ACNielsen Corporation and Chief Executive Officer of ACNielsen Europe and Emerging Markets. He spent the previous 11 years with VNU, ACNielsen and D&B serving in a series of global financial and senior operating positions. Earl Doppelt, our Executive Vice President, General Counsel and Corporate Secretary, served as Executive Vice President and Chief Legal Officer of VNU, a leading global information and media company, until November 2006. He spent the previous 12 years with VNU, ACNielsen and D&B. Along with Mr. Connors, Mr. Doppelt was part of the executive team that led the turnaround of ACNielsen into a profitable company. Richard Gould, our Executive Vice President, was with Morgan Stanley until October 2006, where, during a 20-year career, he held several executive positions in capital markets, global sales management, marketing and new product innovation. Most recently, Mr. Gould served as co-head of Morgan Stanley's North America Equity Distribution as well as head of Global Derivatives Sales, Quantitative Research and the Global Pensions Group.
We believe, based on our management's experience in the target industry, that the projected demand for products and services in the information services industry presents attractive opportunities for consolidation and growth. The information services industry encompasses companies which create, produce, deliver, distribute and/or market products and services including:
44
Although we may effect business combinations with companies operating in any industry we choose, (including companies operating outside of the target industry under the circumstances described above) we believe that there are numerous business opportunities in the industries on which we will be focused. However, we have not conducted any research with respect to identifying the number and characteristics of the potential business combination candidates within our targeted industry, or any industry, or the likelihood or probability of success of any proposed business combination. Accordingly, we cannot assure you that we will be able to locate a target business or that we will be able to engage in a business combination with a target business on favorable terms, or at all.
Industry Overview and Trends
According to Veronis Suhler Stevenson ("VSS"), the Professional Business and Information Services market, including the marketing information services sector, was a $125 billion market in 2005. According to VSS, in 2005 the marketing information services sector was a $29 billion market encompassing market research firms, monitoring services, and organizations that provide tracking and measurement of usage, price and product trends. According to VSS, this sector grew at a compound annual rate of 7.3% from 2000 to 2005 and is projected to grow at a compound annual rate of approximately 7.9% through 2010. We intend to focus on business, media, marketing and consumer information opportunities within this sector.
Management expects, based upon their experience in the target industry, strong growth in the information services industry as a result of several trends, including:
45
We believe that in this environment, our management team, senior advisors and board of directors will be able to leverage their extensive industry experience, knowledge and contacts to source and execute an acquisition.
Our Competitive Advantages
We believe we possess several competitive advantages to source, evaluate and execute business combinations in our target industries, including the following:
Global experience in the information services industry. Our management brings extensive experience with global operations, mergers and acquisitions, acquisition integration, and financial experience with leading firms in the information services industry. Our Chairman and CEO, Michael Connors, was Vice Chairman of ACNielsen Corporation, where he helped lead the turnaround of ACNielsen into a profitable company. During his leadership, ACNielsen's equity value grew from $893 million, its market capitalization immediately following its spinoff in November, 1996 from The Dun & Bradstreet Corporation (D&B), to $2.3 billion, its sale price to VNU in February, 2001. Mr. Connors led the successful integration of ACNielsen into VNU, becoming Chairman and CEO of VNU's Media Measurement & Information Group and a member of VNU's Executive Board. Our Executive Vice President, Chief Financial Officer and Treasurer, Frank Martell, and our Executive Vice President, General Counsel and Corporate Secretary, Earl Doppelt, also played major roles in the turnaround of ACNielsen Corporation and its successful integration into VNU.
Extensive global contact and deal sourcing network. Our management, senior advisors and board of directors have considerable contacts in the information services industry that will enable us to not only identify attractive business combination candidates, but also to recruit appropriate management once an acquisition has been completed.
Operational and financial expertise. Our management has extensive experience in operating, acquiring and integrating, and growing companies in our targeted industries. We believe this will enable us to enhance the value of our acquisitions by adding strategic vision, operational and financial discipline, technology implementation, new product development and other corporate development initiatives.
Attractive market opportunities. Although we have not yet identified any specific business combination candidates, we believe there are numerous candidates within the information services industry that present opportunities for acquisition and value enhancement by our management team. Further, we believe there will be incremental opportunities for our team to complement existing operations with add-on acquisitions and product development efforts.
Effecting a Business Combination
General
We were formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses. We are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds of this offering as well as our existing cash, our capital stock, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of this offering are intended to be generally applied toward effecting a business combination as described in this prospectus, the proceeds are not otherwise being designated for any more specific purposes.
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Accordingly, prospective investors will invest in us without an opportunity to evaluate the specific merits or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various Federal and state securities laws.
We have not identified a target business
To date, we have no specific business combination under consideration or contemplation and we have not, nor has anyone on our behalf contacted, any potential target business. Subject to the limitation that our initial business combination must have a fair market value of at least 80% of our net assets at the time of the acquisition (all of our assets, including the funds held in the trust account other than the deferred underwriting discount, less our liabilities), as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective business combination candidate. In addition, because there is no limitation on our ability to raise additional capital through equity placements or through loans, we may be able to acquire a company with a fair market value in an amount greater than 80% of our net assets at the time. We can also satisfy the requirement that the business combination have a fair market value at least equal to 80% of our net assets in an acquisition transaction where we acquire less than a 100% interest in the target business, provided that the fair market value of the interest in such business or businesses is at least equal to 80% of our net assets at the time such acquisition transaction is consummated.
Sources of target business
Although we have not yet identified any business combination candidates, we believe that there are numerous candidates available in our targeted sectors. We anticipate that target business candidates will be brought to our attention by various unaffiliated sources, including corporations with non-core assets they may desire to monetize, securities broker/dealers, investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community, who may present solicited or unsolicited proposals. Our existing stockholders, including all of our officers, directors and senior advisors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, and have no arrangements or understanding, preliminary or otherwise, with respect to such engagements, we may engage these firms or other individuals in the future, in which event we may pay a finder's fee or other compensation to be determined in arm's length negotiations. In no event will any of our existing officers, directors, senior advisors or any entity with which any of them is affiliated be paid by us, Oenoke Partners, LLC or any of our respective affiliates any finder's fee or other compensation, for services rendered to us prior to or in connection with the consummation of a business combination.
Selection of a target business and structuring of a business combination
We have not established any specific criteria (financial or otherwise) for prospective target businesses. In evaluating a prospective target business, our management will consider, among other factors, the following:
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These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating all prospective target businesses, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which will be made available to us. We will also seek to have all prospective target businesses execute agreements with us waiving any right, title or claim to any monies held in the trust account.
We believe it is possible that our attractiveness as a potential buyer of businesses may increase after the consummation of an initial transaction and there may or may not be additional acquisition opportunities as we grow and integrate our acquisitions. We may or may not make future acquisitions. To the extent we are able to identify multiple acquisition targets and options as to which business or assets to acquire as part of an initial transaction, we intend to seek to consummate the acquisition which is most attractive and provides the greatest opportunity for creating stockholder value. The determination of which entity is the most attractive would be based on our analysis of a variety of factors, including whether such acquisition would be in the best interests of our stockholders, the purchase price, the terms of the sale, the perceived quality of the assets and the likelihood that the transaction will close.
The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination.
Fair market value of target business
The initial target business that we acquire must have a fair market value equal to at least 80% of our net assets at the time of such acquisition (all of our assets, including the funds held in the trust account other than the deferred underwriting discount, less our liabilities), although we may acquire a target business whose fair market value significantly exceeds 80% of our net assets. We can also satisfy the requirement that the business combination have a fair market value at least equal to 80% of our net assets in an acquisition transaction where we acquire less than a 100% interest in the target business, provided that the fair market value of the interest in such business or businesses is at least equal to 80% of our net assets at the time such acquisition transaction is consummated. In order to consummate such an acquisition, we may issue a significant amount of debt or equity securities to the sellers of
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such business and/or seek to raise additional funds through a private offering of our debt or equity securities. Since we have no specific business combination under consideration, we have not entered into any such fund raising arrangements and have no current intention of doing so. The fair market value of such business will be determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential sales, earnings and cash flow and book value. If our board is not able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent third party appraiser, which may or may not be an investment banking firm that is a member of the National Association of Securities Dealers, Inc. with respect to the satisfaction of such criteria. Since any opinion, if obtained, would merely state that fair market value meets the 80% of net assets threshold, it is not anticipated that copies of such opinion would be distributed to our stockholders, although copies will be provided to stockholders who request it. We will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors independently determines that the target business has sufficient fair market value.
Limited ability to evaluate the target business' management
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we cannot assure you that our assessment of the target business' management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills, qualifications or abilities to manage a public company.
Opportunity for stockholder approval of business combination
Prior to the completion of a business combination, we will submit the transaction to our stockholders for approval, even if the nature of the acquisition is such as would not ordinarily require stockholder approval under applicable state law. In connection with seeking stockholder approval of a business combination, we will furnish our stockholders with proxy solicitation materials prepared in accordance with the Securities Exchange Act of 1934, as amended, which, among other matters, will include a description of the operations of the target business and audited historical financial statements of the business.
In connection with the vote required for any business combination, all of our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, have agreed to vote the shares of common stock then owned by them in accordance with the majority of the shares of common stock voted by the public stockholders. We will proceed with a business combination only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination and public stockholders owning less than 20% of the shares sold in this offering both exercise their conversion rights and vote against the business combination. Voting against the combination alone will not result in conversion of shares into the conversion price.
Upon the completion of our business combination, unless required by Delaware law, the federal securities laws, and the rules and regulations promulgated thereunder, or the rules and regulations of an exchange upon which our securities are listed, we do not presently intend to seek stockholder approval for any subsequent acquisitions.
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Conversion rights
At the time we seek stockholder approval of any business combination, we will offer each public stockholder, other than our existing stockholders, the right to have such stockholder's shares of common stock converted to cash if the stockholder votes against the business combination and the business combination is approved and completed. The conversion rights do not apply to shares outstanding prior to this offering. The actual per-share conversion price will be equal to the amount in the trust account, including a pro rata share of the deferred underwriting discount and net of (1) income taxes payable on the interest income on the trust account and (2) up to $3,000,000 of interest income earned on the trust account balance, net of income taxes payable on this amount, released to us to fund working capital requirements, each calculated as of two business days prior to the consummation of the actual business combination), divided by the number of shares sold in this offering. Without taking into any account interest earned on the trust account or taxes payable on such interest, the initial per-share conversion price would be $7.93 or $0.07 less than the per unit offering price of $8.00. Because the initial per share conversion price is $7.93 per share (plus any interest net of taxes payable), which may be lower than the market price of the common stock on the date of the conversion, there may be a disincentive on the part of public stockholders to exercise their conversion rights.
An eligible stockholder may request conversion at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed business combination at a meeting held for that purpose, but the request will not be granted unless the stockholder votes against the business combination and the business combination is approved and completed. Any request for conversion, once made, may be withdrawn at any time up to the date of the meeting. It is anticipated that the funds to be distributed to stockholders entitled to convert their shares who elect conversion will be distributed as soon as reasonably practicable after completion of a business combination. Public stockholders who convert their stock into their portion of the trust account will have the right to exercise the warrants that they received as part of the units.
Plan of dissolution and distribution if no business combination
Pursuant to the terms of the trust agreement between us and Continental Stock Transfer & Trust Company, and only as part of any plan of dissolution and distribution in accordance with the applicable provisions of the DGCL if we do not complete a business combination within 18 months after the consummation of this offering, or within 24 months if the extension criteria described below have been satisfied, we will dissolve and liquidate and distribute only to our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount in the trust account, inclusive of any interest (net of taxes payable). If we enter into either a letter of intent, an agreement in principle or a definitive agreement to complete a business combination prior to the expiration of 18 months after the consummation of this offering, but are unable to complete the business combination within the 18-month period, then we will have an additional six months in which to complete the business combination contemplated by the letter of intent, agreement in principle or definitive agreement. In the event we seek stockholder approval for a plan of dissolution and distribution and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. Pursuant to the terms of our amended and restated certificate of incorporation, our board must take such actions necessary to dissolve after the expiration of those time periods (assuming that there has been no business combination consummated), and furthermore, our powers following the expiration of the permitted time periods for consummating a business combination will automatically thereafter be limited to
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acts and activities relating to dissolving and winding up our affairs, including liquidation. We view this obligation to dissolve and liquidate as an obligation to our stockholders and neither we nor our board of directors will take any action to amend or waive any provision of our amended and restated certificate of incorporation to allow us to survive for a longer period of time if it does not appear we will be able to consummate a business combination within the foregoing time periods. If we do not consummate a business combination, the funds held in our trust account may not be distributed except to our stockholders upon our dissolution and, unless and until such approval is obtained from our stockholders, the funds held in our trust account will not be released. Consequently, holders of a majority of our outstanding stock must approve our dissolution in order to receive the funds held in our trust account and the funds will not be available for any other corporate purpose. As soon as reasonably practicable upon the approval by our stockholders of our plan of dissolution and distribution, we will liquidate our trust account to our public stockholders. Our existing stockholders have waived their rights to participate in any liquidation of our trust account in connection with our dissolution with respect to shares of common stock owned by them immediately prior to this offering and to vote their shares of common stock in favor of any plan of dissolution and distribution which we will submit to a vote of our stockholders. Upon the liquidation of our trust account as part of our dissolution, the underwriters have agreed to waive any right they may have to the $4,500,000 of deferred underwriting discount (or $5,175,000 if the over-allotment option is exercised in full) held in the trust account. There will be no distribution from the trust account with respect to our warrants, which will expire worthless. We will pay the costs of dissolution, which we currently estimate to be approximately $50,000 to $75,000, from our remaining assets outside of the trust account or, if necessary, from funds of up to $3,000,000 available from interest income on the trust account. To the extent such funds are not available, Oenoke Partners, LLC has agreed to advance us the necessary funds and has agreed not to seek repayment of such expenses, though it has not taken a reserve for this possibility and there can be no assurance that it will be able to meet its obligations under this agreement.
If we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share liquidation price would be $7.93 or $0.07 less than the per unit offering price of $8.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which could be prior to the claims of our public stockholders. We cannot assure you that the actual per-share liquidation price will not be less than $7.93, plus interest (net of taxes payable, which taxes, if any, shall be paid from the trust account and net of any amounts that may have been released to us to pay our expenses), due to claims of creditors. Although we will seek to have all vendors, prospective target businesses or other entities we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with a claim against our assets, including the funds held in the trust account. If any third party refused to execute an agreement waiving such claims to the monies held in the trust account, we would analyze the alternatives available to us if we chose not to engage such third party and evaluate if such engagement would be in the best interest of our stockholders if such third party refused to waive such claims. Examples of possible instances where we may engage a third party that refused to execute a waiver include the engagement of a third party consultant whose particular
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expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a provider of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives available to it and would only enter into an agreement with a third party that did not execute a waiver if management believed that such third party's engagement would be significantly more beneficial to us than any alternative. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
If we are unable to complete a business combination and are forced to liquidate, each of our executive officers has jointly and severally agreed to reimburse us for our debts to vendors for services rendered or products sold to us, if we do not obtain a valid and enforceable waiver from that vendor of its rights or claims to the trust account and only to the extent necessary to ensure that such claims do not reduce the amount in the trust account. However, we cannot assure you that our executive officers will be able to satisfy those obligations. Based on the information provided to us in the director and officer questionnaires provided to us in connection with this offering as well as the representations as to their accredited investor status (as such term is defined in Regulation D), we currently believe that such persons are of substantial means and capable of funding their indemnity obligations, even though we have not asked them to reserve for such an eventuality. However, we cannot assure you that our executive officers will be able to satisfy those obligations. We believe the likelihood of our executive officers having to indemnify the trust account is limited because we intend to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claims of any kind in or to monies held in the trust account.
We also will have access to $500,000 in funds available outside the trust account and up to $3,000,000 available from the interest earned on the funds in the trust account with which to pay any such potential claims (including costs and expenses incurred in connection with our plan of dissolution and distribution currently estimated at approximately $50,000 to $75,000). In the event that the board recommends and our stockholders approve a plan of dissolution and distribution where it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received a return of funds from the liquidation of our trust account could be liable for claims made by creditors.
Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the funds held in our trust account will be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account we cannot assure you we will be able to return to our public stockholders the liquidation amounts due them.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
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However, we will seek stockholder approval to liquidate our trust account to our public stockholders as soon as reasonably practicable as part of our plan of dissolution and distribution and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them in a dissolution and any such liability of our stockholders will likely extend beyond the third anniversary of such dissolution. Because we will not be complying with Section 280, we will seek stockholder approval to comply with Section 281(b) of the DGCL, requiring us to adopt a plan of dissolution and distribution that will provide for our payment or provision, based on facts known to us at such time, of (i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against us within the subsequent 10 years. All such claims (whether existing, pending or that may be potentially brought against us in the next 10 years) will be paid or provided for prior to any distribution of the funds held in the trust account to our stockholders. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims (whether existing, pending or that may be potentially brought against us within the subsequent 10 years) to arise would be from our vendors (such as accountants, lawyers, investment bankers or other advisors) or potential target businesses. As described above, we intend to have all vendors and prospective target businesses execute agreements with us waiving any right, title, interest or claim (whether existing, pending or that may be potentially brought against us within the subsequent 10 years) of any kind in or to any monies held in the trust account. As a result of this, the claims (whether existing, pending or that may be potentially brought against us within the subsequent 10 years) that could be made against us are significantly limited and the likelihood that any claim (whether existing, pending or that may be potentially brought against us within the subsequent 10 years) that would result in any liability extending to the trust account is minimal.
We currently believe that any plan of dissolution and distribution subsequent to the expiration of the 18 and 24 month deadlines would proceed in the following manner:
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Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of a business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
earned on the trust account (net of taxes payable on this interest) may be released to us to cover a portion of our operating expenses;
Our amended and restated certificate of incorporation requires that we obtain unanimous consent of our stockholders to amend the above-described provisions. However, the validity of unanimous consent provisions under Delaware law has not been settled. A court could conclude that the unanimous consent requirement constitutes a practical prohibition on amendment in violation of the stockholders' implicit rights to amend the corporate charter. In
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that case, the above-described provisions would be amendable without unanimous consent and any such amendment could reduce or eliminate the protection afforded to our stockholders. However, we view the foregoing provisions, including the requirement that the public stockholders owning less than 20% of the shares sold in this offering exercise their conversion rights in order for our initial business combination to be consummated, as obligations to our stockholders, and we will not take any action to waive or amend any of these provisions, including by seeking to amend our certificate of incorporation to increase or decrease this threshold.
Competition for Target Businesses
In identifying, evaluating, and selecting a target business for a business combination, we expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking acquisitions. Many of these individuals and entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target acquisitions that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target acquisitions will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing a target acquisition. Further, the following may not be viewed favorably by certain target acquisitions:
Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately held entities having a similar business objective as ours in acquiring a target acquisition with significant growth potential on favorable terms.
If we succeed in effecting a business combination, there will be, in all likelihood, competition from competitors of the target acquisition. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete effectively.
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We intend to maintain our executive offices at Four Stamford Plaza, 107 Elm St., Stamford, Connecticut 06902. We consider this office space to be adequate for our current operations. We currently pay rent in an amount equal to $10,203.00 per month pursuant to a lease agreement with CT–Four Stamford Plaza, LLC, an unaffiliated entity. We do not share our space at our executive offices.
Employees
We have four officers, one of whom, Michael P. Connors, is also a member of our board of directors. None of our officers is obligated to devote any specific number of hours to our business and each intends to devote only as much time as he deems necessary to our business. We do not intend to have any full-time employees, other than those employed merely in an administrative capacity, prior to the consummation of a business combination. For a more complete discussion regarding our officers and their background, see the section below entitled "Management."
Periodic Reporting and Audited Financial Statements
We will register our units, common stock and warrants under the Securities Exchange Act of 1934, as amended, and have reporting obligations, including the requirement that we file annual quarterly and current reports with the SEC. In accordance with the requirements of the Securities Exchange Act of 1934, as amended, our annual reports will contain financial statements audited and reported on by our independent accountants.
We will not effect a business combination if audited financial statements complying with United States securities laws cannot be obtained for the target business because we will be required to provide those financial statements as part of the proxy solicitation materials sent to stockholders to assist them in assessing the target business. Our management believes that the requirement of having available audited financial statements for the target business will not materially limit the pool of potential target businesses available for acquisition.
Legal Proceedings
To the knowledge of management, there is no litigation currently pending or contemplated against us or any of our officers or directors in their capacity as such. Robert J. Chrenc, one of our directors, is also a director of Symbol Technologies Inc. Mr. Chrenc, together with 10 other current and former officers and directors of that company, has been named as a defendant in several purported shareholder derivative lawsuits, as disclosed in Symbol's public filings. Among other things, the lawsuits allege that the defendants failed to cause Symbol to improve its internal controls.
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Comparison to Offerings of Blank Check Companies
The following table compares and contrasts the terms of our offering and the terms of an offering of a blank check company under Rule 419 promulgated by the SEC assuming that the gross proceeds, underwriting discount and underwriting expenses for the Rule 419 offering are the same as this offering. None of the terms of a Rule 419 offering will apply to this offering. The following table includes the proceeds from the private placement.
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|
Terms of Our Offering
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Terms Under a Rule 419 Offering
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|---|---|---|---|---|
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Escrow of offering proceeds |
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$148,650,000 (or $170,250,000 if the underwriters' over-allotment option is exercised in full) of the net offering and private placement proceeds, including the deferred underwriting discount, will be deposited into a trust account at Deutsche Bank Trust Company Americas maintained by Continental Stock Transfer & Trust Company, acting as trustee. |
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$125,550,000 (or $144,382,500 if the underwriters' over-allotment option is exercised in full) of the offering proceeds from the public offering would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account. |
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Investment of net proceeds |
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The $148,650,000 (or $170,250,000 if the underwriters' over-allotment option is exercised in full) of net offering and private placement proceeds held in trust will be invested only in U.S. "government securities," within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having maturity of 180 days or less. |
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. |
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Limitation on fair value or net assets of target business |
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The initial target business that we acquire must have a fair market value equal to at least 80% of our net assets at the time of such acquisition (all of our assets, including the funds held in the trust account other than the deferred underwriting discount, less our liabilities). |
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We would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the maximum offering proceeds. |
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Trading of securities issued |
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The units may commence trading on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the underwriters' over-allotment option and (2) its exercise in full, subject in either case to our having filed a Form 8-K with audited financial statements with the SEC and having issued a press release announcing when such separate trading will begin. Following the date the common stock and warrants are eligible to trade separately, the units will continue to be listed for trading on the American Stock Exchange and any stockholder may elect to trade the common stock or warrants separately or as a unit. |
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No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. |
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Exercise of the warrants |
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The warrants cannot be exercised until the later of the completion of a business combination and one year from the date of this prospectus and, accordingly, will be exercised only after the trust account has been terminated and distributed. |
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. |
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Election to remain an investor |
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We will give our stockholders the opportunity to vote on our initial business combination. In connection with seeking stockholder approval, we will send each stockholder a proxy statement containing information required by the SEC. A stockholder following the procedures described in this prospectus will have the right to convert his or her shares into the conversion price. However, a stockholder who does not follow these procedures or a stockholder who does not take any action will not be entitled to the return of any funds. |
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After an acquisition becomes probable and a post-effective amendment a containing information required by the SEC (including pro forma financial information) has been filed, a prospectus would be sent to each investor. Each investor would be given the opportunity to notify the company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account must be returned to all investors and none of the securities would be issued. |
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Business combination deadline |
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A business combination must occur within 18 months after the consummation of this offering or within 24 months after the consummation of this offering if a letter of intent or definitive agreement relating to the prospective business combination was entered into prior to the end of the 18-month period. If a business combination does not occur within these time frames our purposes and powers will be limited to dissolving, liquidating and winding up. |
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If an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors. |
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Release of funds |
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Except with respect to interest income, net of income taxes on such interest, of up to $3,000,000 on the balance in the trust account released to us to fund working capital requirements, proceeds held in the trust account will not be released until the earlier of the completion of a business combination and our dissolution and liquidation upon our failure to effect a business combination within the allotted time. While we intend, in the event of our dissolution and distribution, to distribute funds from our trust account to our public stockholders as soon as reasonably practicable pursuant to our stockholder- approved plan of dissolution and distribution, the actual time at which our public stockholders receive their funds will be longer than the five business days required under Rule 419. |
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The proceeds held in the escrow account would not be released until the earlier of the completion of a business combination and the failure to effect a business combination within 18 months. In the event a business combination was not consummated within 18 months, proceeds held in the trust account would be returned within five business days of such date. |
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Interest earned on the trust account |
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Interest earned on the trust account, net of up to $3,000,000 which may have been released to us to fund our working capital requirements, may be disbursed for the purposes of paying taxes on interest earned. While we intend, in the event of our dissolution and liquidation, to distribute funds from our trust account to our public stockholders as soon as reasonably practicable pursuant to our stockholder approved plan of dissolution and distribution, the actual time at which our public stockholders receive their funds will be longer than the 5 business days under a Rule 419 offering. |
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Interest earned on proceeds held in the trust account would be held in the trust account for the sole benefit of the shareholders and would not be released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time. In the event a business combination was not consummated within 18 months, proceeds held in the trust account would be returned within 5 business days of such date. |
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Directors and Executive Officers
Our current directors and executive officers are as follows:
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Name
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Age
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Position
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|---|---|---|---|---|
| Michael P. Connors | 51 | Chairman of the Board and Chief Executive Officer | ||
| Frank Martell | 47 | Executive Vice President, Chief Financial Officer, and Treasurer | ||
| Earl H. Doppelt | 53 | Executive Vice President, General Counsel, and Corporate Secretary | ||
| Richard G. Gould | 48 | Executive Vice President | ||
| Robert J. Chrenc | 62 | Director | ||
| R. Glenn Hubbard | 48 | Director | ||
| Robert E. Weissman | 66 | Director |
Michael P. Connors has served as our Chairman of the Board and Chief Executive Officer since our inception. Mr. Connors also served as our Secretary and Treasurer from the date of our inception until December, 2006. Mr. Connors served as Chairman and CEO of VNU's Media Measurement and Information (MMI) Group from its creation in 2001 until his resignation in 2005. VNU is a leading global information and media company. Mr. Connors was instrumental in creating the MMI Group, which comprises VNU's media information, entertainment, software and internet businesses, including Nielsen Media Research, Nielsen Entertainment and NetRatings. In addition to leading the MMI Group, Mr. Connors served as chairman of VNU World Directories from 2003 to 2004, which included VNU's Yellow Pages and directory businesses operating in seven countries. Mr. Connors also served as a member of the VNU Executive Board. Prior to joining VNU, Mr. Connors was Vice Chairman of ACNielsen Corporation, one of the world's largest marketing information services companies, commencing November, 1996. Prior to that, as Senior Vice President of The Dun & Bradstreet Corporation (D&B), Mr. Connors played a key role in the breakup of D&B into three separate, publicly traded companies, including ACNielsen. Mr. Connors currently serves as a director of R.H. Donnelley Corporation and Eastman Chemical Company. In addition, Mr. Connors served until November 2005 as a member of the Board of Directors of NetRatings, Inc. Except as listed above, Mr. Connors has not been employed by or served as a director of any public company since leaving VNU.
Frank Martell has served as our Executive Vice President, Chief Financial Officer and Treasurer since December, 2006. Until December 2006 Mr. Martell was the Chief Operating Officer of ACNielsen Corporation and Chief Executive Officer of ACNielsen Europe and Emerging Markets. He spent the previous 11 years with VNU, ACNielsen Corporation and the Dun & Bradstreet Corporation serving in a series of global financial and senior operating positions. He joined D&B in 1995 as Head of Internal Audit, became Corporate Treasurer for ACNielsen worldwide after the spin-off from D&B in 1996 and held a series of executive positions residing in the U.S., Asia and Europe including Chief Financial Officer and President and CEO of ACNielsen Asia Pacific. Prior to joining D&B, Mr. Martell had a 15-year career at General Electric in financial management positions including GE corporate audit.
Earl H. Doppelt has served as our Executive Vice President, General Counsel and Corporate Secretary since December, 2006. Until November 2006, Mr. Doppelt served as Executive Vice President and Chief Legal Officer of VNU, a leading global information and media company. He spent the previous 12 years with VNU, ACNielsen Corporation and The Dun & Bradstreet Corporation ("D&B"). He joined D&B in 1994 as Senior Vice President and
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General Counsel and, in 1996, when D&B was broken up into three separate public companies, became Executive Vice President and General Counsel of ACNielsen. Mr. Doppelt was part of the executive team that led the turnaround of ACNielsen into a profitable company. When VNU acquired ACNielsen in 2001, Mr. Doppelt was named Executive Vice President and Chief Legal Officer of VNU. During his career at VNU, ACNielsen and D&B, Mr. Doppelt managed a number of complex M&A transactions including three ownership transitions from the break-up of D&B into three separate companies, the sale of ACNielsen to VNU and the sale of VNU to a private-equity consortium. Prior to joining D&B, Mr. Doppelt was Senior Vice President and Deputy General Counsel of Paramount Communications and earlier a litigator specializing in antitrust and securities matters for the law firm of Paul, Weiss, Rifkind, Wharton and Garrison.
Richard G. Gould has served as our Executive Vice President since December, 2006. Until October 2006, Mr. Gould was with Morgan Stanley where, during a 20-year career, he held several executive positions. His experience with Morgan Stanley included capital markets, global sales management, marketing and new product innovation. He initially joined Morgan Stanley's London office as a sales manager of European Equity Derivatives to start the firm's options, futures and portfolio trading businesses in Europe. He was promoted to Vice President in 1988; Principal in 1990; and Managing Director in 1992. Mr. Gould then moved to Tokyo in October 1992 where he was responsible for equity derivative sales for the Asian Region, subsequently becoming head of the Japanese Equity Division. He moved to Morgan Stanley's New York headquarters in January 1996,where he held executive positions including head of the Global Pensions Group, head of Quantitative Research, head of Global Derivative Sales and later served as co-head of North American equity distribution.
Robert J. Chrenc has served as our Director since August, 2006. Mr. Chrenc served as Executive Vice President and Chief Financial Officer of ACNielsen Corporation, a leading provider of marketing information, from June 1996 to February 2001. Mr. Chrenc was promoted to Executive Vice President and Chief Administrative Officer in February 2001 and served in this capacity until his retirement in December 2001. Mr. Chrenc currently is a director of Symbol Technologies Inc., a leading provider of products and solutions that capture, move and manage information, and serves as a non-executive Chairman of its Board of Directors.
R. Glenn Hubbard has served as our Director since August, 2006. Dr. Hubbard has served as the Dean of Columbia University, Graduate School of Business since 2004. A Columbia faculty member since 1988, he is also the Russell L. Carson Professor of Finance and Economics in the Department of Economics and Graduate School of Business of Columbia University. Dr. Hubbard is a research associate at the National Bureau of Economic Research and is a visiting scholar and Director of the Tax Policy Program for the American Enterprise Institute. In addition, Dr. Hubbard was Chairman of the President's Council of Economic Advisers from 2001 to 2003. Dr. Hubbard currently serves as a director of ADP, Inc., Duke Realty Corporation, R.H. Donnelley Corporation and KKR Financial Corp.
Robert E. Weissman has served as our Director since August, 2006. Mr. Weissman retired in January 2001 after nearly 30 years of experience as Chief Executive Officer for several public corporations. Most recently, Mr. Weissman was Chairman of the Board of Directors of IMS Health Incorporated (IMS), a provider of information to the pharmaceutical and healthcare industries. He served as both Chairman and Chief Executive Officer of IMS until March 1999 and he continued to serve as Chairman until 2001. Prior to his position with IMS, Mr. Weissman was Chairman and Chief Executive Officer of Cognizant Corporation and prior to that, was Chairman and Chief Executive Officer of The Dun & Bradstreet Corporation (D&B) from 1994 to 1996. Prior to his election as Chairman and Chief Executive Officer of D&B, he
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held the position of President and Chief Operating Officer of that company since 1985. From 2001 to 2005, Mr. Weissman was active as Chairman of Shelburne Partners, a private investment company that works with emerging companies in the United States and Europe. In addition, Mr. Weissman currently serves as a director of Cognizant Technology Solutions Corporation, State Street Corporation and Pitney Bowes, Inc.
Our board of directors has four directors and is divided into three classes with one class of directors being elected each year and each class serving a three-year term. The term of office of the first class of directors, consisting of Robert J. Chrenc, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of R. Glenn Hubbard, will expire at the second annual meeting. The term of office of the third class of directors, consisting of Michael P. Connors and Robert E. Weissman will expire at the third annual meeting. These individuals will play a key role in identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating its acquisition. None of these individuals has been a principal of or affiliated with a public company or a blank check company that executed a business plan similar to our business plan and none of these individuals is currently affiliated with such an entity. However, we believe that the skills and expertise of these individuals, their collective access to acquisition opportunities and ideas, their contacts, and their transaction expertise should enable them to identify and effect an acquisition, although we cannot assure you that they will, in fact, be able to do so.
Senior Advisors
We also may consult, from time to time, with certain individuals who have experience in the information services industry, which we call our senior advisors, each of whom is also a stockholder of our company, who may assist us in our search for and evaluation of our target business and other matters relating to our operations.
Barry Holt will serve as one of our Senior Advisors. Mr. Holt has more than 35 years experience in corporate communications. Mr. Holt was Corporate Vice President, Global Communications of Whirlpool Corporation from 2000 to 2004. Prior to joining Whirlpool, from 1996 to 2000 he was Senior Vice President, Global Communications of ACNielsen Corporation, the world's largest marketing information organization. While with ACNielsen, Mr. Holt developed and executed a global communications strategy to support ACNeilsen's spin-off from The Dun & Bradstreet Corporation and public listing on the New York Stock Exchange, including the introduction of complete external and investor communication. Earlier he was Vice President, Corporate Communications, Philip Morris Companies, and before that, he held senior public relations and public affairs positions with Pepsi-Cola International and Pepsi-Cola USA. Before joining Pepsi-Cola, Mr. Holt was Vice President/Client Services Manager at Burson-Marsteller, where he managed such accounts as Burger King, General Foods, M&M Mars and Gillette Safety Razor Division, among others. Mr. Holt has been a communications consultant since his retirement in 2004 to companies including the Publicis Group and Wellpoint Health Systems.
Francis B. Barker will serve as one of our Senior Advisors. Mr. Barker has led strategic and financial initiatives in the information, media, and communications industries for over 17 years, in roles including head of a corporation's M&A function, private equity investing, and investment banking. Most recently, he was Senior Vice President for Corporate Development and Strategy at Dex Media, Inc. In 2006, he led the management transaction team in the sale of Dex Media, at the time the largest publicly traded yellow pages company in the U.S., to R.H. Donnelley. Mr. Barker joined Dex Media in 2003 from The Carlyle Group, where he worked from 1999 to 2002. As Managing Director in Carlyle's Telecom and Media
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Group, he played a senior role in the acquisition of Dex Media from Qwest Communications in 2002, among other major investment transactions. Prior to joining The Carlyle Group, Barker spent nine years at Morgan Stanley leading major client relationships and transaction teams in publishing and information services; advertising; marketing services; education and training services; Internet content; broadband and cable communications; and TV and radio broadcasting.
Mr. Barker and Mr. Holt will provide merger and acquisition and investor relations advice to us. We expect them to play a role in identifying and analyzing potential acquisition candidates for us.
The senior advisors are independent contractors and, as such, do not owe us any fiduciary duties with respect to the execution of their duties. No compensation of any kind, including finder's and consulting fees, will be paid by us, Oenoke Partners, LLC or any of our respective affiliates to any of our senior advisors, or any of their affiliates, for services rendered to us prior to or in connection with the consummation of our initial business combination.
Director Independence
Our board of directors has determined that Mr. Weissman, Mr. Chrenc and Dr. Hubbard are "independent directors" as defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and as defined by the rules of the American Stock Exchange.
Audit Committee
Our audit committee currently consists of Mr. Chrenc, as Chairman, Dr. Hubbard and Mr. Weissman.
The audit committee reviews the professional services and independence of our independent registered public accounting firm and our accounts, procedures and internal controls. The audit committee also selects the firm that will serve as our independent registered public accounting firm, reviews and approves the scope of the annual audit, reviews and evaluates with the independent public accounting firm our annual audit and annual financial statements, reviews with management the status of internal accounting controls, evaluates problem areas having a potential financial impact on us that may be brought to the committee's attention by management, the independent registered public accounting firm or the board of directors, and evaluates all of our public financial reporting documents.
We have agreed that our audit committee will review and approve all expense reimbursements made to our officers, directors or senior advisors and that any expense reimbursement payable to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
In accordance with applicable federal securities laws and the rules of the American Stock Exchange, we have adopted an audit committee charter that incorporates these duties and responsibilities.
Financial Experts on Audit Committee
The audit committee will at all times be composed exclusively of "independent directors" who are "financially literate" as defined under the American Stock Exchange listing standards. The American Stock Exchange listing standards define "financially literate" as being able to
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read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement.
In addition, we must certify to the American Stock Exchange that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual's financial sophistication. The board of directors has determined that Mr. Chrenc satisfies the American Stock Exchange's definition of financial sophistication and also qualifies as an "audit committee financial expert," as defined under rules and regulations of the SEC.
Nominating Committee
We have established a nominating committee of the board of directors. This committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee also supervises the board of directors' annual review of director independence and the board of directors' performance evaluations. In accordance with applicable federal securities laws and the rules of the American Stock Exchange, we have adopted a nominating committee charter that delineates these duties and responsibilities. The nominating committee consists of Dr. Hubbard, as chairman, Mr. Chrenc and Mr. Weissman, each of whom is an independent director under the American Stock Exchange listing standards.
Compensation Committee
We have established a compensation committee of the board of directors. This committee is responsible for recommending the compensation of our executive officers. In accordance with applicable federal securities laws and the rules of the American Stock Exchange, we have adopted a compensation committee charter that describes the duties and responsibilities of the compensation committee. The compensation committee consists of Mr. Weissman, as chairman, Mr. Chrenc and Dr. Hubbard, each of whom is an independent director under the American Stock Exchange listing standards.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees is set forth in the nominating committee charter and will generally provide that persons to be nominated should be actively engaged in business endeavors, have an understanding of financial statements, corporate budgeting and capital structure, be familiar with the requirements of a publicly traded company, be familiar with industries relevant to our business endeavors, be willing to devote significant time to the oversight duties of the board of directors of a public company, and be able to promote a diversity of views based on the person's education, experience and professional employment.
Code of Conduct and Ethics
We have adopted a code of ethics that applies to our officers, directors and employees in accordance with applicable federal securities laws and the rules of the American Stock Exchange. We have filed copies of our code of ethics and committee charters as exhibits to the registration statement of which this prospectus is a part. You may review these documents by accessing our public filings at the SEC's web site at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.
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Executive Compensation
No compensation of any kind, including finder's and consulting fees, will be paid by us, Oenoke Partners, LLC or any of our respective affiliates to any of our officers, directors, senior advisors, or any of their respective affiliates, for services rendered prior to or in connection with a business combination. However, we will reimburse such persons for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations, although they will not be reimbursed for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount not held in the trust account unless the business combination is consummated.
Following an initial business combination and to the extent our current executive officers continue to be involved in management of our business, they will be entitled to receive such compensation as our Board of Directors may approve.
Conflicts of Interest
Potential investors should be aware of the following potential conflicts of interest:
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In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above-mentioned conflicts will be resolved in our favor.
In connection with the vote required for the initial business combination, our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, have agreed to vote the shares of common stock then owned by them in accordance with the majority of the shares of our common stock voted by our public stockholders. In addition, they have agreed to waive their rights to conversion of their shares in connection with the vote on our initial business combination and to participate in any liquidation distribution, but only with respect to those shares of common stock acquired by them prior to this offering including shares underlying the units acquired in the private placement.
To further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity that is affiliated with our principal stockholder, officers, directors or senior advisors unless we obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial point of view.
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The following table sets forth information regarding the beneficial ownership of our common stock as of ( ) , 2006 and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus (assuming no purchase of units in this offering) and in the private placement, by:
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
|
|
Amount and Nature
of Beneficial Ownership |
Approximate Percentage of
Outstanding Common Stock |
|||||||
|---|---|---|---|---|---|---|---|---|---|
|
Name and Address of Beneficial Owner(1)
|
Before Offering
and Private Placement |
After Offering
and Private Placement |
Before Offering
and Private Placement |
After Offering
and Private Placement(2) |
|||||
| Michael P. Connors(3) | 4,237,500 | 4,237,500 | 91.07 | % | 18.08 | % | |||
| Frank Martell(4) | 4,237,500 | 4,237,500 | 91.07 | % | 18.08 | % | |||
| Earl H. Doppelt(4) | 4,237,500 | 4,237,500 | 91.07 | % | 18.08 | % | |||
| Richard G. Gould(4) | 4,237,500 | 4,237,500 | 91.07 | % | 18.08 | % | |||
| Robert J. Chrenc(5) | 62,500 | 62,500 | 1.33 | % | * | ||||
| R. Glenn Hubbard(5) | 62,500 | 62,500 | 1.33 | % | * | ||||
| Robert E. Weissman(5) | 62,500 | 62,500 | 1.34 | % | * | ||||
| Oenoke Partners, LLC(6) | 4,237,500 | 4,237,500 | 91.07 | % | 18.08 | % | |||
| All directors and executive officers as a group (4 individuals)(7) | 4,425,000 | 4,425,000 | 95.07 | % | 18.88 | % | |||
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Oenoke Partners, LLC, our principal stockholder, has agreed to purchase from us an aggregate of 6,000,000 warrants at a price of $1.00 per warrant in a private placement prior to the completion of this offering. The warrants purchased in the private placement will be identical to those attached to the units sold in this offering, except that the private placement warrants will not be subject to redemption. Oenoke Partners, LLC has agreed that it will not sell or otherwise transfer such warrants until after we consummate a business combination.
Immediately after the completion of this offering and the private placement, our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, will beneficially own, collectively, directly or indirectly, 20% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering and after giving effect to our repurchase of shares from Oenoke Partners, LLC, assuming the underwriters' over-allotment option is not exercised). As a result, our existing stockholders may be able to effectively exercise control over all matters requiring approval by our stockholders other than approval of our initial business combination.
We have rights to purchase up to 703,125 shares of common stock from Oenoke Partners, LLC in the event that the underwriters do not exercise all or a portion of their over-allotment option. We have agreed with the underwriters to exercise these rights if, and to the extent, the underwriters do not exercise all or a portion of their over-allotment option. This right is exercisable for the five-day period following the earlier to occur of the expiration or termination of the underwriters' option to purchase 2,812,500 additional units to cover over-allotments. If the underwriters exercise their over-allotment option in full, we will no longer have a right to purchase any shares of common stock from Oenoke Partners, LLC. The price for each share pursuant to this right is $0.001 per share, the price at which Oenoke Partners, LLC purchased its shares of common stock. In accordance with our agreement with the underwriters, we will exercise this right to purchase shares only in an amount sufficient to cause Oenoke Partners, LLC, together with our directors and senior advisors, to maintain control over shares acquired prior to this offering and prior to the private placement in an amount equal to 20% of our outstanding shares after giving effect to the offering and the exercise, if any, of the underwriters' over-allotment option, but not including the shares underlying the warrant sold in the private placement.
All of the shares of our common stock outstanding prior to the date of this prospectus and the warrants purchased in the private placement will be subject to lock-up agreements restricting their sale or other transfer until the earliest of:
During the lock-up period, the holders of these warrants and units will not be able to sell or transfer their securities including the shares and warrants comprising the units except to their affiliated companies, spouses and children or trusts established for their benefit or to charitable organizations (all of whom will be subject to the identical lock-up and transfer restrictions), but will retain all other rights as our stockholders, including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends, if declared. If dividends are declared and payable in shares of common stock, such dividends will also be subject to the lock-up restrictions. If we are unable to effect a business combination and liquidate, our existing stockholders will not receive any portion of the
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liquidation proceeds with respect to common stock owned by them prior to the date of this prospectus.
The common stock and warrants comprising the units sold in this offering will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the underwriters' over-allotment option and (2) its exercise in full, subject in either case to our having filed the Form 8-K described below and having issued a press release announcing when such separate trading will begin. In no event will the common stock and warrants begin to trade separately until we have filed a Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering. We will file this Form 8-K promptly after the consummation of this offering, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Form 8-K, a second or amended Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
Mr. Connors, Mr. Martell, Mr. Doppelt, Mr. Gould and Oenoke Partners, LLC may be deemed our "promoters," as defined under the Federal securities laws.
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On August 2, 2006, we issued 4,687,500 units, consisting of 4,687,500 shares of our common stock and 4,687,500 warrants to purchase a share of our common stock, to Oenoke Partners, LLC for an aggregate of $9,375 in cash, at an aggregate purchase price of $0.002 per unit. At such date, Mr. Connors was the beneficial owner of Oenoke Partners, LLC.
On September 29, 2006, we redeemed the 4,687,500 warrants held by Oenoke Partners, LLC, for an aggregate redemption price of $4,687.50 in cash, or a redemption price of $0.001 per warrant.
On December 21, 2006, we issued 703,125 shares of our common stock to Oenoke Partners, LLC for an aggregate of $703.125, at an aggregate purchase price of $0.001 per share. Such shares are redeemable by us to the extent the underwriter's over-allotment option is not exercised. At such date, Mr. Connors was the beneficial owner of Oenoke Partners, LLC. On December 21, 2006, following such issuance, Mr. Connors transferred to each of Mr. Martell, Mr. Doppelt and Mr. Gould membership interests representing 25% of the outstanding equity interests of Oenoke Partners, LLC.
On December 21, 2006, Oenoke Partners, LLC conveyed to Robert J. Chrenc, Dr. R. Glenn Hubbard and Robert E. Weissman an aggregate of 187,500 shares of common stock.
On December 21, 2006, Oenoke Partners, LLC conveyed to Francis B. Barker, Barry Holt and a leasing consultant an aggregate of 262,500 shares of common stock.
The holders of the majority of these shares are entitled to make up to two demands that we register the resale of their shares and warrants and shares underlying the warrants. The holders of the majority of these shares may elect to exercise these registration rights at any time after completion of our initial business combination, subject to the transfer restrictions imposed by the lock-up agreements. In addition, these stockholders have certain "piggy-back" registration rights on registration statements filed subsequent to the completion of our initial business combination, subject to the transfer restrictions imposed by the lock-up agreements. We will bear the expenses incurred in connection with the filing of any such registration statements.
As part of this offering, our friends, employees, officers, directors and senior advisors may purchase up to an aggregate of 937,500 units at the initial public offering price through a directed unit program. For a more complete discussion of the directed unit program, see the section below entitled "Underwriting."
Our principal stockholder, Oenoke Partners, LLC, which is an affiliate of our officers, has advanced to us, pursuant to two separate loans, a total of $250,000, which was used to pay a portion of the expenses of this offering. The first loan, for $100,000, bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of August 1, 2007 and the consummation of this offering. The second loan, for $150,000, also bears interest at a rate of 5% per annum, compounded semiannually, and is due on the earlier of October 3, 2007 and the consummation of this offering. The loans will be repaid out of the proceeds of this offering not being placed in the trust account.
We will reimburse our officers, directors, senior advisors and their respective affiliates for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying, investigating and implementing possible target businesses and business combinations, although they will not be reimbursed for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount not held in the trust account unless the business combination is consummated. There is no
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limit on the amount of such out-of-pocket expenses that are reimbursable by us, subject to review by our audit committee.
Other than reimbursable out-of-pocket expenses payable to our officers, directors and senior advisors, no compensation or fees of any kind, including finders and consulting fees, will be paid by us, Oenoke Partners, LLC or any of our respective affiliates to any of our officers directors or senior advisors, or their affiliated entities prior to this offering, or to any of their respective affiliates, for services rendered to us prior to or with respect to the business combination.
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General
We are authorized to issue 75,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. As of the date of this prospectus, 4,687,500 shares of common stock are outstanding, held by Oenoke Partners, LLC, Robert J. Chrenc, Dr. R. Glenn Hubbard, Robert E. Weissman, Francis B. Barker, Barry Holt and a leasing consultant (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised). No shares of preferred stock are currently outstanding.
Units
Each unit consists of one share of common stock and one warrant. Each warrant entitles the holder to purchase one share of common stock at a price of $6.00. The common stock and warrants comprising the units sold in this offering will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the underwriters' over-allotment option and (2) its exercise in full, subject in either case to our having filed the Form 8-K described below and having issued a press release announcing when such separate trading will begin. In no event will the common stock and warrants begin to trade separately until we have filed a Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering. We will file this Form 8-K promptly after the consummation of this offering, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Form 8-K, a second or amended Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
Common Stock
Common stockholders of record are entitled to one vote for each share held of record on all matters to be voted on by stockholders. In connection with the vote required for any business combination, our existing stockholders, including our principal stockholder and all of our officers, directors and senior advisors, have agreed to vote the shares of common stock then owned by them in accordance with the majority of the shares of our common stock voted by our public stockholders. Our existing stockholders will vote all of their shares in any manner they determine, in their sole discretion, with respect to any other items that come before a vote of our stockholders.
We will proceed with the business combination only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination and only if public stockholders owning less than 20% of the shares sold in this offering both vote against the business combination and then exercise their conversion rights discussed below. Voting against the business combination alone will not result in conversion of a stockholder's shares for the conversion price. Such stockholder must have also exercised its conversion rights.
Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. The classification of our board of directors and the limitations on the removal of directors and filling of vacancies could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of us.
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If we are forced to liquidate our trust account because we have not consummated a business combination within the required time periods, our public stockholders are entitled to share ratably in the funds then in the trust account, as part of any plan of dissolution and distribution, inclusive of any interest earned, and any net assets remaining available for distribution to them after payment of liabilities including taxes. Our existing stockholders have agreed to waive their rights to share in any distribution with respect to common stock owned by them prior to the offering or acquired in the private placement if we are forced to liquidate. Additionally, upon the liquidation of our trust account as a part of any plan of dissolution and distribution the underwriters have agreed to waive any right they may have to the $4,500,000 of deferred underwriting discount (or $5,175,000 if the over-allotment option is exercised in full) held in the trust account all of which shall be distributed to our public stockholders.
Our stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock, except that public stockholders have the right to have their shares of common stock converted to cash equal to the conversion price if they vote against the business combination and the business combination is approved and completed. Public stockholders who convert their stock into their share of the trust account still have the right to exercise the warrants that they received as part of the units.
Preferred Stock
Our amended and restated certificate of incorporation authorizes the issuance of 10,000,000 shares of blank check preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock, although the underwriting agreement prohibits us, prior to a business combination, from issuing preferred stock which participates in any manner in the proceeds of the trust account, or which votes as a class with the common stock on a business combination. We may issue some or all of the preferred stock to effect a business combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future.
Warrants
As of the date of this prospectus, there are no warrants outstanding other than the warrants to be issued as part of the private placement. Each outstanding warrant and each warrant to be issued in this offering as part of a unit and in the private placement entitle the registered holder to purchase one share of our common stock at a price of $6.00 per share, subject to adjustment as discussed below, at any time commencing on the later of:
The warrants will expire four years from the date of this prospectus at 5:00 p.m., New York City time.
The warrants underlying the units sold in this offering will begin separate trading five business days following the earlier to occur of (1) expiration or termination of the
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underwriters' over-allotment option or (2) its exercise in full, subject in either case to our having filed the Form 8 K described below and having issued a press release announcing when such separate trading will begin. In no event will the warrants begin to trade separately until we have filed a Form 8 K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering including any proceeds we receive from the exercise of the over-allotment option.
We may call the warrants (including any warrants held by any of the underwriters as a result of their exercise of the underwriters unit purchase option), except for the warrants issued in the private placement, for redemption at any time after the warrants become exercisable:
In the event that the common stock issuable upon exercise of the warrants has not been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants, we will not have the right to redeem the warrants.
We have established this last criterion to provide warrant holders with a premium to the initial warrant exercise price as well as a degree of liquidity to cushion the market reaction, if any, to our redemption call. If the foregoing conditions are satisfied and we call the warrants for redemption, each warrant holder shall then be entitled to exercise his or her warrant prior to the date scheduled for redemption. However, there is no assurance that the price of the common stock will exceed $11.50 or the warrant exercise price after the redemption call is made.
We may exercise this redemption right at our option with no requirement for the consent of the underwriters or any other person.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which has been filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.
The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of common stock at a price below their respective exercise prices.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants,
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each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No warrants will be exercisable unless at the time of exercise a prospectus relating to common stock issuable upon exercise of the warrants is current and the common stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. Under the terms of the warrant agreement, we have agreed to meet these conditions and use our reasonable best efforts to maintain a current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants and we will not be required to settle any such warrant exercise. The warrants may be deprived of any value and the market for the warrants may be limited if the prospectus relating to the common stock issuable upon the exercise of the warrants is not current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside.
Because the warrants we will sell in the private placement will be issued pursuant to an exemption from the registration requirements under the federal securities laws, the holders of the warrants purchased in the private placement will be able to exercise their warrants even if, at the time of exercise, a prospectus relating to the common stock issuable upon exercise of the warrants issued in the public offering is not current.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder.
Immediately prior to the completion of this offering, we will sell to Oenoke Partners, LLC, our principal stockholder, 6,000,000 warrants at a price of $1.00 per warrant, in a private placement. The warrants to be purchased in the private placement will be identical to those sold in this offering, except that the private placement warrants will not be subject to redemption and can be exercised on a cashless basis. However, Oenoke Partners, LLC has agreed that it will not sell or otherwise transfer the warrants until one year following the date we consummate a business combination. We have agreed to file a registration statement upon the request of our existing stockholders that will cover the resale of the warrants issued in the private placement and the shares of common stock that are issuable upon exercise of the warrants.
Underwriters' Unit Purchase Option
We have agreed to sell to the underwriters, for $100, an option to purchase up to an aggregate total of 937,500 units at a per unit price of $9.60. The exercise price for the units issuable upon exercise of the underwriters' unit purchase option was determined through negotiations between us and the underwriters. Following such negotiations, we agreed that the exercise price of the units underlying the unit purchase option should reflect a twenty percent premium over the price of the units issued in the initial public offering. The units issuable upon exercise of this option are identical to those offered by this prospectus except that the warrants included in the option have an exercise price of $7.50 (125% of the exercise price of the warrants included in the units sold in the offering).
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Dividends
We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future. Further, our ability to declare dividends may be limited by restrictive covenants if we incur any indebtedness.
Our Transfer Agent and Warrant Agent
The transfer agent for our securities and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004.
Shares Eligible for Future Sale
Immediately after this offering, we will have 23,437,500 shares of common stock outstanding (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised), or 26,953,125 shares if the underwriters' over-allotment option is exercised in full. Of these shares, the 18,750,000 shares sold in this offering, or 21,562,500 shares if the over-allotment option is exercised in full, will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining 4,687,500 shares (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised) are restricted securities under Rule 144 because they were issued in private transactions not involving public offerings. None of those shares will be eligible for sale under Rule 144 prior to , 2007. Notwithstanding this, none of those shares nor the warrants purchased in the private placement will be transferable for a period of one year from the date of the closing of our initial business combination and will only be released from such transfer restrictions prior to that date in connection with transfers (i) by gift to a member of an existing stockholder's immediate family or to a trust, the beneficiary of which is an existing stockholder or a member of an existing stockholder's immediate family, (ii) by virtue of the laws of descent and distribution upon death of any existing stockholder, or (iii) pursuant to a qualified domestic relations order, while in each case remaining subject to the lockup agreement, and will only be released prior to that date if we are forced to liquidate, in which case the shares will be cancelled, or if we were to consummate a transaction after the consummation of a business combination which results in all the stockholders of the combined entity having the right to exchange their shares of common stock for cash, securities or other property.
Rule 144
In general, under Rule 144 as currently in effect, a person who has beneficially owned restricted shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:
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Sales under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Rule 144(k)
Under Rule 144(k), a person who is not deemed to have been one of our affiliates at the time of or at any time during the three months preceding a sale, and who has beneficially owned the restricted shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell his or her shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
SEC Position on Rule 144 Sales
The SEC has taken the position that promoters or affiliates of a blank check company and their transferees, both before and after a business combination, would act as "underwriters" under the Securities Act when reselling the securities of a blank check company acquired prior to the consummation of its initial public offering. Accordingly, the SEC believes that those securities can be resold only through a registered offering and that Rule 144 would not be available for those resale transactions despite technical compliance with the requirements of Rule 144.
Registration Rights
The holders of our 4,687,500 issued and outstanding shares prior to the completion of this offering (after giving effect to our repurchase of shares from Oenoke Partners, LLC assuming the underwriter's over-allotment option is not exercised), including the investor in the private placement, are entitled to registration rights covering the resale of their shares and the resale of their warrants and shares acquired upon exercise of their warrants. The holders of the majority of these shares are entitled to make up to two demands that we register their shares, warrants and shares that they are entitled to acquire upon the exercise of warrants. The holders of the majority of these shares can elect to exercise these registration rights at any time after the consummation of our initial business combination, subject to the transfer restrictions imposed by the lock-up agreements. In addition, these stockholders have certain "piggy-back" registration rights on registration statements filed subsequent to the date on which these securities are released from the restrictions imposed by the lock-up agreements. We will bear the expenses incurred in connection with the filing of any such registration statements. Pursuant to the registration rights agreement, these stockholders waive any claims to monetary damages for any failure by us to comply with the requirements of the Registration Rights Agreement.
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Deutsche Bank Securities Inc. is acting as bookrunning manager of this offering and is acting as representative of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has agreed to purchase, and we have agreed to sell to that underwriter, the number of units set forth opposite the underwriter's name.
|
Underwriter
|
Number of
Units |
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|---|---|---|---|
| Deutsche Bank Securities Inc. | |||
| Morgan Joseph & Co. Inc. | |||
| Lazard Capital Markets LLC | |||
|
|
|||
| Total | 18,750,000 | ||
|
|
|||
The underwriting agreement provides that the obligations of the underwriters to purchase the units included in this offering are subject to certain closing conditions, including the registration statement being effective, NASD approval of the underwriters' compensation and the delivery of legal opinions and an accountant's letter. The underwriters are obligated to purchase all of the units (other than those covered by the over-allotment option described below) if they purchase any of the units.
The underwriters propose to offer some of the units directly to the public at the public offering price set forth on the cover page of this prospectus and some of the units to dealers at the public offering price less a concession not to exceed $ per unit. The underwriters may allow, and dealers may reallow, a concession not to exceed $ per unit on sales to other dealers.
We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to 2,812,500 additional units at the public offering price less the underwriting discount. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional units approximately proportionate to the underwriter's initial purchase commitment.
We and our existing stockholders have agreed that with respect to the shares they owned prior to the completion of this offering and the warrants purchased in the private placement, for a period of one year from the date of the closing of the initial business combination, we and they will not dispose of or hedge any units, warrants or any other securities convertible into or exchangeable for our common stock, other than for transfers to their affiliated companies, spouses and children or trusts established for their benefit or to charitable organizations.
Prior to this offering, there has been no public market for our units. Consequently, the initial public offering price for the units was determined by negotiations among us and the underwriters. Factors considered in determining the prices and terms of the units, including the common stock and warrants underlying the units, include:
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However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since the underwriters are unable to compare our financial results and prospects with those of public companies operating in the same industry.
We cannot assure you that the prices at which the units will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our common stock, units or warrants will develop and continue after this offering.
The following table shows the underwriting discount that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters' over-allotment option.
|
|
Paid by Information Services Group, Inc.
|
|||||
|---|---|---|---|---|---|---|
|
|
No Exercise
|
Full Exercise
|
||||
| Per unit | $ | 0.56 | $ | 0.56 | ||
| Total | $ | 10,500,000 | $ | 12,075,000 | ||
The amounts paid by us in the table above include $4,500,000 ($0.24 per unit) in deferred underwriting discount ($5,175,000 if the over-allotment option is exercised in full), an amount equal to 3.0% of the gross proceeds of this offering, which will be placed in the trust account until our completion of an initial business combination as described in this prospectus. At that time, the deferred underwriting discount will be released to the underwriters and any public stockholders exercising their conversion rights out of the balance held in the trust account. If we do not complete an initial business combination and the trustee must distribute the balance of the trust account, each underwriter has agreed that (1) on our liquidation as part of any plan of dissolution and distribution, it will forfeit any rights or claims to its deferred underwriting discount, including any accrued interest thereon, then in the trust account, and (2) the deferred underwriters' discount will be distributed on a pro rata basis among the public stockholders, together with any accrued interest thereon and net of income taxes payable on such interest.
We have agreed to sell to the underwriters for $100 an option to purchase up to a total of 937,500 units at a per unit price of $9.60. The units issuable upon exercise of this option are identical to those offered by this prospectus except that the warrants included in the option have an exercise price of $7.50 (125% of the exercise price of the warrants included in the units sold in the offering). We will account for this purchase option as a cost of raising capital. We have estimated, based upon a Black-Scholes option pricing model, that the fair value of the purchase option on the date of grant is approximately $3.3 million, using an expected life of 4 years, volatility of 58.8%, and a risk-free rate of 4.61%. However, because our units do not have a trading history, the volatility is based on assumptions by management.
The option and the 937,500 units, the 937,500 shares of common stock and the 937,500 warrants underlying such units, and the 937,500 shares of common stock underlying such warrants, have been deemed compensation by the NASD and are therefore subject to a
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180-day lock-up pursuant to Rule 2710(g)(1) of the NASD Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of this prospectus except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. Although the purchase option and its underlying securities have been registered under the registration statement of which this prospectus forms a part, the option grants to holders certain additional registration demand and "piggy back" rights for periods of five and seven years, respectively, from the date of this prospectus with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. We will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves.
At our request, the underwriters have reserved up to 937,500 of the units for sale at the initial public offering price through a directed unit program to persons who are our friends, officers, directors or senior advisors. The number of units available for sale to the public will be reduced by the number of directed units purchased by participants in the program. Any directed units not purchased will be offered by the underwriters to the public on the same basis as all other units offered. We have agreed to indemnify the underwriters against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sale of the directed units.
In connection with the offering, Deutsche Bank Securities Inc., on behalf of the underwriters, may purchase and sell units in the open market. These transactions may include short sales, syndicate covering transactions and stabilizing transactions. Short sales involve syndicate sales of units in excess of the number of units to be purchased by the underwriters in the offering, which creates a syndicate short position. "Covered" short sales are sales of units made in an amount up to the number of shares represented by the underwriters' over-allotment option. In determining the source of units to close out the covered syndicate short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. Transactions to close out the covered syndicate short involve either purchases of units in the open market after the distribution has been completed or the exercise of the over-allotment option. The underwriters may also make "naked" short sales of units in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of bids for or purchases of units in the open market while the offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when Deutsche Bank Securities Inc. repurchases units originally sold by that syndicate member in order to cover syndicate short positions or make stabilizing purchases.
Any of these activities may have the effect of preventing or retarding a decline in the market price of the units. They may also cause the price of the units to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the over-the-counter market, or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.
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The restricted period under Regulation M for this offering will have ended when all of the units have been distributed and after any over-allotment and stabilization arrangements and trading restrictions in connection with the offering have been terminated.
A prospectus in electronic format may be made available by one or more of the underwriters. The representative may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. The representative will allocate shares to underwriters that may make internet distributions on the same basis as other allocations. In addition, shares may be sold by the underwriters to securities dealers who resell shares to online brokerage account holders.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities.
Lazard Frères & Co. LLC referred this transaction to Lazard Capital Markets LLC and will receive a fee from Lazard Capital Markets LLC in connection therewith.
In addition to an initial acceptance fee of $1,000 that is charged by Continental Stock Transfer & Trust Company, as trustee, we will be required to pay to Continental Stock Transfer & Trust Company annual fees of $3,000 for acting as trustee, $4,800 for acting as transfer agent of our common stock, $2,400 for acting as warrant agent for our warrants and $1,800 for acting as escrow agent.
UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
The following is a general discussion of material United States federal tax consequences of the acquisition, ownership, and disposition of our units, common stock, and warrants, which we refer to collectively as our securities, purchased pursuant to this offering. This discussion assumes that holders will hold our securities issued pursuant to this offering as capital assets within the meaning of the Internal Revenue Code of 1986, as amended (the "Code"). This discussion does not address all aspects of United States federal taxation that may be relevant to a particular investor in light of the investor's individual investment or tax circumstances. In addition, this discussion does not address (a) United States gift or estate tax laws except to the limited extent set forth below, (b) state, local or non-U.S. tax consequences, (c) the special tax rules that may apply to certain investors, including without limitation, banks, insurance companies, financial institutions, broker-dealers, taxpayers who have elected mark-to-market accounting, tax-exempt entities, regulated investment companies, real estate investment trusts, taxpayers whose functional currency is not the U.S. dollar, or United States expatriates or former long-term residents of the United States, or (d) the special tax rules that may apply to an investor that acquires, holds, or disposes of our securities as part of a straddle, hedge, constructive sale, or conversion transaction or other integrated investment. Additionally, the discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our common stock or warrants through such entities.
This discussion is based on current provisions of the Code, final, temporary and proposed United States Treasury Regulations, judicial opinions, and published positions of the Internal Revenue Service, or IRS, all as in effect on the date hereof and all of which are subject to differing interpretations or change, possibly with retroactive effect. We have not sought, and will not seek, any ruling from the IRS or any opinion of counsel with respect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained.
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As used in this discussion, the term "U.S. person" means a person that is, for United States federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in the United States or under the laws of the United States or of any state thereof, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be treated as a U.S. person. As used in this prospectus, the term "U.S. holder" means a beneficial owner of our securities that is a U.S. person and the term "non-U.S. holder" means a beneficial owner of our securities (other than a partnership or other entity treated as a partnership or as a disregarded entity for U.S. federal income tax purposes) that is not a U.S. person.
The tax treatment of a partnership and each partner thereof will generally depend upon the status and activities of the partnership and such partner. A holder that is treated as a partnership for U.S. federal income tax purposes should consult its own tax advisor regarding the U.S. federal income tax considerations applicable to it and its partners of the purchase, ownership and dispositions of units, common stock and warrants.
This discussion is only a summary of material United States federal tax consequences of the acquisition, ownership and disposition of our securities. Investors are urged to consult their own tax advisors with respect to the particular tax consequences to them of the acquisition, ownership and disposition of our securities, including the effect of any state, local, non-U.S. or non-income tax laws and any applicable tax treaty.
General
There is no authority addressing the treatment, for United States federal income tax purposes, of securities with terms substantially the same as the units, and, therefore, such treatment is not entirely clear. Each unit should be treated for federal income tax purposes as an investment unit consisting of one share of our common stock and a warrant to acquire one share of our common stock. Each holder of a unit must allocate the purchase price paid by such holder for such unit between the share of common stock and the warrant based on their respective relative fair market values.
Our view of the characterization of the units described above and a holder's purchase price allocation are not, however, binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, prospective investors are urged to consult their own tax advisors regarding the United States federal tax consequences of an investment in a unit (including alternative characterizations of a unit) and with respect to any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction. Unless otherwise stated, the following discussions are based on the assumption that the characterization of the units and the allocation described above are accepted for United States federal tax purposes.
Tax Consequences of an Investment in our Common Stock
Dividends and Distributions.
If we pay cash distributions to holders of shares of our common stock, such distributions generally will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States
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federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the holder's adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under "—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock" below.
Any dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including but not limited to dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, qualified dividends received by a non-corporate U.S. holder generally will be subject to tax at the maximum tax rate accorded to capital gains for taxable years beginning on or before December 31, 2010, after which the rate applicable to dividends is scheduled to return to the tax rate generally applicable to ordinary income. There is substantial uncertainty, however, whether the conversion rights with respect to the common stock that are described above may prevent a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the capital gains tax rate, as the case may be.
Dividends paid to a non-U.S. holder that are not effectively connected with such non-U.S. holder's conduct of a trade or business in the United States generally will be subject to withholding of United States federal income tax at the rate of 30% or such lower rate as may be specified by an applicable income tax treaty. A non-U.S. holder who wishes to claim the benefit of an applicable tax treaty withholding rate and avoid backup withholding, as discussed below, for dividends will be required to (a) complete IRS Form W-8BEN (or other applicable form) and certify under penalties of perjury that such holder is not a United States person as defined under the Code and is eligible for the benefits of the applicable tax treaty or (b) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable Treasury Regulations. These forms must be updated periodically. Non-U.S. holders should consult their tax advisors regarding their ability to claim benefits under an applicable income tax treaty and the manner of claiming such benefits (including, without limitation, the need to obtain a United States taxpayer identification number).
Dividends that are effectively connected with a non-U.S holder's conduct of a trade or business in the United States, and, if provided is an applicable income tax treaty, dividends that are attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States are subject to United States federal income tax on a net income basis at generally applicable United States federal income tax rates and are not subject to the United States withholding tax, provided that the non-U.S holder establishes an exemption from such withholding by complying with certain certification and disclosure requirements. Any effectively connected dividends or dividends attributable to a permanent establishment received by a non-U.S. holder that is treated as a foreign corporation for United States federal income tax purposes may be subject to an additional "branch profits tax" at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty.
A non-U.S. holder eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
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Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock
In general, a U.S. holder must treat any gain or loss recognized upon a taxable disposition of a share of our common stock (which would include a liquidation in the event we do not consummate a business combination within the required timeframe) as capital gain or loss. Any such capital gain or loss will be long-term capital gain or loss if the U.S. holder's holding period for the disposed of common stock exceeds one year. There is substantial uncertainty, however, whether the conversion rights with respect to the common stock that are described above may prevent a U.S. holder from satisfying the applicable holding period requirements. In general, a U.S. holder will recognize gain or loss in an amount equal to the difference between the sum of the amount of cash and the fair market value of any property received in such disposition and the U.S. holder's adjusted tax basis in the share of common stock. A U.S. holder's adjusted tax basis in the common stock generally will equal the U.S. holder's acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to that common stock) less any prior return of capital. Long-term capital gain realized by a non-corporate U.S. holder generally will be subject to a maximum rate of 15 percent for tax years beginning on or before December 31, 2010, after which the maximum capital gains rate is scheduled to increase to 20 percent. The deduction of capital losses is subject to limitations, as is the deduction for losses realized upon a taxable disposition of our common stock or warrants if the U.S. holder purchases, or enters into a contract or option to purchase, substantially identical securities within 30 days before or after any disposition.
Any gain realized by a non-U.S. holder on the disposition of our common stock generally will not be subject to United States federal income tax unless: (i) the gains is effectively connected with a trade or business of such non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment or fixed place of business of the non-U.S. holder), (ii) the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met, or (iii) we are or have been a "United States real property holding corporation" for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held the common stock, and, in the case where the shares of our common stock are regularly traded on an established securities market, the non-U.S. holder owns more than five percent of the common stock.
Net gain realized by an individual non-U.S. holder described in clause (i) of the preceding sentence will be subject to tax at generally applicable United States federal income tax rates. Any gains of a corporate non-U.S. holder that is described in clause (i) of the preceding sentence may be subject to an additional "branch profits tax" at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty. Gain realized by an individual non-U.S. holder described in clause (ii) of such sentence will be subject to a flat 30 percent tax on the gain derived from the sale, which may be offset by United States source capital losses, even though the individual is not considered a resident of the United States.
We currently are not a "United States real property holding corporation". Moreover, we cannot yet determine whether we will be a "United States real property holding corporation" for United States federal income tax purposes, and will be unable to do so until we effect a business combination. A corporation is a "United States real property holding corporation" if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business.
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Conversion of Common Stock
In the event that a holder converts common stock into a right to receive cash pursuant to the exercise of a conversion right, the transaction will be treated for U.S. federal income tax purposes as a redemption of the common stock. If the conversion qualifies as a sale of common stock by a holder under Section 302 of the Code, the holder will be treated as described under "—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock" above. If the conversion does not qualify as a sale of common stock under Section 302, a holder will be treated as receiving a corporate distribution with the tax consequences described below. Whether the conversion qualifies for sale treatment will depend largely on the total number of shares of our common stock treated as held by the holder (including any common stock constructively owned by the holder as a result of, among other things, owning warrants). The conversion of common stock generally will be treated as a sale or exchange of the common stock (rather than as a corporate distribution) if the receipt of cash upon the conversion (1) is "substantially disproportionate" with respect to the holder, (2) results in a "complete termination" of the holder's interest in the Company or (3) is "not essentially equivalent to a dividend" with respect to the holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a holder takes into account not only stock actually owned by the holder, but also shares of our stock that are constructively owned by it. A holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the holder has an interest or that have an interest in such holder, as well as any stock the stockholder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the holder immediately following the conversion of common stock must, among other requirements, be less than 80 percent of the percentage of our outstanding voting stock actually and constructively owned by the holder immediately before the conversion. There will be a complete termination of a holder's interest if either (1) all of the shares of our stock actually and constructively owned by the holder are converted or (2) all of the shares of our stock actually owned by the holder are converted and the holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the holder does not constructively own any other stock. The conversion of the common stock will not be essentially equivalent to a dividend if a holder's conversion results in a "meaningful reduction" of the holder's proportionate interest in the Company. Whether the conversion will result in a meaningful reduction in a holder's proportionate interest will depend on particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a "meaningful reduction." A holder should consult with its own tax advisors in order to determine the appropriate tax treatment to it of an exercise of a conversion right.
If none of the foregoing tests are satisfied, then the conversion will be treated as a corporate distribution and the tax effects will be as described above under "—Dividends and Distributions". After the application of those rules, any remaining tax basis of the holder in the converted common stock will be added to the holder's adjusted tax basis in his remaining common stock, or, if it has none, to the holder's adjusted tax basis in its warrants or possibly in other common stock constructively owned by it.
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Tax Consequences of an Investment in the Warrants
Exercise of a Warrant
Upon its exercise of a warrant, a holder will not be required to recognize taxable gain or loss with respect to the warrant. The holder's tax basis in the share of our common stock received by such holder will be an amount equal to the sum of the holder's initial investment in the warrant (i.e., the portion of the holder's purchase price for a unit that is allocated to the warrant, as described above under "—General") and the exercise price (i.e., initially, $6.00 per share of our common stock). The holder's holding period for the share of our common stock received upon exercise of the warrant should begin on the date following the date of exercise (or possibly on the date of exercise) of the warrant and will not include the period during which the holder held the warrant.
Sale, Exchange, Call, or Expiration of a Warrant
Upon a sale, exchange (other than by exercise), call, or expiration of a warrant, a U.S. holder will be required to recognize taxable gain or loss in an amount equal to the difference between (i) the amount realized upon such disposition or expiration (or, if the common stock and the warrants are not trading separately at the time of the disposition, the portion of the amount realized on the disposition or expiration that is allocated to the warrant based on the then fair market value of the warrant) and the U.S. holder's tax basis in the warrant (that is, as discussed above, the portion of the U.S. holder's purchase price for a unit that is allocated to the warrant, as described above under "—General"). Such gain or loss would generally be treated as long-term capital gain or loss if the warrant was held by the U.S. holder for more than one year at the time of such disposition or expiration. As discussed above, the deductibility of capital losses is subject to certain limitations.
The federal income tax treatment of a non-U.S. holder's gains recognized on a sale, exchange, redemption, or expiration of a warrant will generally correspond to the federal income tax treatment of a non-U.S. holder's gains recognized on a disposition of our common stock, as described under "—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock" above.
Federal Estate Tax
Shares of our common stock owned or treated as owned by an individual who is not a U.S. citizen or resident of the United States (as specifically defined for U.S. federal estate tax purposes) at the time of death will be included in the individual's gross estate for U.S. federal estate tax purposes unless an applicable estate tax or other treaty provides otherwise, and therefore may be subject to U.S. federal estate tax. The foregoing will also apply to warrants.
Information Reporting and Backup Withholding
Under United States Treasury Regulations, we must report annually to the IRS and to each holder the amount of dividends paid to such holder on our common stock and the tax withheld with respect to those dividends, regardless of whether withholding was required. In the case of a non-U.S. holder, copies of the information returns reporting those dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement.
The gross amount of dividends paid to a holder that fails to provide the appropriate certification in accordance with applicable United States Treasury Regulations generally will be reduced by backup withholding at the applicable rate (currently 28%).
88
A non-U.S. holder is required to certify its foreign status under penalties of perjury or otherwise establish an exemption in order to avoid information reporting and backup withholding on disposition proceeds where the transaction is effected by or through a United States office of a broker. United States information reporting and backup withholding generally will not apply to a payment of proceeds of a disposition of common stock where the transaction is effected outside the United States through a foreign office of a foreign broker. However, information reporting requirements, but not backup withholding, generally will apply to such a payment if the broker is (i) a U.S. person, (ii) a foreign person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, (iii) a controlled foreign corporation as defined in the Code; or (iv) a foreign partnership with certain United States connections, unless the broker has documentary evidence in its records that the holder is a non-U.S. holder and certain conditions are met or the holder otherwise establishes as exemption.
Backup withholding is not an additional tax. Amounts that we withhold under the backup withholding rules may be refunded or credited against the holder's United States federal income tax liability, if any, provided that certain required information is furnished to the IRS in a timely manner. Holders should consult their own tax advisors regarding application of backup withholding in their particular circumstance and the availability of and procedure for obtaining an exemption from backup withholding under current United States Treasury Regulations.
The validity of the securities offered in this prospectus is being passed upon for us by Kaye Scholer LLP, New York, New York. Kramer Levin Naftalis & Frankel LLP, New York, New York, is acting as counsel for the underwriters in this offering.
The financial statements included in this prospectus and in the registration statement have been audited by Rothstein, Kass & Company, P.C., an independent registered public accounting firm, to the extent and for the period set forth in their report appearing elsewhere in this prospectus and in the registration statement. The financial statements and the report of Rothstein, Kass & Company, P.C. are included in reliance upon their report given upon the authority of Rothstein, Kass & Company, P.C. as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1, which includes exhibits, schedules and amendments, under the Securities Act, with respect to this offering of our securities. Although this prospectus, which forms a part of the registration statement, contains all material information included in the registration statement, parts of the registration statement have been omitted as permitted by rules and regulations of the SEC. We refer you to the registration statement and its exhibits for further information about us, our securities and this offering. The registration statement and its exhibits, as well as our other reports filed with the SEC, can be inspected and copied at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549-1004. The public may obtain information about the operation of the public reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a web site at http://www.sec.gov, which contains the Form S-1 and other reports, proxy and information statements and information regarding issuers that file electronically with the SEC.
89
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
| Report of Independent Registered Public Accounting Firm | F-2 | |
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Financial Statements: |
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Balance Sheet |
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F-3 |
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Statement of Operations |
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F-4 |
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Statement of Stockholder's Deficit |
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F-5 |
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Statement of Cash Flows |
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F-6 |
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Notes to Financial Statements |
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F-7–F-10 |
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Information Services Group, Inc.
We have audited the accompanying balance sheet of Information Services Group, Inc. (a corporation in the development stage) (the "Company") as of November 30, 2006 and the related statements of operations, stockholder's deficit and cash flows for the period July 20, 2006 (date of inception) to November 30, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Information Services Group, Inc. (a corporation in the development stage) as of November 30, 2006, and the results of its operations and its cash flows for the period July 20, 2006 (date of inception) to November 30, 2006, in conformity with accounting principles generally accepted in the United States of America.
| /s/ ROTHSTEIN, KASS & COMPANY, P.C. |
Roseland, New Jersey
December 19, 2006, except for
Note H, which is as of December 21, 2006
F-2
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
BALANCE SHEET
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November 30, 2006
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|||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Current assets | ||||||
| Cash | $ | 98,135 | ||||
| Prepaid expenses | 20,984 | |||||
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| Total current assets | 119,119 | |||||
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||||||
| Property and equipment | 41,972 | |||||
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Other assets , deferred offering costs |
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643,807 |
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||
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| $ | 804,898 | |||||
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||||||
| LIABILITIES AND STOCKHOLDER'S DEFICIT | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued expenses | $ | 577,817 | ||||
| Note payable, stockholder | 250,000 | |||||
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| Total current liabilities | 827,817 | |||||
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| Commitments | ||||||
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Stockholder's deficit |
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| Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued | — | |||||
| Common stock, $.001 par value, authorized 75,000,000 shares; 4,687,500 shares issued and outstanding | 4,688 | |||||
| Deficit accumulated during the development stage | (27,607 | ) | ||||
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| Total stockholder's deficit | (22,919 | ) | ||||
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| $ | 804,898 | |||||
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See accompanying notes to financial statements.
F-3
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
STATEMENT OF OPERATIONS
For the period July 20, 2006 (date of inception) to November 30, 2006
| Interest income | $ | 271 | ||
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Formation and operating costs |
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27,878 |
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| Net loss | $ | (27,607 | ) | |
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| Weighted average number of common shares outstanding | 4,687,500 | |||
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| Net loss per common share | $ | (0.01 | ) | |
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See accompanying notes to financial statements.
F-4
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
STATEMENT OF STOCKHOLDER'S DEFICIT
For the period July 20, 2006 (date of inception) to November 30, 2006
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Defict
Accumulated During the Development Stage |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Common Stock
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Additional
Paid in Capital |
Total
Stockholders' Deficit |
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Shares
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Amount
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| Common shares issued | 4,687,500 | $ | 4,688 | $ | 4,687 | $ | 9,375 | ||||||||
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Warrant redemption |
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(4,687 |
) |
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(4,687 |
) |
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Net loss |
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(27,607 |
) |
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(27,607 |
) |
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|||||||||||
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Balances, at November 30, 2006 |
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4,687,500 |
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$ |
4,688 |
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$ |
— |
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$ |
(27,607 |
) |
$ |
(22,919 |
) |
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See accompanying notes to financial statements.
F-5
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
STATEMENT OF CASH FLOWS
For the period July 20, 2006 (date of inception) to November 30, 2006
| Cash flows from operating activities | |||||||
| Net loss | $ | (27,607 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Increase (decrease) in cash attributable to changes in assets and liabilities | |||||||
| Prepaid expenses | (20,984 | ) | |||||
| Accounts payable and accrued expenses | 5,317 | ||||||
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| Net cash used in operating activities | (43,274 | ) | |||||
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| Net cash used in investing activities, purchase of equipment | (41,972 | ) | |||||
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| Cash flows from financing activities | |||||||
| Proceeds from notes payable, stockholder | 250,000 | ||||||
| Payments of offering costs | (71,307 | ) | |||||
| Redemption of warrants | (4,687 | ) | |||||
| Proceeds from issuance of common stock | 9,375 | ||||||
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| Net cash provided by financing activities | 183,381 | ||||||
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| Net increase in cash | 98,135 | ||||||
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Cash , beginning of period |
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— |
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| Cash , end of period | $ | 98,135 | |||||
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|||||||
| Supplemental schedule of non-cash financing activities , accrual of deferred offering costs | $ | 572,500 | |||||
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See accompanying notes to financial statements.
F-6
INFORMATION SERVICES GROUP, INC.
(a corporation in the development stage)
Notes to Financial Statements
NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Information Services Group, Inc. (a corporation in the development stage) (the "Company") was incorporated in Delaware on July 20, 2006. The Company was formed to acquire, through a merger, capital stock exchange, asset or stock acquisition or other similar business combination one or more domestic or international operating businesses. The Company's efforts in identifying a prospective target will not be limited to a particular industry, although the Company intends to focus its efforts on the information services industry, including business, media, marketing and consumer information opportunities. The Company has neither engaged in any operations nor generated significant revenue to date. The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and Reporting By Development Stage Enterprises, and is subject to the risks associated with activities of development stage companies. The Company has selected December 31st as its calendar year end.
The Company's management has broad discretion with respect to the specific application of the net proceeds of this proposed offering of Units (as defined in Note C below) (the "Proposed Offering"), although substantially all of the net proceeds of the Proposed Offering are intended to be generally applied toward consummating a business combination with (or acquisition of) an operating business in the information services industry ("Business Combination"). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Proposed Offering, approximately 99.1% of the gross proceeds of such proposed offering, will be held in a trust account ("Trust Account") and invested in U.S. "government securities," defined as any Treasury Bill issued by the United States government having a maturity of one hundred and eighty (180) days or less, until the earlier of (i) the consummation of its first Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that 20% or more of the outstanding stock (excluding, for this purpose, those shares of common stock issued prior to the Proposed Offering) vote against the Business Combination, the Business Combination will not be consummated. In the event a Business Combination is consummated, public stockholders voting against a Business Combination will be entitled to convert their stock into a pro rata share of the aggregate amount then on deposit in the Trust Account, including their pro rata portion of the deferred underwriting discount and any interest earned on the trust account, net of income taxes payable on the interest income on the Trust Account. However, voting against the Business Combination alone will not result in an election to exercise a stockholder's conversion rights. All of the Company's stockholders prior to the Proposed Offering, including all of the directors and officers of the Company have agreed to vote all of the shares of common stock held by them in accordance with the vote of the majority in interest of all other stockholders of the Company.
In the event that the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Proposed Offering, or 24 months from the consummation of the Proposed Offering if certain extension criteria have been satisfied, the proceeds held in the Trust Account will be distributed to the Company's public stockholders, excluding the existing stockholders to the extent of their initial stock holdings.
F-7
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Company:
The Company complies with the reporting requirements of SFAS No. 7, "Accounting and Reporting by Development Stage Enterprises."
Net loss per common share:
The Company complies with accounting and disclosure requirements of SFAS No. 128, "Earnings Per Share". Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period.
Property and Equipment
Property and Equipment comprised of computer and communications equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight line method over the assets estimated useful lives, generally ranging from 3 to 7 years. Property and equipment were purchased and put into service during November 2006 and, consequently, no depreciation is provided for the period.
Concentration of credit risk:
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, exceeds the Federal depository insurance coverage of $100,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Fair value of financial instruments:
The fair value of the Company's assets and liabilities, which qualify as financial instruments under SFAS No. 107, "Disclosure About Fair Value of Financial Instruments," approximates the carrying amounts represented in the balance sheet.
Use of estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Deferred offering costs:
The Company complies with the requirements of the SEC Staff Accounting Bulletin (SAB) Topic 5A—"Expenses of Offering". Deferred offering costs consist principally of legal and underwriting fees incurred through the balance sheet date that are related to the Proposed Offering and that will be charged to capital upon the completion of the Proposed Offering or charged to expense if the Proposed Offering is not completed.
Income tax:
The Company complies with SFAS 109, "Accounting for Income Taxes," which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,
F-8
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
NOTE C—PROPOSED OFFERING
The Proposed Offering calls for the Company to offer for public sale up to 18,750,000 units ("Units"). Each Unit consists of one share of the Company's common stock, $0.001 par value, and one redeemable common stock purchase warrant ("Warrants"). The expected public offering price will be $8.00 per unit. Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $6.00 commencing on the later of (i) one year from the date of the final prospectus for the Proposed Offering or (ii) the completion of a Business Combination with a target business, and will expire four years from the date of the prospectus. The Warrants will be redeemable at a price of $0.01 per Warrant upon 30 days prior notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of warrants during the exercise period, there will be no cash settlement of the warrants and the warrants will expire worthless.
NOTE D—RELATED PARTY TRANSACTIONS
The Company issued a $100,000 unsecured promissory note to a principal stockholder and affiliate of the Company's officer, Oenoke Partners, LLC, on August 2, 2006. The note bears interest at 5% per annum and is payable on the earlier of August 1, 2007 or the consummation of the Proposed Offering.
In October 2006, the Company issued a $150,000 unsecured promissory note to a principal stockholder and affiliate of the Company's officer, Oenoke Partners, LLC. The note bears interest at 5% per annum and is payable on the earlier of October 3, 2007 or the consummation of the Proposed Offering.
Oenoke Partners, LLC has agreed to purchase, in a private placement, 6,000,000 warrants at $1 per warrant immediately prior to the Proposed Offering from the Company and not as part of the Proposed Offering. As discussed in Note A above, the aggregate proceeds of this private placement of $6 million will be held in trust. Oenoke Partners, LLC also agreed that it will not sell or otherwise transfer the warrants until one year after the Company consummates a Business Combination and will additionally waive its rights to conversion of these shares in connection with the vote on the initial Business Combination and to liquidation proceeds with respect to such shares as part of the Company's plan of dissolution and distribution in the event the Company fails to consummate a Business Combination.
In September 2006, the Company redeemed the 4,687,500 warrants held by Oenoke Partners, LLC, for an aggregate redemption price of $4,687.50 in cash, or a redemption of $0.001 per warrant.
NOTE E—COMMITMENTS
The Company is committed to pay an underwriting discount of 4% of the public unit offering price to the underwriters at the closing of the Proposed Offering, with an additional 3% fee of the gross offering proceeds payable upon the Company's consummation of a Business Combination. The underwriters will not be entitled to any interest accrued on the deferred discount.
The Company has also agreed to sell to the underwriters, for $100, as additional compensation, a four-year option to purchase up to a total of 937,500 units at a per-unit price
F-9
of $9.60. The units issuable upon exercise of this option are also identical to those offered in the Proposed Offering except that warrants included in the option have an exercise price of $7.50.
The sale of the option to purchase, which will be issued upon effectiveness of registration statement, will be accounted for as an equity transaction. Accordingly, there will be no net impact on the Company's financial position or results of operations, except for the recording of the $100 proceeds from the sale.
The Company has determined, based upon a Black-Scholes model, that the fair value of the option on the date of sale would be approximately $3.55 per unit, or approximately $3.3 million in total, using an expected life of four years, volatility of 58.8% and a risk-free interest rate of 4.61%.
The volatility calculation of 58.8% is based on the most recent trading day average volatility of a representative sample of nine (9) companies with market capitalizations of approximately $65 million to $645 million that management believes to be engaged in the business of information services (the "Sample Companies"). Because the Company does not have a trading history, the Company needed to estimate the potential volatility of its common stock price, which will depend on a number of factors which cannot be ascertained at this time. The Company referred to the average volatility of the Sample Companies because management believes that the average volatility of such companies is a reasonable benchmark to use in estimating the expected volatility of the Company's common stock post-business combination. Although an expected life of four years was taken into account for purposes of assigning a fair value to the option, if the Company does not consummate a business combination within the prescribed time period and liquidates, the option would become worthless.
The Company has granted the underwriter a 30-day option to purchase up to 2,812,500 additional units to cover the over-allotment. The over-allotment option will be used only to cover a net short position resulting from the initial distribution.
If the Company is unable to deliver registered shares of common stock to the underwriters upon exercise of the option to purchase Units during the exercise period, there will be no cash settlement of the common stock and warrants underlying the Units and the Units will expire worthless.
NOTE F—PREFERRED STOCK
The Company is authorized to issue 10,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.
NOTE G—LEASES
In September 2006, the Company entered into a lease agreement for office space that extends through September 2007, requiring monthly payments of $10,203. The lease may be extended through September 2008, for monthly payments of $13,203, under two (2) six-month extensions, upon proper notice as defined in the agreement. Aggregate amounts due under this lease agreement through September 2007 are approximately $122,000.
NOTE H—SUBSEQUENT EVENT
On December 21, 2006, the Company issued 703,125 shares of common stock to Oenoke Partners, LLC for an aggregate of $703.125, at a purchase price of $0.001 per share. Such shares are redeemable by the Company to the extent the underwriter's over-allotment option is not exercised.
F-10
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our securities.
TABLE OF CONTENTS
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Page
|
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|---|---|---|
| SUMMARY | 1 | |
| RISK FACTORS | 15 | |
| USE OF PROCEEDS | 34 | |
| DILUTION | 38 | |
| CAPITALIZATION | 40 | |
| MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 41 | |
| PROPOSED BUSINESS | 43 | |
| MANAGEMENT | 62 | |
| PRINCIPAL STOCKHOLDERS | 69 | |
| CERTAIN TRANSACTIONS | 72 | |
| DESCRIPTION OF SECURITIES | 74 | |
| UNDERWRITING | 80 | |
| LEGAL MATTERS | 89 | |
| EXPERTS | 89 | |
| WHERE YOU CAN FIND ADDITIONAL INFORMATION | 89 | |
| INDEX TO FINANCIAL STATEMENTS | F-1 |
Until [ ], 2007, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
$150,000,000
Information Services Group, Inc.
18,750,000 Units
Deutsche Bank Securities
Morgan Joseph
Lazard Capital Markets
Prospectus
, 2007
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount) will be as follows:
| Initial trustee's fee | $ | 1,000 | (1) | |
| SEC registration fee | 34,016 | |||
| NASD filing fee | 32,290 | |||
| Accounting fees and expenses | 60,000 | |||
| Printing and engraving expenses | 125,000 | |||
| Legal fees and expenses | 400,000 | |||
| American Stock Exchange filing fee | 70,000 | |||
| Miscellaneous | 127,694 | (2) | ||
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| Total | $ | 850,000 | ||
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Item 14. Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the DGCL.
Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.
"Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the
II-1
best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office.
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(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees)."
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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Article Nine of our amended and restated certificate of incorporation provides:
"The Corporation shall indemnify to the fullest extent permitted by §145 of the GCL as amended from time to time each person that such section grants the Corporation the power to indemnify. Expenses (including attorneys' fees) incurred by an indemnified person in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such indemnified person may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such indemnified person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby."
Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriters and the Underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
On August 2, 2006, we sold 4,687,500 units, consisting of 4,687,500 shares of our common stock and 4,687,500 warrants to purchase a share of our common stock, to Oenoke Partners, LLC for an aggregate of $9,375 in cash, at an aggregate purchase price of $0.002 per unit, without registration under the Securities Act to Oenoke Partners, LLC pursuant to the exemption from registration contained in Section 4(2) of the Securities Act. On September 29, 2006, we redeemed the 4,687,500 warrants held by Oenoke Partners, LLC for an aggregate redemption price of $4,687.50 in cash, or a redemption price of $0.001 per warrant.
On December 21, 2006, we sold 703,125 shares to Oenoke Partners, LLC. These shares were sold in order to allow for a consistent management ownership percentage of shares sold prior to this offering and prior to the private placement at 20% after this offering (not including the shares sold in the private placement). These shares are subject to repurchase by us to the extent the underwriter's over-allotment option is not exercised.
We have agreed to issue 6,000,000 warrants to Oenoke Partners, LLC, our principal stockholder, prior to the consummation of the offering that is being registered pursuant to this registration statement. The warrants will be sold at a price of $1.00 per warrant and will have an aggregate purchase price of $6,000,000. The warrants will be identical to those being registered pursuant to this registration statement, except that the warrants will not be subject to redemption, they will not be transferable until one year following the date we complete a business combination and can be exercised on a cashless basis. The issuance of the warrants will be made without registration under the Securities Act in reliance on the registration exemption contained in Section 4(2) of the Securities Act for a transaction not involving a public offering. We will not pay any underwriting discount or commission in connection with such issuance.
Each of Michael Connors, Frank Martell, Earl H. Doppelt and Richard G. Gould are "accredited investors" within the meaning of the rules promulgated under the Securities Act of 1933, as amended. As they are the only holders of equity interests in Oenoke Partners, LLC, Oenoke Partners, LLC is also an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act of 1933. As the proposed sales are to be made to Oenoke Partners, LLC, and no other similar sales were made to any other investors, the sales to Oenoke fall within the safe harbor provisions of Regulation D, specifically the sales are exempt from registration pursuant to Rule 506 to the Securities Act of 1933, as amended.
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Item 16. Exhibits and Financial Statement Schedules.
|
Exhibit
No. |
Description
|
|
|---|---|---|
| 1.1 | Form of Underwriting Agreement | |
| 3.1 | Amended and Restated Certificate of Incorporation | |
| 3.2 | Amended and Restated By-Laws | |
| 4.1 | Specimen Unit Certificate | |
| 4.2 | Specimen Common Stock Certificate | |
| 4.3 | Specimen Warrant Certificate | |
| 4.4 | Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant | |
| 4.5 | Form of Unit Purchase Option | |
| 5.1 | Opinion of Kaye Scholer** | |
| 10.1 | Promissory Note issued by Registrant to Oenoke Partners, LLC dated August 2, 2006* | |
| 10.2 | Office Lease Agreement* | |
| 10.3 | Management Unit Purchase Agreement by and between the Registrant and Oenoke Partners, LLC, dated August 2, 2006 | |
| 10.4 | Amendment to Management Unit Purchase Agreement by and between the Registrant and Oenoke Partners, LLC, dated September 29, 2006 | |
| 10.5 | Redemption Agreement by and between the Registrant and Oenoke Partners, LLC, dated September 29, 2006 | |
| 10.6 | Amended and Restated Private Placement Purchase Agreement dated December 21, 2006 between the Registrant and Oenoke Partners, LLC | |
| 10.7 | Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and Registrant | |
| 10.8 | Form of Stock Escrow Agreement by and among Continental Stock Transfer & Trust Company, the Registrant, and Initial Stockholders | |
| 10.9 | Form of Registration Rights Agreement between the Registrant and the existing Stockholders | |
| 10.10 | Promissory Note, issued by the Registrant to Oenoke Partners, LLC, dated October 3, 2006 | |
| 10.11 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.12 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.13 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.14 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.15 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.16 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.17 | Senior Advisor Agreement by and among the Registrant and Barry Holt, dated December 21, 2006 | |
| 10.18 | Senior Advisor Agreement by and among the Registrant and Francis B. Barker, dated December 21, 2006 | |
| 10.19 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.20 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.21 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.22 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.23 | Stockholder's Letter Agreement, dated December 21, 2006 | |
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| 10.24 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.25 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.26 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.27 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.28 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.29 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.30 | Management Stock Purchase Agreement, dated December 21, 2006 | |
| 14.0 | Code of Ethics | |
| 23.1 | Consent of Rothstein, Kass & Company, P.C. | |
| 24 | Power of Attorney (included on the signature page of this Registration Statement)* | |
| 99.1 | Audit Committee Charter | |
| 99.2 | Nominating Committee Charter | |
| 99.3 | Compensation Committee Charter |
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4) That in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 3 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of New Canaan, State of Connecticut, on the 22nd day of December, 2006.
|
|
|
|
||
|---|---|---|---|---|
| Information Services Group, Inc. | ||||
|
|
|
By: |
|
/s/ MICHAEL P. CONNORS Michael P. Connors Chairman and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.
|
Name
|
Position
|
Date
|
||
|---|---|---|---|---|
|
|
|
|
|
|
|
/s/
MICHAEL P. CONNORS
Michael P. Connors |
Chairman and Chief Executive Officer (Principal Executive Officer) | December 22, 2006 | ||
|
/s/ FRANK MARTELL Frank Martell |
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
|
December 22, 2006 |
|
* Robert J. Chrenc |
|
Director |
|
December 22, 2006 |
|
* R. Glenn Hubbard |
|
Director |
|
December 22, 2006 |
|
* Robert E. Weissman |
|
Director |
|
December 22, 2006 |
|
* |
|
/s/ MICHAEL P. CONNORS Attorney-in-fact |
|
|
|
|
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|
Exhibit
No. |
Description
|
|
|---|---|---|
| 1.1 | Form of Underwriting Agreement | |
| 3.1 | Amended and Restated Certificate of Incorporation | |
| 3.2 | Amended and Restated By-Laws | |
| 4.1 | Specimen Unit Certificate | |
| 4.2 | Specimen Common Stock Certificate | |
| 4.3 | Specimen Warrant Certificate | |
| 4.4 | Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant | |
| 4.5 | Form of Unit Purchase Option | |
| 5.1 | Opinion of Kaye Scholer** | |
| 10.1 | Promissory Note issued by Registrant to Oenoke Partners, LLC dated August 2, 2006* | |
| 10.2 | Office Lease Agreement* | |
| 10.3 | Management Unit Purchase Agreement by and between the Registrant and Oenoke Partners, LLC, dated August 2, 2006 | |
| 10.4 | Amendment to Management Unit Purchase Agreement by and between the Registrant and Oenoke Partners, LLC, dated September 29, 2006 | |
| 10.5 | Redemption Agreement by and between the Registrant and Oenoke Partners, LLC, dated September 29, 2006 | |
| 10.6 | Amended and Restated Private Placement Purchase Agreement dated December 21, 2006 between the Registrant and Oenoke Partners, LLC | |
| 10.7 | Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and Registrant | |
| 10.8 | Form of Stock Escrow Agreement by and among Continental Stock Transfer & Trust Company, the Registrant, and Initial Stockholders | |
| 10.9 | Form of Registration Rights Agreement between the Registrant and the existing Stockholders | |
| 10.10 | Promissory Note, issued by the Registrant to Oenoke Partners, LLC, dated October 3, 2006 | |
| 10.11 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.12 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.13 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.14 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.15 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.16 | Stock Transfer Agreement, dated December 21, 2006 | |
| 10.17 | Senior Advisor Agreement by and among the Registrant and Barry Holt, dated December 21, 2006 | |
| 10.18 | Senior Advisor Agreement by and among the Registrant and Francis B. Barker, dated December 21, 2006 | |
| 10.19 | Officer's Letter Agreement, dated December 21, 2006. | |
| 10.20 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.21 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.22 | Officer's Letter Agreement, dated December 21, 2006 | |
| 10.23 | Stockholder's Letter Agreement, dated December 21, 2006 | |
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| 10.24 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.25 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.26 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.27 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.28 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.29 | Stockholder's Letter Agreement, dated December 21, 2006 | |
| 10.30 | Management Stock Purchase Agreement, dated December 21, 2006 | |
| 14.0 | Code of Ethics | |
| 23.1 | Consent of Rothstein, Kass & Company, P.C. | |
| 24 | Power of Attorney (included on the signature page of this Registration Statement)* | |
| 99.1 | Audit Committee Charter | |
| 99.2 | Nominating Committee Charter | |
| 99.3 | Compensation Committee Charter |
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Exhibit 1.1
18,750,000 Units
Information Services Group, Inc.
UNDERWRITING AGREEMENT
, 2007
Deutsche Bank Securities Inc.
As Representative of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005
Ladies and Gentlemen:
Information Services Group, Inc., a Delaware corporation (the “Company”), proposes to sell to the several underwriters (the “Underwriters”) named in Schedule I hereto for whom you are acting as representative (the “Representative”) an aggregate of 18,750,000 units (the “Firm Units”), with each unit consisting of one share of the Company’s common stock, $0.001 par value (the “Common Stock”) and one warrant (“Warrant”) to purchase Common Stock. The respective amounts of the Firm Units to be so purchased by the several Underwriters are set forth opposite their names in Schedule I hereto. The Company also proposes to sell at the Underwriters’ option (“Over-allotment Option”) an aggregate of up to 2,812,500 additional units of the Company (the “Option Units”) as set forth below. The terms of the Warrants are provided for in the form of a Warrant Agreement (as defined herein).
As the Representative, you have advised the Company (a) that you are authorized to enter into this Agreement on behalf of the several Underwriters, and (b) that the several Underwriters are willing, acting severally and not jointly, to purchase the numbers of Firm Units set forth opposite their respective names in Schedule I, plus their pro rata portion of the Option Units if you elect to exercise the Over-allotment Option in whole or in part for the accounts of the several Underwriters. The Firm Units and the Option Units (to the extent the aforementioned option is exercised) are herein collectively called 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 included in the Units are hereinafter referred to as the “Securities.”
Deutsche Bank Securities Inc. (“DBSI”) has agreed to reserve up to 937,500 of the Units to be purchased by it under this Agreement for sale to the Company’s directors, officers, employees and business associates and other parties related to the Company (collectively,
“Participants”), as set forth in the Prospectus (as defined below) under the heading “Underwriting” (the “Directed Unit Program”). The Units to be sold by DBSI and its affiliates pursuant to the Directed Unit Program are referred to hereinafter as the “Directed Units.” Any Directed Units not orally confirmed for purchase by any Participants by the end of the business day on which this Agreement is executed will be offered to the public by the Underwriters as set forth in the Prospectus.
In consideration of the mutual agreements contained herein and of the interests of the parties in the transactions contemplated hereby, the parties hereto agree as follows:
The Company represents and warrants to each of the Underwriters as follows:
(a) A registration statement on Form S-1 (File No. 333-136536) with respect to the Securities has been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder and has been filed with the Commission. Copies of such registration statement, including any amendments thereto, the preliminary prospectuses (meeting the requirements of the Rules and Regulations) contained therein and the exhibits, financial statements and schedules, as finally amended and revised, have heretofore been delivered by the Company to you. Such registration statement, together with any registration statement filed by the Company pursuant to Rule 462(b) under the Act, is herein referred to as the “Registration Statement,” which shall be deemed to include all information omitted therefrom in reliance upon Rules 430A or 430C under the Act and contained in the Prospectus referred to below, has become effective under the Act and no post-effective amendment to the Registration Statement has been filed as of the date of this Agreement (the “Effective Date”). “Prospectus” means the form of prospectus first filed with the Commission pursuant to and within the time limits described in Rule 424(b) under the Act. Each preliminary prospectus included in the Registration Statement prior to the time it becomes effective is herein referred to as a “Preliminary Prospectus.” Any reference herein to the Prospectus shall be deemed to include any supplements or amendments thereto filed with the Commission after the date of filing of the Prospectus under Rule 424(b) under the Act, and prior to the termination of the offering of the Units by the Underwriters. The Company has filed with the Commission a Form 8-A (File Number - ) providing for the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Securities.
(b) As of the Applicable Time (as defined below) and as of the Closing Date or the Option Closing Date, as the case may be, the Statutory Prospectus (as defined below) and the information included on Schedule II hereto, all considered together (collectively, the “General Disclosure Package”) did not and will not include any untrue statement of a material fact and did not and will not 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; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from the General Disclosure Package in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representative specifically for use therein, it being understood and
2
agreed that the only such information is that described in Section 12 herein. The Company has not prepared or used and will not prepare or use a “free writing prospectus” as defined in Rule 405 under the Act, in connection with the offering of Securities. As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 5:00 pm (New York time) on the date of this Agreement or such other time as agreed to by the Company and the Representative.
“Statutory Prospectus” as of any time means the Preliminary Prospectus relating to the Securities that is included in the Registration Statement immediately prior to that time.
(c) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus. The Company has no subsidiaries, direct or indirect. The Company is duly qualified to transact business and in good standing in all jurisdictions in which the conduct of its business requires such qualification.
(d) The outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable. The shares of Common Stock included in the Units have been duly authorized and, when issued and paid for as contemplated herein, will be validly issued, fully paid and non-assessable; and no preemptive rights of stockholders exist with respect to any of such shares or the issue and sale thereof. The shares of Common Stock issuable upon exercise of the Warrants have been duly authorized and, when issued and paid for as contemplated in the Warrants and the Warrant Agreement, will be validly issued, fully paid and non-assessable; and no preemptive rights of stockholders exist with respect to any of such shares or the issue and sale thereof.
(e) The Warrants included in the Units have been duly authorized and, when executed by the Company, countersigned in the manner provided for in the Warrant Agreement and delivered and paid for as contemplated herein, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
(f) Neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any securities of the Company. Except as set forth in the Registration Statement, the General Disclosure Package 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.
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(g) The information set forth under the caption “Capitalization” in the Registration Statement and the Prospectus (and any similar section or information contained in the General Disclosure Package) is true and correct. All of the Securities conform to the descriptions thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus. The form of the certificates for the shares of Common Stock conforms to the General Corporation law of the State of Delaware.
(h) Neither the Commission nor any state regulatory authority has issued an order preventing or suspending the use of any Preliminary Prospectus or the Prospectus relating to the proposed offering of the Units, and no proceeding for that purpose or pursuant to Section 8A of the Act has been instituted or, to the Company’s knowledge, threatened by the Commission or any state regulatory authority. Neither the Commission nor any state regulatory authority has issued any order preventing or suspending the effectiveness of the Registration Statement and no proceeding for that purpose or pursuant to Section 8A of the Act has been instituted or is pending or is contemplated or threatened by the Commission. The Registration Statement contains, and the Prospectus and any amendments or supplements thereto will contain, all statements which are required to be stated therein by, and will conform to, the requirements of the Act and the Rules and Regulations. The Registration Statement and any amendment thereto do not contain, and will not contain, any untrue statement of a material fact and do not omit, and will not omit, to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendments and supplements thereto do not contain, and will not contain, any untrue statement of a material fact; and do not omit, and will not 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; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from the Registration Statement or the Prospectus, or any such amendment or supplement, in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information is that described in Section 12 herein.
(i) The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the offering and sale of the Units other than any Preliminary Prospectus, the Prospectus and other materials, if any, permitted under the Act.
(j) The financial statements of the Company, together with related notes and schedules as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, present fairly the financial position and the results of operations and cash flows of the Company, at the indicated dates and for the indicated periods. Such financial statements and related schedules comply with the applicable accounting requirements of the Act and the Rules and Regulations and have been prepared in accordance with generally accepted principles of accounting (“GAAP”), consistently applied throughout the periods involved, except as disclosed therein, and all adjustments necessary for a fair presentation of results for such periods have been made. The summary and selected financial and statistical data included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein and such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of the Company. The Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet
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obligations or any “variable interest entities” within the meaning of Financial Accounting Standards Board Interpretation No. 46), not disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. There are no financial statements (historical or pro forma) that are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus that are not included as required.
(k) Rothstein, Kass & Company, P.C., who have certified certain financial statements that are filed with the Commission as part of the Registration Statement, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm with respect to the Company within the meaning of the Act and the applicable Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the “PCAOB”).
(l) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company is not aware of (i) any material weakness in its internal control over financial reporting or (ii) change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(m) Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission and the American Stock Exchange thereunder (the “Sarbanes-Oxley Act”) has been applicable to the Company, there is and has been no failure on the part of the Company to comply in all material respects with any provision of the Sarbanes-Oxley Act. The Company has taken all necessary actions to ensure that it is in compliance with all provisions of the Sarbanes-Oxley Act that are in effect and with which the Company is required to comply and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect or which will become applicable to the Company.
(n) There is no action, suit, claim or proceeding pending or, to the knowledge of the Company, threatened against the Company or, to the knowledge of the Company, pending or threatened against any of the Company’s stockholders immediately prior to the offering of Units (the “Initial Stockholders”), before any court or administrative agency or otherwise which if determined adversely to the Company would either (i) have, individually or in the aggregate, a material adverse effect on the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company or (ii) prevent the consummation of the transactions contemplated hereby (the occurrence of any such effect or any such prevention described in the foregoing clauses (i) and (ii) being referred to as a “Material Adverse Effect”), except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus.
(o) The Company has good and marketable title to all of the properties and assets reflected in the financial statements hereinabove described or described in the Registration Statement, the General Disclosure Package and the Prospectus, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those reflected in such financial statements or described in the Registration Statement, the General Disclosure Package and the Prospectus or which are not material in amount.
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(p) Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, as each may be amended or supplemented, there has not been any event or development in respect of the business or condition of the Company that, individually or in the aggregate, would have a Material Adverse Effect, whether or not occurring in the ordinary course of business, and there has not been any material transaction entered into or any material transaction that is probable of being entered into by the Company, other than transactions in the ordinary course of business and changes and transactions described in the Registration Statement, the General Disclosure Package and the Prospectus, as each may be amended or supplemented and no member of the Company’s management has resigned from any position with the Company. The Company has no material contingent obligations which are not disclosed in the Company’s financial statements which are included in the Registration Statement, the General Disclosure Package and the Prospectus.
Subsequent to the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, except as otherwise specifically stated therein or in this Agreement, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
(q) The Company is not, nor with the giving of notice or lapse of time or both, will be, (i) in violation of its certificate of incorporation or by-laws, (ii) in violation of or in default under any agreement, lease, contract, indenture or other instrument or obligation to which it is a party or by which it, or any of its properties, is bound or (iii) in violation of any law, order, rule or regulation, judgment, order, writ or decree applicable to the Company of any court or of any government, regulatory body or administrative agency or other governmental body having jurisdiction over the Company, its properties or assets. The execution, delivery and performance of this Agreement, the Warrant Agreement and the Trust Agreement (as defined below), and the consummation of the transactions herein and therein contemplated and the fulfillment of the terms hereof and thereof will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which the Company or any of its properties is bound, or of the certificate of incorporation or by-laws of the Company or any law, order, rule or regulation judgment, order, writ or decree applicable to the Company of any court or of any government, regulatory body or administrative agency or other governmental body having jurisdiction over the Company, its properties or assets.
(r) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement, the Warrant Agreement and the Trust Agreement have been duly and validly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company. On the Closing Date, the Warrant Agreement and the Trust Agreement will have been duly executed and delivered and they will constitute the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except (i) as such enforceability may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally; (ii) as such enforceability is subject to general principles of equity (regardless of
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whether enforcement is considered in a proceeding in equity or at law); and (iii) as enforceability of any indemnification and contribution provisions may be limited under state or federal securities laws.
(s) Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement, the Warrant Agreement and the Trust Agreement, and the consummation of the transactions herein and therein contemplated (except such additional steps as may be required by the Commission, the National Association of Securities Dealers, Inc. (the “NASD”) or such additional steps as may be necessary to qualify the Securities for public offering by the Underwriters under state securities or Blue Sky laws) has been obtained or made and is in full force and effect.
(t) The Company holds all material licenses, certificates and permits from governmental authorities which are necessary to the conduct of its business.
(u) Neither the Company, nor to the Company’s knowledge, any of its affiliates, has taken or will take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of Common Stock to facilitate the sale or resale of the Securities.
(v) The Company is not and, after giving effect to the offering and sale of the Units contemplated hereunder and the application of the net proceeds from such sale as described in the Registration Statement, the General Disclosure Package and the Prospectus, will not be an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations of the Commission thereunder.
(w) The Company maintains 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 to permit preparation of financial statements in conformity with GAAP 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.
(x) The statistical, industry-related and market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.
(y) The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental
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agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.
(z) Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(aa) The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the “Code”); and each “pension plan” for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
(bb) To the Company’s knowledge, except for Robert E. Weissman, who is a director of the Company and a member of the Board of Directors of State Street Corporation, there are no affiliations or associations between any member of the NASD and any of the Company’s officers, directors or 5% or greater securityholders.
(cc) The Units, the Warrants and the Common Stock have been approved for listing subject to notice of issuance on the American Stock Exchange.
(dd) There are no relationships or related-party transactions involving the Company or any other person required to be described in the Registration Statement, the General Disclosure Package and the Prospectus which have not been described as required.
(ee) The Company has not made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law which violation is required to be disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
(ff) All information contained in the director’s and officer’s questionnaires completed by each of the Company’s Initial Stockholders and provided to the Representative is true and correct in all respects 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 in any respect.
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(gg) 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 Company’s knowledge, any Initial Stockholder that may affect the Underwriters’ compensation, as determined by the NASD. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any NASD member; or (iii) any person or entity that has any direct or indirect affiliation or association with any NASD member, within the twelve months prior to the Effective Date. 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 an initial acquisition or acquisition of control by the Company of one or more assets or operating businesses through a merger, capital stock exchange, asset or stock acquisition or other similar business combination (“Business Combination”) and/or one or more other transactions after the initial Business Combination, including without limitation in connection with the payment of investment banking fees, fees in connection with fairness opinions and the like.
(hh) The Company has entered into a warrant agreement with respect to the Warrants with Continental Stock Transfer & Trust Company substantially in the form of Exhibit 4.4 to the Registration Statement (the “Warrant Agreement”). The Company has entered into the Trust Agreement with respect to certain proceeds of the offering substantially in the form of Exhibit 10.4 to the Registration Statement.
(ii) The Company has caused to be duly executed legally binding and enforceable agreements (except (i) as enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally; (ii) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); and (iii) as enforceability of any indemnification and contribution provisions may be limited under state or federal securities laws) in the form filed as Exhibit 10. to the Registration Statement (the “Insider Letters”), pursuant to which each of the Initial Stockholders of the Company has agreed to certain matters including, but not limited to, certain matters described as being agreed to by him under the “Proposed Business” section of the Registration Statement, the General Disclosure Package and the Prospectus.
(jj) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no Initial Stockholder, employee, officer or director of the Company is subject to any non-competition 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.
(kk) Upon delivery and payment for the Firm Units on the Closing Date, the Company will not be subject to Rule 419 under the Act and none of the Company’s outstanding
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securities will be deemed to be a “penny stock” as defined in Rule 3a-51-1 under the Exchange Act.
(ll) The Company does not have any specific Business Combination under consideration or contemplation and the Company has not, nor has anyone on its behalf, either directly or indirectly, contacted any potential target business or their representatives or had any discussions, formal or otherwise, with any of the foregoing with respect to effecting a business combination with the Company. The Company has not engaged or retained any agent or other representative to identify or locate any suitable target.
(mm) No consent, approval, authorization or order of, or qualification with, any governmental body or agency, other than those obtained, is required in connection with the offering of the Directed Units in any jurisdiction where the Directed Units are being offered.
(nn) The Company has not offered, or caused DBSI or its affiliates to offer, Units to any person pursuant to the Directed Unit Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business with the Company, or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.
(a) On the basis of the representations, warranties and covenants herein contained, and subject to the conditions herein set forth, the Company agrees to sell to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase, at a price of $7.68 per Unit (the “Initial Purchase Price”) (less $0.24 per Unit purchased hereunder (the “Deferred Discount”) payable to the Underwriters upon consummation of a Business Combination, subject to Section 4(gg) hereof), the number of Firm Units set forth opposite the name of each Underwriter in Schedule I hereof, subject to adjustments in accordance with Section 13 hereof.
(b) Payment for the Firm Units to be sold hereunder is to be made in Federal (same day) funds against delivery of certificates therefor to the Representative for the several accounts of the Underwriters. Such payment and delivery are to be made through the facilities of The Depository Trust Company (“DTC”), New York, New York at 10:00 a.m., New York time, on the third business day after the date of this Agreement (or the fourth business day following the date of this Agreement, if the offering is priced after 4:30 p.m., New York time) or at such other time and date not later than five business days thereafter as you and the Company shall agree upon, such time and date being herein referred to as the “Closing Date.” (As used herein, “business day” means a day on which the New York Stock Exchange is open for trading and on which banks in New York are open for business and are not permitted by law or executive order to be closed.) Payment of $144,000,000, representing the aggregate purchase price for the Firm Units based on the Initial Purchase Price, shall be made on the Closing Date by wire transfer in Federal (same day) funds, as follows: $142,650,000 (including $4,500,000, representing the aggregate Deferred Discount without giving effect to the Over-allotment Option) shall be deposited by the Representative directly in the trust account established by the Company for the benefit of the public securityholders as described in the Registration Statement (the “Trust
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Account”) pursuant to the terms of an Investment Management Trust Agreement (the “Trust Agreement”), and the remaining $1,350,000 of the proceeds (representing $500,000 of the proceeds not required to be held in the Trust Account and $850,000 of offering expenses), shall be paid to the Company, upon delivery to you of certificates (in form and substance satisfactory to the Representative) representing the Firm Units (or through the facilities of DTC) for the account of the Underwriters. The certificates for the Firm Units will be delivered in such denominations and in such registrations as the Representative requests in writing not later than the second full business day prior to the Closing Date, and will be made available for inspection by the Representative at least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants the Over-allotment Option to the several Underwriters to purchase the Option Units at the price per Unit as set forth in the first paragraph of this Section 2. The Over-allotment Option granted hereby may be exercised in whole or in part by giving written notice at any time within 30 days after the date of this Agreement, by you, as Representative of the several Underwriters, to the Company setting forth the number of Option Units as to which the several Underwriters are exercising the option and the time and date at which such certificates are to be delivered. The time and date at which certificates for Option Units are to be delivered shall be determined by the Representative but shall not be earlier than three nor later than 10 full business days after the exercise of such option, nor in any event prior to the Closing Date (such time and date being herein referred to as the “Option Closing Date”). If the date of exercise of the option is three or more days before the Closing Date, the notice of exercise shall set the Closing Date as the Option Closing Date. The number of Option Units to be purchased by each Underwriter shall be in the same proportion to the total number of Option Units being purchased as the number of Firm Units being purchased by such Underwriter bears to the total number of Firm Units, adjusted by you in such manner as to avoid fractional units. The Over-allotment Option granted hereunder may be exercised only to cover over-allotments in the sale of the Firm Units by the Underwriters. You, as Representative of the several Underwriters, may cancel such option at any time prior to its expiration by giving written notice of such cancellation to the Company. To the extent, if any, that the option is exercised, payment for the Option Units shall be made on the Option Closing Date in Federal (same day funds) through the facilities of DTC in New York, New York drawn to the order of the Company. Payment for the Option Units shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, as follows: $7.68 per Option Unit sold (including the Deferred Discount) shall be deposited in the Trust Account pursuant to the Trust Agreement upon delivery to you of certificates (in form and substance satisfactory to the Representative) representing the Option Units sold (or through the facilities of DTC) for the account of the Underwriters.
It is understood that the several Underwriters are to make a public offering of the Firm Units as soon as the Representative deems it advisable to do so. The Firm Units are to be initially offered to the public at the initial public offering price set forth in the Prospectus. The Representative may from time to time thereafter change the public offering price and other selling terms. It is further understood that you will act as the Representative for the Underwriters
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in the offering and sale of the Units in accordance with a Master Agreement Among Underwriters entered into by you and the several other Underwriters.
The Company covenants and agrees with the several Underwriters that:
(a) The Company will (A) prepare and timely file with the Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form approved by the Representative containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rules 430A or 430C of the Rules and Regulations and (B) not file any amendment to the Registration Statement or distribute an amendment or supplement to the General Disclosure Package or the Prospectus of which the Representative shall not previously have been advised and furnished with a copy or to which the Representative shall have reasonably objected in writing or which is not in compliance with the Rules and Regulations.
(b) The Company will not make any offer relating to the Securities that would constitute a “free writing prospectus” (as defined in Rule 405 under the Act) required to be filed by the Company with the Commission under Rule 433 under the Act.
(c) The Company will advise the Representative promptly (A) when the Registration Statement or any post-effective amendment thereto shall have become effective, (B) of receipt of any comments from the Commission, (C) of any request of the Commission for amendment of the Registration Statement or for supplement to the General Disclosure Package or the Prospectus or for any additional information, and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the institution of any proceedings for that purpose or pursuant to Section 8A of the Act. The Company will use its reasonable best efforts to prevent the issuance of any such order and to obtain as soon as possible the lifting thereof, if issued.
(d) The Company will cooperate with the Representative in endeavoring to qualify the Securities for sale under the securities laws of such jurisdictions as the Representative may reasonably have designated in writing and will make such applications, file such documents, and furnish such information as may be reasonably required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent. The Company will, from time to time, prepare and file such statements, reports, and other documents, as are or may be required to continue such qualifications in effect for so long a period as the Representative may reasonably request for distribution of the Securities.
(e) The Company will deliver to, or upon the order of, the Representative, from time to time, as many copies of any Preliminary Prospectus as the Representative may reasonably request. The Company will deliver to, or upon the order of, the Representative during the period when delivery of a Prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under the Act) is required under the Act, as many copies of the Prospectus in final form, or as thereafter amended or supplemented, as the Representative may reasonably request.
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The Company will deliver to the Representative at or before the Closing Date, four signed copies of the Registration Statement and all amendments thereto including all exhibits filed therewith, and will deliver to the Representative such number of copies of the Registration Statement (including such number of copies of the exhibits filed therewith that may reasonably be requested), and of all amendments thereto, as the Representative may reasonably request.
(f) The Company will comply with the Act and the Rules and Regulations, and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Units as contemplated in this Agreement and the Prospectus. If during the period in which a prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under the Act) is required by law to be delivered by an Underwriter or dealer, any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading, or, if it is necessary at any time to amend or supplement the Prospectus to comply with any law, the Company promptly will prepare and file with the Commission an appropriate amendment to the Registration Statement or supplement to the Prospectus so that the Prospectus as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Prospectus will comply with the law.
(g) If the General Disclosure Package is being used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of the Underwriters, it becomes necessary to amend or supplement the General Disclosure Package in order to make the statements therein, in the light of the circumstances, not misleading, or to make the statements therein not conflict with the information contained in the Registration Statement then on file, or if it is necessary at any time to amend or supplement the General Disclosure Package to comply with any law, the Company promptly will prepare, file with the Commission (if required) and furnish to the Underwriters and any dealers an appropriate amendment or supplement to the General Disclosure Package.
(h) The Company will make generally available to its security holders, as soon as it is practicable to do so, but in any event not later than 15 months after the Effective Date, an earnings statement (which need not be audited) in reasonable detail, covering a period of at least 12 consecutive months beginning after the Effective Date, which earnings statement shall satisfy the requirements of Section 11(a) of the Act and Rule 158 under the Act and will advise you in writing when such statement has been so made available.
(i) Prior to the Closing Date, the Company will furnish to the Underwriters, as soon as they have been prepared by or are available to the Company, a copy of any unaudited interim financial statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Registration Statement and the Prospectus.
(j) Except for securities issued in the Private Placement (as defined below), the Company hereby agrees that until the Company consummates a Business Combination, it shall not issue any shares of Common Stock or any options or other securities convertible into
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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. Notwithstanding the foregoing, if (1) during the last 17 days of the restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or (2) prior to the expiration of the restricted period, the Company announces that it will release earnings results during the 16-day period following the last day of the restricted period, then in each case the restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day period beginning on the date of the release of the earnings results or the occurrence of material news or a material event relating to the Company, as the case may be, unless the Representative waives, in writing, such extension.
(k) The Company will use its best efforts to effect and maintain the listing of the Securities on the American Stock Exchange (“AMEX”).
(l) The Company shall apply the net proceeds of its sale of the Securities as set forth in the Registration Statement, General Disclosure Package and the Prospectus and shall file such reports with the Commission with respect to the sale of the Securities and the application of the proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(m) The Company will maintain a transfer agent, warrant agent and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the Units, Common Stock and Warrants, as applicable.
(n) The Company will not take, directly or indirectly, any action that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company.
(o) The Company will comply with all applicable securities and other applicable laws, rules and regulations in each jurisdiction in which the Directed Units are offered in connection with the Directed Unit Program.
(p) For a period of four years from the Effective Date, or such earlier time upon which the Company is required to be liquidated, the Company will use its reasonable best efforts to maintain the registration of the Securities under the provisions of the Exchange Act.
(q) For a period of four years from the Effective Date, or until such earlier date upon which the Company is required to be liquidated, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior to the announcement of quarterly financial information and the filing of the Company’s Form 10-Q quarterly report.
(r) The Company shall not consummate a Business Combination with any Initial Stockholder, or officer or director of the Company, or any entity which is affiliated with any Initial Stockholder or officer or director of the Company without first obtaining an opinion
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from an independent investment banking firm that such Business Combination is fair to the Company’s stockholders from a financial point of view.
Except as described in the Registration Statement, General Disclosure Package and the Prospectus, the Company shall not pay any Initial Stockholder or any of their affiliates or family members any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the consummation of an initial Business Combination; provided that the Initial Stockholders shall be entitled to reimbursement from the Company, subject to approval by the Board of Directors of the Company, for their reasonable out-of-pocket expenses incurred in connection with seeking and consummating an initial Business Combination.
(s) The Company will take all necessary actions to ensure that, upon and at all times after the effectiveness of the Registration Statement, it will be in compliance with (i) all provisions of the Sarbanes-Oxley Act that are then in effect and applicable to it and shall take such steps as are necessary to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect upon the effectiveness of such provisions to the extent they are applicable to the Company and (ii) the requirements of the American Stock Exchange’s AMEX Company Guide.
(t) For a period of four years from the Effective Date or until such earlier time upon which the Company is required to be liquidated, the Company, upon request from the Representative, will furnish to the Representative (Attn: Syndicate Manager with a copy to: General 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 securities, and promptly furnish to the Representative: (i) a copy of such registration statements, financial statements and periodic and special reports as the Company shall be required to file with the Commission and from time to time furnishes generally to holders of any such class of its securities; and (ii) 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, all subject to the execution of a confidentiality agreement reasonably satisfactory to the Company.
(u) For a period equal to four years from the date hereof or until such earlier time upon which the Company is required to be liquidated, the Company will not take any action or actions which may prevent or disqualify the Company’s use of Form S-1 (or other appropriate form) for the registration of the Warrants and the Common Stock issuable upon exercise of the Warrants, under the Act.
(v) In the event any person or entity (excluding attorneys, accountants 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 merger candidate, the Company will provide the following to the NASD and the Representative prior to consummation of an initial Business Combination: (i) copies of agreements governing said services (which details or agreements may be appropriately redacted to account for privilege or confidentiality concerns), 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
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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 initial Business Combination.
(w) 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.
(x) 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 (the “Audited Financial Statements”) reflecting the receipt by the Company of the proceeds of the initial public offering. As soon as the Audited Financial Statements become available, the Company shall promptly file a Current Report on Form 8-K with the Commission, which Report shall contain the Company’s Audited Financial Statements. In addition, upon receipt of the proceeds from the sale of any Option Units after the Closing Date, the Company shall promptly file a second or amended Current Report on Form 8-K with the Commission, which Report shall provide updated financial information to reflect the receipt of such additional proceeds.
Upon the earlier to occur of (i) the expiration or termination of the Over-allotment Option and (ii) the exercise in full of the Over-allotment Option, the Company shall, subject to having filed the Current Report(s) on Form 8-K pursuant to the previous paragraph, promptly issue a press release announcing that separate trading of the Warrants and Common Stock will begin on the AMEX.
(y) The Company shall advise the NASD if it is aware that any 5% or greater securityholder of the Company (other than the Representative or its affiliates) becomes an affiliate or associated person of an NASD member participating in the distribution of the Securities.
(z) The Company shall, as set forth in the Trust Agreement and disclosed in the Prospectus, cause the proceeds of the offering to be held in the Trust Account to be invested only in “government securities” within the meaning of Section 2(a)(16) of the 1940 Act with a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act with specific maturity dates. The Company will otherwise use its best efforts to conduct its business (both prior to and after the consummation of an initial Business Combination) in a manner so that it will not become subject to the 1940 Act.
(aa) The Company hereby agrees that prior to commencing its due diligence investigation of any assets or operating business which the Company seeks to acquire (“Target Business”) or obtaining the services of any vendor or service provider or other entity it will use its reasonable best efforts to attempt to cause the Target Business or the vendor or service
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provider or other entity with which the Company executes an agreement to execute a waiver letter in the form attached hereto as Exhibit A and B, respectively. It is understood that the Company may not be able to obtain such letters in some or all circumstances and that, nonetheless, the Company may still proceed with such due diligence investigations and enter into agreements with such parties or obtaining of services, as applicable. Furthermore, prior to commencing such due diligence investigation, each officer and director of the Company (other than the Initial Stockholders) shall execute a waiver letter in the form attached hereto as Exhibit C.
(bb) 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 certificate of incorporation or by-laws and, the Company shall not take any action to amend or modify the provisions of its certificate of incorporation that apply to the Company during the period commencing upon the filing of the certificate of incorporation with the Delaware Secretary of State and terminating upon the consummation of a Business Combination, which action would result in such amendment or modification becoming effective prior to an initial Business Combination.
(cc) The Company agrees: (i) that, prior to the consummation of any Business Combination, it will submit such transaction to the Company’s stockholders for their approval (“Initial Transaction 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 as described in the Prospectus. With respect to the Initial Transaction Vote, the Company shall use its reasonable best efforts to cause all of the Initial Stockholders to vote all shares of Common Stock owned by them and acquired prior to this offering (the “Initial Shares”), in accordance with the vote of the majority of the IPO Shares (as hereinafter defined) voted (in person or by proxy), at a meeting of the Company’s stockholders called for the Initial Transaction Vote. At the time the Company seeks approval of any potential initial Business Combination, the Company will offer each of the holders of the Company’s Common Stock issued in this offering (the “IPO Shares”), which holders were holders on the record date for determination of stockholders entitled to vote, the right to convert such holder’s IPO Shares at a per share price (the “Conversion Price”) equal to the amount in the Trust Account (inclusive of any interest income therein, net of income taxes, and including the Deferred Discount) as of two business days prior to the consummation of the Business Combination divided by the total number of IPO Shares (including any shares held by the Initial Stockholders). If the Company elects to proceed with a Business Combination, it will promptly after the consummation of such Business Combination convert shares, based upon the Conversion Price, from those holders of IPO Shares who affirmatively requested such conversion and who voted against the initial Business Combination; provided that such holders continue to hold such IPO Shares through consummation of the Business Combination. If a majority of the IPO Shares that are voted are not voted in favor of any initial Business Combination or holders of 20% or more of the IPO Shares vote against approval of any potential initial Business Combination and exercise their conversion rights, the Company will not proceed with such initial Business Combination and will not convert such shares.
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(dd) 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 “penny stock” as defined in Rule 3a-51-1 under the Exchange Act during such period.
(ee) The Company agrees that the initial Target Business(es) that it acquires must have an aggregate fair market value equal to at least 80% of the Company’s net assets (including the funds held in the Trust Account other than the portion representing the Deferred Discount) at the time of such acquisition. The fair market value of such business(es) must be determined by the Board of Directors of the Company based upon standards the Board believes are generally accepted by the financial community. If the Board of Directors of the Company is not able to independently determine that the Target Business(es) have an aggregate fair market value equal to at least 80% of the Company’s net assets (excluding the Deferred Discount) at the time of such acquisition, the Company will obtain an opinion from an unaffiliated, independent third party appraiser, which may or may not be an investment banking firm which is a member of the NASD, with respect to the satisfaction of such criteria. The Company is not required to obtain an opinion from a third party as to the fair market value if the Company’s Board of Directors independently determines that the Target Business(es) have sufficient fair market value.
(ff) The Company shall deposit into the Trust Account the $6,000,000 of proceeds from the private placement (“Private Placement”) of 6,000,000 Warrants to Oenoke Partners, LLC, to be completed on or prior to the Closing Date.
(gg) Within five days of the earlier to occur of the expiration or termination of the Over-allotment Option, the Company shall purchase shares of Common Stock from Oenoke Partners, LLC at a price of $0.001 per share, in an amount (up to 703,125 shares of Common Stock) sufficient to cause the Initial Stockholders to maintain control over Initial Shares in an amount equal to 20% of the Company’s outstanding Common Stock after giving effect to the offering of the Units and the exercise, if any, of the Over-allotment Option. If the Underwriters exercise the Over-allotment Option in full, the Company shall not be required to purchase any shares of Common Stock pursuant to this subsection.
(hh) Upon consummation of the initial Business Combination, the Company shall pay to the Representative, on behalf of the Underwriters, the Deferred Discount, minus $0.24 per IPO Share converted to cash in accordance with the Company’s certificate of incorporation.
The Company will pay all costs, expenses and fees incident to the performance of the obligations of the Company under this Agreement, including, without limiting the generality of the foregoing, the following: accounting fees of the Company; the fees and disbursements of counsel for the Company; the cost of printing and delivering to, or as requested by, the Underwriters copies of the Registration Statement, Preliminary Prospectuses, the Prospectus, this Agreement and the Listing Application; the filing fees of the Commission; the filing fees and
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expenses (including legal fees and disbursements) incident to securing any required review by the NASD of the terms of the sale of the Units; and the Listing Fee of the American Stock Exchange. The Company agrees to pay all costs and expenses of the Underwriters, including the reasonable fees and disbursements of one counsel for the Underwriters, incident to the offer and sale of Directed Units by the Underwriters to employees and persons having business relationships with the Company and the Subsidiaries. The Company shall not, however, be required to pay for any of the Underwriters’ expenses except that, if this Agreement shall not be consummated because the conditions in Section 6 hereof are not satisfied, or because this Agreement is terminated by the Representative pursuant to Section 10(a)(i) hereof, or by reason of any failure, refusal or inability on the part of the Company to perform any undertaking or satisfy any condition of this Agreement or to comply with any of the terms hereof on its part to be performed, unless such failure, refusal or inability is due primarily to the default or omission of any Underwriter, the Company shall reimburse the several Underwriters for reasonable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred in connection with investigating, marketing and proposing to market the Units or in contemplation of performing their obligations hereunder; but the Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits from the sale by them of the Units.
The several obligations of the Underwriters to purchase the Firm Units on the Closing Date and the Option Units, if any, on the Option Closing Date are subject to the accuracy, as of the Applicable Time, the Closing Date or the Option Closing Date, as the case may be, of the representations and warranties of the Company contained herein, and to the performance by the Company of its covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto shall have become effective and the Prospectus shall have been filed as required by Rule 424 under the Act, within the time period prescribed by, and in compliance with, the Rules and Regulations, and any request of the Commission for additional information (to be included in the Registration Statement or otherwise) shall have been disclosed to the Representative and complied with to its reasonable satisfaction. No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued and no proceedings for that purpose or pursuant to Section 8A under the Act shall have been taken or, to the knowledge of the Company, shall be contemplated or threatened by the Commission and no injunction, restraining order or order of any nature by a Federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance of the Units.
(b) The Representative shall have received on the Closing Date or the Option Closing Date, as the case may be, the opinion of Kaye Scholer LLP, counsel for the Company, dated the Closing Date or the Option Closing Date, as the case may be, addressed to the Underwriters (and stating that it may be relied upon by counsel to the Underwriters) in the form agreed upon by the Representative.
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In rendering such opinion Kaye Scholer LLP may rely as to matters governed by the laws of states other than New York or Federal laws on local counsel in such jurisdictions, provided that in each case Kaye Scholer LLP shall state that they believe that they and the Underwriters are justified in relying on such other counsel. In addition to the matters set forth above, such opinion shall also include a statement to the effect that no facts have come to the attention of such counsel that caused them to believe that (i) the Registration Statement, at the time it became effective under the Act (including the information deemed to be a part of the Registration Statement at the time it became effective pursuant to Rules 430A or 430C under the Act), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the General Disclosure Package, as of the Applicable Time, contained an untrue statement of a material fact or omitted 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 and (iii) the Prospectus, or any supplement thereto, as of its date and as of the Closing Date or the Option Closing Date, as the case may be, contained or contains an untrue statement of a material fact or omitted or omits 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 (except that such counsel need express no view as to financial statements and schedules and other financial data therein).
(c) The Representative shall have received on and as of the Closing Date or the Option Closing Date, as the case may be, an opinion and statement of Kramer Levin Naftalis & Frankel LLP, counsel for the Underwriters, with respect to such matters as the Representative may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(d) You shall have received, on each of the date hereof, the Closing Date and, if applicable, the Option Closing Date, a letter dated the date hereof, the Closing Date or the Option Closing Date, as the case may be, in form and substance satisfactory to you, of Rothstein, Kass & Company, P.C. confirming that they are an independent registered public accounting firm with respect to the Company within the meaning of the Act and the applicable Rules and Regulations and the PCAOB and stating that in their opinion the financial statements and schedules examined by them and included in the Registration Statement, the General Disclosure Package and the Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the related Rules and Regulations; and containing such other statements and information as are ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial and statistical information contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(e) The Representative shall have received on the Closing Date and, if applicable, the Option Closing Date, as the case may be, a certificate or certificates of the Chief Executive Officer and the Chief Financial Officer of the Company to the effect that, as of the Closing Date or the Option Closing Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act and no stop order suspending the effectiveness of the Registration Statement and no order
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preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued, and no proceedings for such purpose or pursuant to Section 8A of the Act have been taken or are, to his or her knowledge, contemplated or threatened by the Commission;
(ii) The representations and warranties of the Company contained in Section 1 hereof are true and correct as of the Closing Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules 424, 430A, 430B or 430C under the Act have been made as and when required by such rules;
(iv) He or she has carefully examined the General Disclosure Package and, in his or her opinion, as of the Applicable Time, the statements contained in the General Disclosure Package did not contain any untrue statement of a material fact, and such General Disclosure Package did not 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;
(v) He or she has carefully examined the Registration Statement and, in his or her opinion, as of the effective date of the Registration Statement, the Registration Statement and any amendments thereto did not contain any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement to or an amendment of the Prospectus which has not been so set forth in such supplement or amendment;
(vi) He or she has carefully examined the Prospectus and, in his or her opinion, as of its date and the Closing Date or the Option Closing Date, as the case may be, the Prospectus and any amendments and supplements thereto did not contain any untrue statement of a material fact and did not 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; and
(vii) Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company, whether or not arising in the ordinary course of business.
(f) The Company shall have furnished to the Representative such further certificates and documents confirming the representations and warranties, covenants and conditions contained herein and related matters as the Representative may reasonably have requested.
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(g) The Firm Units and Option Units, if any, have been duly listed, subject to notice of issuance, on the American Stock Exchange.
(h) The Company shall have delivered to the Representative executed copies of the Trust Agreement, the Warrant Agreement, and each of the Insider Letters.
(i) The NASD has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
The opinions and certificates mentioned in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in all material respects reasonably satisfactory to the Representative and to Kramer Levin Naftalis & Frankel LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representative by notifying the Company of such termination in writing at or prior to the Closing Date or the Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be under any obligation to each other (except to the extent provided in Sections 5 and 8 hereof).
The obligations of the Company to sell and deliver the portion of the Securities required to be delivered as and when specified in this Agreement are subject to the conditions that at the Closing Date or the Option Closing Date, as the case may be, no stop order suspending the effectiveness of the Registration Statement shall have been issued and in effect or proceedings therefor initiated or threatened.
(a) The Company agrees:
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omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 12 herein; and
(b) Each Underwriter severally and not jointly will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding; provided, however, that each Underwriter will be liable in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission has been made in the Registration Statement, any Preliminary Prospectus, the Prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 12 herein. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to this Section 8, such person (the “indemnified party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”) in writing. No indemnification provided for in Section 8(a) or (b) shall be available to any party who shall fail to give notice as provided in this Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure
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to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which it or they may have to the indemnified party for contribution or otherwise than on account of the provisions of Section 8(a) or (b). In case any such proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party and shall pay as incurred the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel at its own expense. Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or within 30 days of presentation) the fees and expenses of the counsel retained by the indemnified party in the event (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or (iii) the indemnifying party shall have failed to assume the defense and employ counsel acceptable to the indemnified party within a reasonable period of time after notice of commencement of the action. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm for all such indemnified parties. Such firm shall be designated in writing by you in the case of parties indemnified pursuant to Section 8(a) or (b) and by the Company in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. In addition, the indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding of which indemnification may be sought hereunder (whether or not any indemnified party is an actual or potential party to such claim, action or proceeding) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action or proceeding.
(d) The Company, agrees to indemnify and hold harmless DBSI and its affiliates and each person, if any, who controls DBSI or its affiliates within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (i) caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of the Company for distribution to Participants in connection with the Directed Unit Program, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) caused by the failure of any Participant to pay for and accept delivery of Directed Units that the Participant has agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Unit Program other than losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of DBSI.
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(e) To the extent the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under Section 8(a), (b) or (d) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 8(e) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 8(e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 8(e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (e), (i) no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter and (ii) no person guilty of 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. The Underwriters’ obligations in this Section 8(e) to contribute are several in proportion to their respective underwriting obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any Preliminary Prospectus, the Prospectus or any supplement or amendment thereto, each party against whom contribution may be sought under this Section 8 hereby consents to the jurisdiction of any court having jurisdiction over any other contributing party, agrees that process issuing from such court may be served upon it by any other contributing party and consents to the service of such process and agrees that any other contributing party may join it as an additional defendant in any such proceeding in which such other contributing party is a party.
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(g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Company, its directors or officers or any persons controlling the Company, (ii) acceptance of any Units and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to any Underwriter, or any person controlling any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.
All communications hereunder shall be in writing and, except as otherwise provided herein, will be mailed, delivered, telecopied or telegraphed and confirmed as follows: if to the Underwriters, to Deutsche Bank Securities Inc., 60 Wall Street, 4th Floor, New York, New York 10005; Attention: Syndicate Manager, with a copy to Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005, Attention: General Counsel; if to the Company to Information Services Group, Inc., Four Stamford Plaza, 107 Elm Street, Stamford, Connecticut 06902, Attention: Chief Executive Officer.
This Agreement may be terminated by you by notice to the Company (i) at any time prior to the Closing Date or any Option Closing Date (if different from the Closing Date and then only as to Option Units) if any of the following has occurred: (i) since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, any material adverse change or any development involving a prospective material adverse change in or affecting the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company, whether or not arising in the ordinary course of business, (ii) any outbreak or escalation of hostilities or declaration of war or national emergency or other national or international calamity or crisis or material change in economic or political conditions if the effect of such outbreak, escalation, declaration, emergency, calamity, crisis or material change on the financial markets of the United States would, in your judgment, make it impracticable or inadvisable to market the Units or to enforce contracts for the sale of the Units, (iii) suspension of trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the Nasdaq Global Market or limitation on prices (other than limitations on hours or numbers of days of trading) for securities on any such Exchange, (iv) the enactment, publication, decree or other promulgation of any statute, regulation, rule or order of any court or other governmental authority which in your reasonable opinion materially and adversely affects or may materially and adversely affect the business or operations of the Company, (v) the declaration of a banking moratorium by United States or New York State authorities, (vi) the suspension of trading of the Company’s securities by the American Stock Exchange, the Commission, or any other governmental authority or (vii) the taking of any action by any
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governmental body or agency in respect of its monetary or fiscal affairs which in your reasonable opinion has a material adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 13 of this Agreement.
This Agreement has been and is made solely for the benefit of the Underwriters and the Company and their respective successors, executors, administrators, heirs and assigns, and the officers, directors and controlling persons referred to herein, and no other person will have any right or obligation hereunder. No purchaser of any of the Units from any Underwriter shall be deemed a successor or assign merely because of such purchase.
The Company and the Underwriters acknowledge and agree that the only information furnished or to be furnished by any Underwriter to the Company for inclusion in the Registration Statement, any Preliminary Prospectus, or the Prospectus consists of the information set forth in the third, twelfth and thirteenth paragraphs under the caption “Underwriting” in the Prospectus.
If on the Closing Date or the Option Closing Date, as the case may be, any Underwriter shall fail to purchase and pay for the portion of the Units which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), you, as Representative of the Underwriters, shall use your reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Units which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours you, as such Representative, shall not have procured such other Underwriters, or any others, to purchase the Units agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Units with respect to which such default shall occur does not exceed 10% of the Units to be purchased on the Closing Date or the Option Closing Date, as the case may be, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Units which they are obligated to purchase hereunder, to purchase the Units which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Units with respect to which such default shall occur exceeds 10% of the Units to be purchased on the Closing Date or the Option Closing Date, as the case may be, the Company or you as the Representative of the Underwriters will have the right, by written notice given within the next 36-hour period to the parties to this Agreement, to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Sections 5 and 8 hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Section 13, the Closing Date or Option Closing Date, as the case may be, may be postponed for such period, not exceeding seven days, as you, as Representative, may determine in order that the required changes in the Registration Statement, the General Disclosure Package or in the Prospectus or in any other documents or
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arrangements may be effected. The term “Underwriter” includes any person substituted for a defaulting Underwriter. Any action taken under this Section 13 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
The reimbursement, indemnification and contribution agreements contained in this Agreement and the representations, warranties and covenants in this Agreement shall remain in full force and effect regardless of (a) any termination of this Agreement, (b) any investigation made by or on behalf of any Underwriter or controlling person thereof, or by or on behalf of the Company or its directors or officers and (c) delivery of and payment for the Securities under this Agreement.
The Company acknowledges and agrees that each Underwriter in providing investment banking services to the Company in connection with the offering of Securities, including in acting pursuant to the terms of this Agreement, has acted and is acting as an independent contractor and not as a fiduciary and the Company does not intend such Underwriter to act in any capacity other than as an independent contractor, including as a fiduciary or in any other position of higher trust.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.
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If the foregoing letter is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the Company and the several Underwriters in accordance with its terms.
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INFORMATION SERVICES GROUP, INC. |
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The foregoing Underwriting Agreement |
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DEUTSCHE BANK SECURITIES INC. |
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As Representative of the several |
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By: Deutsche Bank Securities Inc. |
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SCHEDULE I
Schedule of Underwriters
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Number of Firm Units
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Deutsche Bank Securities Inc. |
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Morgan Joseph & Co., Inc. |
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Lazard Capital Markets, LLC |
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Total |
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18,750,000 |
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EXHIBIT A
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, Connecticut 06902
Gentlemen:
Reference is made to the Final Prospectus of Information Services Group, Inc. (“ISG”), dated , 2007 (the “Prospectus”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand that ISG has established the Trust Account, initially in an amount of $148,650,000 for the benefit of the Public Stockholders and that ISG may disburse monies from the Trust Account only (i) to the Public Stockholders in the event of the redemption of their shares or the liquidation of ISG, (ii) to ISG in an aggregate amount of up to $3,000,000 of interest accrued from the Trust Account for working capital or (iii) to ISG after it consummates an initial Business Combination.
For and in consideration of ISG agreeing to evaluate the undersigned for purposes of consummating an initial Business Combination with it, the undersigned hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account (the “Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with ISG and will not seek recourse against the Trust Account for any reason whatsoever.
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Print Name of Target Business |
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Authorized Signature of Target Business |
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EXHIBIT B
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, Connecticut 06902
Gentlemen:
Reference is made to the Final Prospectus of Information Services Group, Inc. (“ISG”), dated , 2007 (the “Prospectus”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand that ISG has established the Trust Account, initially in an amount of $148,650,000 for the benefit of the Public Stockholders and that ISG may disburse monies from the Trust Account only: (i) to the Public Stockholders in the event of the redemption of their shares or the liquidation of ISG, (ii) to ISG in an aggregate amount of up to $3,000,000 of interest accrued from the Trust Account for working capital or (iii) to ISG after it consummates an initial Business Combination.
For and in consideration of ISG engaging the services of the undersigned, the undersigned hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account (the “Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with ISG and will not seek recourse against the Trust Account for any reason whatsoever.
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EXHIBIT C
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, Connecticut 06902
Gentlemen:
Reference is made to the Final Prospectus of Information Services Group, Inc. (“ISG”), dated , 2007 (the “Prospectus”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
The undersigned officer or director of ISG hereby acknowledges that ISG has established the Trust Account, initially in an amount of $148,650,000 for the benefit of the Public Stockholders in accordance with and subject to the terms of this letter.
The undersigned hereby waives any claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company to or against the Trust Account and will not seek recourse against the Trust Account for any reason whatsoever except to the extent the undersigned is entitled to be indemnified by the Company pursuant to the Company’s Certificate of Incorporation, as amended to the date hereof.
Notwithstanding the foregoing, such waiver shall not apply to any shares acquired by the undersigned in the public market.
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34
Exhibit 3.1
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
INFORMATION SERVICES GROUP, INC.
Information Services Group, Inc., a corporation duly organized and existing under the laws of the State of Delaware (the “ Corporation ”), by its Chairman of the Board and Chief Executive Officer, hereby certifies as follows:
1. The name of the corporation is “Information Services Group, Inc.”
2. The Corporation’s original Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on July 20, 2006.
3. This Amended and Restated Certificate of Incorporation restates, integrates and amends the Certificate of Incorporation of the Corporation.
4. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with the applicable provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (“ GCL ”).
5. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated to read in full as follows:
FIRST: The name of the corporation is “Information Services Group, Inc.”
SECOND: The address of the Corporation’s registered office in Delaware is 2711 Centerville Road, Suite 400, Wilmington (New Castle County), Delaware 19808. Corporation Service Company is the Corporation’s registered agent at that address.
THIRD: Subject to the last sentence of Section (C) of Article SIXTH, the purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the GCL.
FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 85,000,000 of which 75,000,000 shares shall be Common Stock of the par value of $.001 per share and 10,000,000 shares shall be Preferred Stock of the par value of $.001 per share.
A. Preferred Stock . The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences
and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “ Preferred Stock Designation ”) and as may be permitted by the GCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.
B. Common Stock . Except as otherwise required by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote.
FIFTH: [Reserved].
SIXTH: The following provisions (A) through (D) shall apply during the period commencing upon the filing of this Certificate of Incorporation and terminating upon the consummation of any “Business Combination,” and may not be amended during the “Acquisition Period” without the unanimous consent of our stockholders. A “ Business Combination ” shall mean the acquisition by the Corporation, 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 domestic or international operating businesses which have an aggregate fair market value equal to at least 80% of the Corporation’s net assets at the time of such acquisition (all of the Corporation’s assets, including the funds held in the Trust Fund (as defined below) including all accrued interest (net of (1) income taxes payable on the interest income on the Trust Fund, (2) up to $3,000,000 of interest income on the Trust Fund net of income taxes payable on this amount, released to the Corporation to fund its working capital requirements, and (3) any deferred underwriting discount), less the Corporation’s liabilities). The “ Acquisition Period ” shall mean the period from the effectiveness of the registration statement filed in connection with the Corporation’s initial public offering (“ IPO ”) up to and including the first to occur of (a) a Business Combination or (b) the Termination Date (defined below).
A. Prior to the consummation of any Business Combination, the Corporation shall submit such Business Combination to its stockholders for approval regardless of whether the Business Combination is of a type which normally would require such stockholder approval under the GCL. In the event that a majority of the IPO Shares (defined below) cast at the meeting to approve the Business Combination are voted for the approval of such Business Combination, the Corporation shall be authorized to consummate the Business Combination;
provided that the Corporation shall not consummate any Business Combination if the holders of 20% or more of the IPO Shares exercise their conversion rights described in paragraph B below.
B. In the event that a Business Combination is approved in accordance with the above paragraph (A) and is consummated by the Corporation, any stockholder of the Corporation holding shares of Common Stock issued in the IPO (“ IPO Shares ”) who voted shares against the Business Combination (the “ Convertible Shares ”) may, contemporaneous with such vote, demand that the Corporation convert such Convertible Shares into cash. If so demanded, the Corporation shall, as soon as reasonably practicable after consummation of the Business Combination, convert such shares into cash at a per share conversion price equal to the quotient determined by dividing (i) the amount in the Trust Fund (as defined below), inclusive of any interest thereon (but net of (x) income taxes payable on the interest income on the Trust Fund and (y) any interest earned on the Trust Fund and released to the Corporation to fund working capital requirements), calculated as of two business days prior to the consummation of the Business Combination, by (ii) the total number of IPO Shares. “ Trust Fund ” shall mean the trust account established by the Corporation at the consummation of its IPO and into which a certain amount of the net proceeds of the IPO is deposited.
C. In the event that the Corporation does not consummate a Business Combination by the expiration of the later of (i) 18 months after the consummation of the IPO or (ii) 24 months after the consummation of the IPO in the event that either a letter of intent, an agreement in principle or a definitive agreement to complete a Business Combination was executed but was not consummated within such 18 month period (such later date being referred to as the “ Termination Date ”), the Corporations’s Board of Directors shall adopt, within 15 days after the Termination Date, a resolution finding the dissolution of the Corporation advisable and provide notices to the Corporation’s stockholders as required by § 275(a) of the GCL as soon as reasonably practicable thereafter. From and after the Termination Date, our corporate purposes and powers shall immediately thereupon be limited to acts and activities relating to dissolving and winding up the affairs of the Corporation, including liquidation, and the Corporation shall not engage in any other business activities.
D. A holder of IPO Shares shall be entitled to receive distributions from the Trust Fund only in the event of a liquidation of the Corporation or in the event such holder demands conversion of such holder’s shares in accordance with paragraph B, above. In no other circumstances shall a holder of IPO Shares have any right or interest of any kind in or to the Trust Fund. In addition, up to $3,000,000 of the interest earned on the Trust Fund (net of taxes payable on this interest) may be released to the Corporation to cover a portion of the Corporation’s operating expenses.
E. The Board of Directors shall be divided into three classes: Class I, Class II and Class III. The number of directors in each class shall be as nearly equal as possible. Upon the filing of this Certificate of Incorporation, the Chairman of the Board of Directors shall become a Class III director for a term expiring at the Corporation’s third Annual Meeting of
Stockholders. The Class III director shall then appoint additional Class I, Class II and Class III directors, as necessary. The directors in Class I shall be elected for a term expiring at the first Annual Meeting of Stockholders, the directors in Class II shall be elected for a term expiring at the second Annual Meeting of Stockholders and the directors in Class III shall be elected for a term expiring at the third Annual Meeting of Stockholders. Commencing at the first Annual Meeting of Stockholders, and at each annual meeting thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. Except as the GCL may otherwise require, in the interim between annual meetings of stockholders or special meetings of stockholders called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum (as defined in the Corporation’s Bylaws), or by the sole remaining director. All directors shall hold office until the expiration of their respective terms of office and until their successors shall have been elected and qualified. A director elected to fill a vacancy resulting from the death, resignation or removal of a director shall serve for the remainder of the full term of the director whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified.
SEVENTH: The Board of Directors shall have the power to make, alter or repeal the by-laws of the Corporation.
EIGHTH: The election of the Board of Directors need not be by written ballot.
NINTH: The Corporation shall indemnify to the fullest extent permitted by §145 of the GCL as amended from time to time each person that such section grants the Corporation the power to indemnify. Expenses (including attorneys’ fees) incurred by an indemnified person in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such indemnified person may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such indemnified person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby.
TENTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director for any act or omission, except that such director may be liable (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under §174 of the GCL or (iv) for any transaction from which the director derived an improper personal benefit.
ELEVENTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under §291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under §279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
TWELFTH: The Corporation elects not to be governed by §203 of the GCL.
IN WITNESS WHEREOF, the Corporation has caused this Third Amended and Restated Certificate of Incorporation to be signed by Michael Connors, its Chairman of the Board and Chief Executive Officer, as of the 21st day of December, 2006.
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/s/ Michael Connors |
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Michael P. Connors |
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Chairman of the Board and |
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Chief Executive Officer |
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Exhibit 3.2
AMENDED AND RESTATED BYLAWS OF
INFORMATION SERVICES GROUP, INC.
(the “Corporation”)
1. OFFICES.
1.1 Registered Office . The address of the Corporation’s registered office in Delaware is 2711 Centerville Road, Suite 400, Wilmington (New Castle County), Delaware 19808. Corporation Service Company is the Corporation’s registered agent at that address.
1.2 Other Offices . The Corporation may also have offices at such other places, within or outside the State of Delaware, as the board of directors of the Corporation (the “Board”) may from time to time determine or the business of the Corporation may require.
2. MEETINGS OF STOCKHOLDERS .
2.1 Place and Time of Meetings . Meetings of the stockholders may be held within or outside Delaware at the place and time specified by the Board or the directors or stockholders requesting the meeting.
2.2 Annual Meeting . The annual meeting of stockholders shall be held on such date and at such time as may be determined by the Board, and shall be held at a place and time determined by the Board, except that no annual meeting need be held if all actions, including the election of directors, required by the Delaware General Corporation Law to be taken at a stockholders’ annual meeting are taken by written consent in lieu of meeting pursuant to 2.8 of the Bylaws.
2.3 Special Meetings . Special meetings of the stockholders may be called by resolution of the Board, by the Chairman of the Board or by the Chief Executive Officer and shall be called by the Chief Executive Officer or Secretary upon the written request (stating the purpose or purposes of the meeting) of a majority of the directors then in office or of the holders of a majority of the outstanding shares entitled to vote. Only business related to the purposes set forth in the notice of the meeting may be transacted at a special meeting.
2.4 Notice of Meetings; Waiver of Notice . Written notice of each meeting of stockholders shall be given to each stockholder entitled to vote at the meeting, except that (a) it shall not be necessary to give notice to any stockholder who submits a signed waiver of notice before or after the meeting and (b) no notice of an adjourned meeting need be given except when required by law or under Section 2.5 of these Bylaws. Each notice of a meeting shall be given, personally or by mail, not less than 10 nor more than 60 days before the meeting and shall state the time and place of the meeting, and unless it is the annual meeting, shall state at whose direction or request the meeting is called and the purposes for which it is called. If mailed, notice shall be considered given when mailed to a stockholder at his address on the Corporation’s records. The attendance of any stockholder at a meeting, without protesting at the beginning of the meeting that the meeting is not lawfully called or convened, shall constitute a waiver of notice by him.
2.5 Quorum . At any meeting of stockholders, the presence in person or by proxy of the holders of a majority of the shares entitled to vote shall constitute a quorum for the transaction of any business. In the absence of a quorum, a majority in voting interest of those present or, if no stockholders are present, any officer entitled to preside at or to act as secretary of the meeting, may adjourn the meeting until a quorum is present. At any adjourned meeting at which a quorum is present any action may be taken which might have been taken at the meeting as originally called. No notice of an adjourned meeting need be given if the time and place are announced at the meeting at which the adjournment is taken except that, if adjournment is for more than 30 days or if, after the adjournment, a new record date is fixed for the meeting, notice of the adjourned meeting shall be given pursuant to Section 2.4 of these Bylaws.
2.6 Voting; Proxies . Each stockholder of record shall be entitled to one vote for every share registered in his name. Corporate action to be taken by stockholder vote, other than the election of directors, shall be authorized by a majority of the votes cast at a meeting of stockholders, except as otherwise provided by law by the Corporation’s Certificate of Incorporation or by Section 2.8 of these Bylaws. Directors shall be elected in the manner provided in Section 3.1 of these Bylaws. Voting need not be by ballot unless requested by a stockholder at the meeting. Each stockholder entitled to vote at any meeting of stockholders or to express consent to or dissent from corporate action in writing without a meeting may authorize another person to act for him by proxy. Every proxy must be signed by the stockholder or his attorney-in-fact. No proxy shall be valid after three years from its date unless it provides otherwise.
2.7 List of Stockholders . Not less than 10 days prior to the date of any meeting of stockholders, the Secretary of the Corporation shall prepare a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in his name. For a period of not less than 10 days prior to the meeting, the list shall be available during ordinary business hours for inspection by any stockholder for any purpose germane to the meeting. During this period, the list shall be kept either (a) at a place within the city where the meeting is to be held, if that place shall have been specified in the notice of the meeting, or (b) if not so specified, at the place where the meeting is to be held. The list shall also be available for inspection by stockholders at the time and place of the meeting.
2.8 Action by Consent Without a Meeting . Any action required or permitted to be taken at any meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting. Prompt notice of the taking of any such action shall be given to those stockholders who did not consent in writing.
3. BOARD OF DIRECTORS .
3.1 Number, Qualification, Election and Term of Directors . The business of the Corporation shall be managed by the Board, which shall initially consist of not less than one director. The number of directors may be changed by resolution of a majority of the Board or by
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the stockholders, but no decrease may shorten the term of any incumbent director. Except as set forth in the Certificate of Incorporation, directors shall be elected at each annual meeting of stockholders by a plurality of votes cast and shall hold office until the next annual meeting of stockholders and until the election and qualification of their respective successors, subject to the provisions of Section 3.9 of these Bylaws. As used in these Bylaws, the term “entire Board” means the total number of directors which the Corporation would have if there were no vacancies on the Board.
3.2 Quorum and Manner of Acting . A majority of the directors then in office shall constitute a quorum for the transaction of business at any meeting, except as provided herein or in the Certificate of Incorporation. Action of the Board shall be authorized by the vote of a majority of the directors present at the time of the vote if there is a quorum, unless otherwise provided by law, by these Bylaws. In the absence of a quorum a majority of the directors present may adjourn any meeting from time to time until a quorum is present.
3.3 Place of Meetings . Meetings of the Board may be held in or outside Delaware.
3.4 Annual and Regular Meetings . The Board will hold meetings on at least a quarterly basis. The independent directors shall meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in executive session without the presence of non-independent directors and management. Meetings of the Board, for the election of officers and consideration of other matters, shall be held either (a) without notice immediately after the annual meeting of stockholders and at the same place or (b) as soon as practicable after the annual meeting of stockholders, on notice as provided in Section 3.6 of these Bylaws. Regular meetings of the Board may be held without notice at such times and places as the Board determines. If the day fixed for a regular meeting is a legal holiday, the meeting shall be held on the next business day.
3.5 Special Meetings . Special meetings of the Board may be called by the Chief Executive Officer or by a majority of the directors. Only business related to the purposes set forth in the notice of meeting may be transacted at a special meeting.
3.6 Notice of Meetings; Waiver of Notice . Notice of the time and place of each special meeting of the Board, and of each annual meeting not held immediately after the annual meeting of stockholders and at the same place, shall be given to each director by mailing it to him at his residence or usual place of business at least three days before the meeting, or by delivering or telephoning or telegraphing it to him at least two days before the meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called. Notice need not be given to any director who submits a signed waiver of notice before or after the meeting or who attends the meeting without protesting at the beginning of the meeting the transaction of any business because the meeting was not lawfully called or convened. Notice of any adjourned meeting need not be given, other than by announcement at the meeting at which the adjournment is taken.
3.7 Board or Committee Action Without a Meeting . Any action required or permitted to be taken by the Board or by any committee of the Board may be taken without a meeting if all of the members of the Board or of the committee consent in writing to the adoption of a
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resolution authorizing the action. The resolution and the written consents by the members of the Board or the committee shall be filed with the minutes of the proceeding of the Board or of the committee.
3.8 Participation in Board or Committee Meetings by Conference Telephone . Any or all members of the Board or of any committee of the Board may participate in a meeting of the Board or of the committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at the meeting.
3.9 Resignation and Removal of Directors . Any director may resign at any time by delivering his resignation in writing to the Chief Executive Officer or Secretary of the Corporation, to take effect at the time specified in the resignation. The acceptance of a resignation, unless required by its terms, shall not be necessary to make it effective. Any or all of the directors may be removed at any time, either with or without cause, by vote of the stockholders.
3.10 Vacancies . Any vacancy in the Board, including one created by an increase in the number of directors, shall, be filled by the Board.
3.11 Compensation . Directors may receive reasonable compensation, if any, as the Board determines, together with reimbursement of their reasonable expenses in connection with the performance of their duties. A director may also be paid for serving the Corporation, its affiliates or subsidiaries in other capacities.
4. COMMITTEES .
4.1 Committees . The Board, by resolution adopted by a majority of the entire Board, may designate committees of one or more directors, which shall serve at the pleasure of the Board and shall have such powers and duties as the Board determines.
4.2 Rules Applicable to Committees . The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of a committee, the member or members present at a meeting of the committee and not disqualified, whether or not a quorum, may unanimously appoint another director to act at the meeting in the place of the absent or disqualified member. All action of a committee shall be reported to the Board at its next meeting. Each committee shall adopt rules of procedure and shall meet as provided by those rules or by resolutions of the Board.
5. OFFICERS .
5.1 Number; Security . The executive officers of the Corporation shall be a Chief Executive Officer, a Secretary and a Treasurer and such other executive officers as the Board may appoint at any time. Any two or more offices may be held by the same person. The Board may require any officer, agent or employee to give security for the faithful performance of his duties.
4
5.2 Election; Term of Office . The executive officers of the Corporation shall be elected annually by the Board, and each such officer shall hold office until his resignation, death or removal by the Board or until the election of his successor, subject to the provisions of Section 5.4 of these Bylaws.
5.3 Subordinate Officers . The Board may appoint subordinate officers (including assistant secretaries and assistant treasurers), agents or employees, each of whom shall hold office for such period and have such powers and duties as the Board determines. The Board may delegate to any executive officer or to any committee the power to appoint and define the powers and duties of any subordinate officers, agents or employees.
5.4 Resignation and Removal of Officers . Any officer may resign at any time by delivering his resignation in writing to the Chief Executive Officer or Secretary of the Corporation, to take effect at the time specified in the resignation; the acceptance of a resignation, unless required by its terms, shall not be necessary to make it effective. Any officer appointed by the Board or appointed by an executive officer or by a committee may be removed by the Board either with or without cause, and in the case of an officer appointed by an executive officer or by a committee, by the officer or committee who appointed him.
5.5 Vacancies . A vacancy in any office may be filled for the unexpired term in the manner prescribed in Sections 5.2 and 5.3 of these Bylaws for election or appointment to the office.
5.6 Chief Executive Office . The Chief Executive Officer shall be the Chief Executive Officer of the Company. Subject to the control of the Board, he shall have general supervision over the business of the Company and shall have such other powers and duties as chief executive officers and presidents of companies usually have or as the Board assigns to him.
5.7 Treasurer . The Treasurer shall be the chief financial officer of the Corporation and shall be in charge of the Corporation’s books and accounts. Subject to the control of the Board, he shall have such other powers and duties as the Board or the Chief Executive Officer assigns to him.
5.8 Secretary . The Secretary shall be the Secretary of, and shall keep the minutes of, all meetings of the Board and of the stockholders, shall be responsible for giving notice of all meetings of stockholders and of the Board, and shall keep the seal and, when authorized by the Board, apply it to any instrument requiring it. Subject to the control of the Board, he shall have such powers and duties as the Board or the Chief Executive Officer assigns to him. In the absence of the Secretary from any meeting, the minutes shall be kept by the person appointed for that purpose by the presiding officer.
5.9 Compensation . The Board may fix the officers’ salaries, if any, or it may authorize the Chief Executive Officer to fix the salary of any other officer.
6. SHARES .
6.1 Certificates . The Corporation’s shares shall be represented by certificates in the form approved by the Board. Each certificate shall be signed by the Chief Executive Officer,
5
and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificate may be a facsimile.
6.2 Transfers . Shares shall be transferable only on the Corporation’s books, upon surrender of the certificate for the shares, properly endorsed. The Board may require satisfactory surety before issuing a new certificate to replace a certificate claimed to have been lost or destroyed.
6.3 Determination of Stockholders of Record . The Board may fix, in advance, a date as the record date for the determination of stockholders entitled to notice of or to vote at any meeting of the stockholders, or to express consent to or dissent from any proposal without a meeting, or to receive payment of any dividend or the allotment of any rights or for the purpose of any other action. The record date may not be more than 60 or less than 10 days before the date of the meeting or more than 60 days before any other action.
7. MISCELLANEOUS
7.1 Seal . The Board may adopt a corporate seal and use the same by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
7.2 Fiscal Year . The Board may determine the Corporation’s fiscal year. Unless and until changed by the Board, the Corporation’s fiscal year shall be the calendar year ending December 31.
7.3 Voting of Shares in Other Corporations . Shares in other corporations which are held by the Corporation may be represented and voted by the Chief Executive Officer of this Corporation or by proxy or proxies appointed by such officer. The Board may, however, appoint some other person to vote the shares.
7.4 Amendments . These Bylaws may be amended, repealed or adopted by the stockholders or by a majority of the entire Board, but any Bylaw adopted by the Board may be amended or repealed by the stockholders.
6
EXHIBIT 4.1
NUMBER
UNITS
U-
SEE REVERSE FOR
CERTAIN DEFINITIONS
INFORMATION SERVICES GROUP, INC.
CUSIP
UNITS CONSISTING OF ONE
SHARE OF COMMON STOCK AND
ONE WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK
THIS CERTIFIES THAT is the owner of Units.
Each Unit (“Unit”) consists of one (1) share of common stock, par value $0.001 per share (“Common Stock”), of Information Services Group, Inc., a Delaware corporation (the “Corporation”), and one warrant (the “Warrant”). The Warrant entitles the holder to purchase one (1) share of Common Stock for [$6.00/$7.50] per share (subject to adjustment). The Warrant will become exercisable on the later of (i) the Corporation’s completion of an acquisition of one or more domestic or international or operating businesses through a merger, capital stock exchange, asset acquisition or other similar business combination and (ii) [one year after the effective date of the registration statement relating to the initial public offering of the Units], and will expire unless exercised before 5:00 p.m., New York City time, on , 2011 [four years after the effective date of the registration statement relating to the initial public offering of the Units], or earlier upon redemption (the “Expiration Date”). The Common Stock and Warrants comprising the Units represented by this certificate are not transferable separately prior to five business days following the earlier to occur of (1) the expiration or termination of the underwriter’s over-allotment option in connection with the Corporation’s initial public offering or (2) the exercise in full of such underwriter’s over-allotment option, subject in either case to the Corporation filing a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting the Corporation’s receipt of the gross proceeds of its initial public offering and issuing a press release announcing when such separate trading will begin. The terms of the Warrant are governed by a Warrant Agreement, dated as of , 2007, between the Corporation and Continental Stock Transfer & Trust Company, as Warrant Agent, and are subject to the terms and provisions contained therein, all of which terms and provisions the holder of this certificate consents to by acceptance hereof. Copies of the Warrant Agreement are on file at the office of the Warrant Agent at 17 Battery Place, New York, New York 10004, and are available to any Warrant holder on written request and without cost.
This certificate is not valid unless countersigned by the Transfer Agent and Registrar of the Corporation.
1
Witness the facsimile seal of the Corporation and the facsimile signature of its duly authorized officers.
INFORMATION SERVICES
GROUP, INC.
CORPORATE
DELAWARE
SEAL
2006
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By: |
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Chairman of the Board |
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Secretary |
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By: |
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Transfer Agent |
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INFORMATION SERVICES GROUP, INC.
The Corporation will furnish without charge to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof of the Corporation and the qualifications, limitations, or restrictions of such preferences and/or rights.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
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TEN COM |
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as tenants in common |
UNIF GIFT MIN ACT |
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Custodian |
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TEN ENT |
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as tenants by the entireties |
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JT TEN |
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as joint tenants with
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under Uniform Gifts to |
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not as tenants in common |
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Minors Act |
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Additional Abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
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Signature(s) Guaranteed: |
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15). |
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EXHIBIT 4.2
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NUMBER |
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SHARES |
INFORMATION
SERVICES GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK
SEE
REVERSE FOR
CERTAIN DEFINITIONS
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THIS CERTIFIES THAT |
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CUSIP |
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $0.0001 EACH OF THE COMMON STOCK OF
INFORMATION SERVICES GROUP, INC.
TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED BY THE TRANSFER AGENT AND REGISTERED BY THE REGISTRAR. WITNESS THE SEAL OF THE CORPORATION AND THE FACSIMILE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS.
DATED:
INFORMATION
SERVICES GROUP, INC.
CORPORATE
DELAWARE
SEAL
2006
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By: |
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Chairman of the Board |
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Secretary |
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By: |
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Transfer Agent |
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1
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
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TEN COM |
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as tenants in common |
UNIF GIFT MIN ACT |
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Custodian |
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TEN ENT |
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as tenants by the entireties |
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(Cust) |
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JT TEN |
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as joint tenants with right of survivorship and not as tenants in common |
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under Uniform Gifts to |
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Minors Act |
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Additional Abbreviations may also be used though not in the above list.
INFORMATION SERVICES GROUP, INC.
The Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof of the Corporation and the qualifications, limitations, or restrictions of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Certificate of Incorporation and all amendments thereto and resolutions of the Board of Directors providing for the issue of shares of Preferred Stock (copies of which may be obtained from the secretary of the Corporation), to all of which the holder of this certificate by acceptance hereof assents.
FOR VALUE RECEIVED, HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS,
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SHARES OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. |
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DATED: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever. |
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Signature(s) Guaranteed: |
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15). |
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The holder of this certificate shall be entitled to receive funds from the trust fund only in the event of the Corporation’s liquidation upon failure to consummate a business combination or if the holder seeks to convert his respective shares into cash upon a business combination which he voted against and which is actually completed by the Corporation. In no other circumstances shall the holder have any right or interest of any kind in or to the trust fund.
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EXHIBIT 4.3
FORM OF WARRANT
THIS WARRANT CERTIFICATE (I) CANNOT BE TRANSFERRED OR EXCHANGED UNTIL THE EARLIER TO OCCUR OF THE EXPIRATION OF THE UNDERWRITER’S OPTION TO PURCHASE UP TO 2,812,500 ADDITIONAL UNITS TO COVER OVER-ALLOTMENTS OR THE EXERCISE IN FULL BY THE UNDERWRITER OF SUCH OPTION (THE “DETACHMENT DATE”) UNLESS INCLUDED WITH A SHARE OF COMMON STOCK OF INFORMATION SERVICES GROUP, INC. AS PART OF A UNIT AND (II) CANNOT BE EXERCISED IN WHOLE OR IN PART UNTIL THE LATER OF THE COMPANY’S COMPLETION OF A BUSINESS COMBINATION AND [ ], 2008 [ONE YEAR FROM THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT].
EXERCISABLE
ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN.
Warrant
Certificate evidencing
Warrants to Purchase Common Stock, par value $.001, as described herein.
INFORMATION SERVICES GROUP, INC.
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No. |
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CUSIP No. [ ] |
VOID
AFTER 5:00 P.M., NEW YORK CITY TIME, ON [ ],
2010,
OR UPON EARLIER REDEMPTION
This certifies that , or its registered assigns, is the registered holder of warrants to purchase certain securities (each a “WARRANT”). Each Warrant entitles the holder thereof, subject to the provisions contained herein and in the Warrant Agreement (as defined below), to purchase from Information Services Group, Inc., a Delaware corporation (the “COMPANY”), one share of the Company’s Common Stock (each a “SHARE”), at the Exercise Price set forth below. The exercise price of each Warrant (the “EXERCISE PRICE”) shall be $ initially, subject to adjustments as set forth in the Warrant Agreement.
Subject to the terms of the Warrant Agreement, each Warrant evidenced hereby may be exercised in whole, but not in part, at any time, as specified herein, on any Business Day (as defined below) occurring during the period (the “EXERCISE PERIOD”) commencing on the later of the Company’s completion of a Business Combination (as defined below) and [ ], 2008 and ending at 5:00 P.M., New York City time, on the earlier to occur of [ ], 2011 or the Redemption Date (the “EXPIRATION DATE”). Each Warrant remaining unexercised after 5:00 P.M., New York City time on the Expiration Date shall become void, and all rights of the holder of this Warrant Certificate evidencing such Warrant shall cease.
The holder of the Warrants represented by this Warrant Certificate may exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M., New York City time, on
any Business Day during the Exercise Period (the “EXERCISE DATE”) to Continental Stock Transfer & Trust Company (the “WARRANT AGENT”, which term includes any successor warrant agent under the Warrant Agreement described below) at its corporate trust department at 17 Battery Place, New York, NY 10004, (i) this Warrant Certificate, (ii) an election to purchase (“ELECTION TO PURCHASE”), properly executed by the holder hereof on the reverse of this Warrant Certificate (the “PARTICIPANT”) substantially in the form included on the reverse of hereof, as applicable and (iii) the Exercise Price for each Warrant to be exercised in lawful money of the United States of America by certified or official bank check or by bank wire transfer in immediately available funds[; PROVIDED, HOWEVER, that the holder of this Warrant Certificate may, in lieu of payment of the Exercise Price, surrender its Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the surrendered Warrants, multiplied by the difference between the Fair Market Value (defined below) and the Exercise Price by (y) the Fair Market Value. The “FAIR MARKET VALUE” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the 3rd trading day prior to the date on which the Election to Purchase is sent to the Warrant Agent](1). If any of (a) this Warrant Certificate, (b) the Election to Purchase, or (c) the Exercise Price therefor [or surrendered Warrants](2), is received by the Warrant Agent after 5:00 P.M., New York City time, the Warrants will be deemed to be received and exercised on the Business Day next succeeding the date such items are received and such date shall be the Exercise Date for purposes hereof. If the date such items are received is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day which is a Business Day and such date shall be the Exercise Date. If the Warrants to be exercised are received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the holder as soon as practicable. In no event will interest accrue on funds deposited with the Warrant Agent in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the Warrant Agent in its sole discretion and such determination will be final and binding upon the holder of the Warrants and the Company. Neither the Warrant Agent nor the Company shall have any obligation to inform a holder of Warrants of the invalidity of any exercise of Warrants.
As used herein, the term “BUSINESS DAY” means any day that is not a Saturday or Sunday and is not a United States federal holiday or a day on which banking institutions generally are authorized or obligated by law or regulation to close in New York City.
As used herein, the term “BUSINESS COMBINATION” shall have the meaning set forth in the Warrant Agreement.
(1) To be included only in Warrant Certificates representing Warrants issued in the private placement.
(2) To be included only in Warrant Certificates representing Warrants issued in the private placement.
2
Warrants may be exercised only in whole numbers of Warrants. No fractional shares of Common Stock are to be issued upon the exercise of any Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. If fewer than all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining unexercised shall be delivered to the holder of this Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise specified by such Registered Holder.
Notwithstanding the foregoing, the Company shall not be obligated to deliver any Shares pursuant to the exercise of a Warrant and shall have no obligation to settle a Warrant exercise unless a registration statement under the Securities Act of 1933, as amended (the “SECURITIES ACT”), with respect to the Shares is effective and a current prospectus is on file with the Commission. In the event that a registration statement with respect to the Shares underlying a Warrant is not effective under the Securities Act or a current prospectus is not on file with the Commission, the holder of such Warrant shall not be entitled to exercise such Warrant. Notwithstanding anything to the contrary in the Warrant Agreement (as defined below) and this Warrant Certificate, under no circumstances will the Company be required to net cash settle a Warrant exercise. Warrants may not be exercised by, or Shares issued to, any registered holder in any state in which such exercise or issuance would be unlawful. For the avoidance of doubt, as a result of Section 3.3.3 of the Warrant Agreement and the foregoing, any or all of the Warrants may expire unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of [ ], 2007 (the “WARRANT AGREEMENT”), between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this Warrant Certificate consent by acceptance hereof. Copies of the Warrant Agreement are on file and can be inspected at the above-mentioned office of the Warrant Agent and at the office of the Company at Four Stamford Plaza, 107 Elm Street, Stamford, CT 06902.
At any time during the Exercise Period, the Company may, at its option, redeem all (but not part) of the then outstanding Warrants upon giving notice in accordance with the terms of the Warrant Agreement (the “REDEMPTION NOTICE”), at the price of $0.01 per Warrant (the “REDEMPTION PRICE”); PROVIDED, that the last sales price of the Shares has been at least $11.50 per Share (subject to adjustment as provided in the Warrant Agreement), on any twenty (20) trading days within a thirty (30) trading day period ending on the third Business Day prior to the date on which the Redemption Notice is given. In the event the Company shall elect to redeem all of the then outstanding Warrants, the Company shall fix a date for such redemption (the “REDEMPTION DATE”). The Warrants may be exercised in accordance with the terms of this Agreement at any time after a Redemption Notice shall have been given by the Company; PROVIDED, HOWEVER, that no Warrants may be exercised subsequent to the expiration of the Exercise Period; PROVIDED, FURTHER, that all rights whatsoever with respect to the Warrants shall cease on the Redemption Date, other than to the right to receive the Redemption Price.
3
The accrual of dividends, if any, on the Shares issued upon the valid exercise of any Warrant will be governed by the terms generally applicable to such Shares. From and after the issuance of such Shares, the former holder of the Warrants exercised will be entitled to the benefits generally available to other holders of Shares and such former holder’s right to receive payments of dividends and any other amounts payable in respect of the Shares shall be governed by, and shall be subject to, the terms and provisions generally applicable to such Shares.
The Exercise Price and the number of Shares purchasable upon the exercise of each Warrant shall be subject to adjustment as provided pursuant to Section 4 of the Warrant Agreement.
Prior to the Detachment Date, the Warrants represented by this Warrant Certificate may be exchanged or transferred only together with the Shares to which such Warrant is attached (together, a “UNIT”), and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Unit. Additionally, prior to the Detachment Date, each transfer of such Unit on the register of the Units shall operate also to transfer the Warrants included in such Units. From and after the Detachment Date, the above provisions shall be of no further force and effect. Upon due presentment for registration of transfer or exchange of this Warrant Certificate at the stock transfer division of the Warrant Agent, the Company shall execute, and the Warrant Agent shall countersign and deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants, subject to the limitations provided in the Warrant Agreement.
Neither this Warrant Certificate nor the Warrants evidenced hereby shall entitle the holder hereof or thereof to any of the rights of a holder of the Shares, including, without limitation, the right to receive dividends, if any, or payments upon the liquidation, dissolution or winding up of the Company or to exercise voting rights, if any.
The Warrant Agreement and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described therein, without the consent of the holder of this Warrant Certificate or the Warrants evidenced hereby.
THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
This Warrant Certificate shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced hereby may be exercised, unless this Warrant Certificate has been countersigned by the manual or facsimile signature of the Warrant Agent.
4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
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Dated as of |
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Information Services Group, Inc. |
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5
[REVERSE]
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereby, the holder or Participant must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant Agent at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City of New York cash, a certified or official bank check or a wire transfer in immediately available funds, in each case payable to the Warrant Agent at Account No. , in an amount equal to the Exercise Price in full for the Warrants exercised[; PROVIDED, HOWEVER, that the holder of this Warrant Certificate may, in lieu of payment of the Exercise Price for the Warrants, surrender its Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the surrendered Warrants, multiplied by the difference between the Fair Market Value and the Exercise Price by (y) the Fair Market Value](3). In addition, the Warrant holder or Participant must provide the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below. The Warrant Certificate and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York time, on the specified Exercise Date.
ELECTION
TO PURCHASE
TO BE EXECUTED IF WARRANT HOLDER DESIRES
TO EXERCISE THE WARRANTS EVIDENCED HEREBY
The undersigned hereby irrevocably elects to exercise, on , (the “EXERCISE DATE”), Warrants, evidenced by this Warrant Certificate, to purchase, of the shares of Common Stock (each a “SHARE”) of Information Services Group, Inc., a Delaware corporation (the “COMPANY”), and represents that, on or before the Exercise Date, such holder has tendered payment for such Shares by cash, certified or official bank check or bank wire transfer in immediately available funds to the order of the Company c/o Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004, in the amount of $ in accordance with the terms hereof [or, at the election of the holder, the holder (in lieu of payment of the Exercise Price for the Warrants) has surrendered Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the surrendered Warrants, multiplied by the difference between the Fair Market Value and the Exercise Price by (y) the Fair Market Value in accordance with the terms hereof](4). The undersigned requests that said number of Shares be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth below.
(3) To be included only in Warrant Certificates representing Warrants issued in the private placement.
(4) To be included only in Warrant Certificates representing Warrants issued in the private placement.
If said number of Shares is less than all of the Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing the remaining balance of the Warrants evidenced hereby be issued and delivered to the holder of the Warrant Certificate unless otherwise specified in the instructions below.
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This Warrant may only be exercised by presentation to the Warrant Agent at one of the following locations:
By hand at:
By mail at:
The method of delivery of this Warrant Certificate is at the option and risk of the exercising holder and the delivery of this Warrant Certificate will be deemed to be made only when actually received by the Warrant Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to assure timely delivery.
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SIGNATURE MUST CONFORM IN ALL RESPECTS TO THE NAME OF THE HOLDER AS SPECIFIED ON THE FACE OF THIS WARRANT CERTIFICATE. IF SHARES, OR A WARRANT CERTIFICATE EVIDENCING UNEXERCISED WARRANTS, ARE TO BE ISSUED IN A NAME OTHER THAN THAT OF THE REGISTERED HOLDER HEREOF OR ARE TO BE DELIVERED TO AN ADDRESS OTHER THAN THE ADDRESS OF SUCH HOLDER AS SHOWN ON THE BOOKS OF THE WARRANT AGENT, THE ABOVE SIGNATURE MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (AS THAT TERM IS DEFINED IN RULE 17AD-15 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED). |
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ASSIGNMENT
(FORM
OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER
DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED, HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S) UNTO
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the rights represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint Attorney to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises.
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(SIGNATURE MUST CONFORM IN ALL RESPECTS TO THE NAME OF THE HOLDER AS SPECIFIED ON THE FACE OF THIS WARRANT CERTIFICATE AND MUST BEAR A SIGNATURE GUARANTEE BY AN ELIGIBLE GUARANTOR INSTITUTION (AS THAT TERM IS DEFINED IN RULE 17AD-15 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED). |
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EXHIBIT 4.4
FORM OF WARRANT AGREEMENT
This Warrant Agreement is made as of , 2007 between Information Services Group, Inc., a Delaware corporation, with offices at Four Stamford Plaza, 107 Elm Street, Stamford, CT 06902 (the “ Company ”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, New York 10004 (“ Warrant Agent ”).
WHEREAS, the Company has determined to issue and deliver to Oenoke Partners, LLC (“ Oenoke ”) in a private placement 6,000,000 Warrants (the “ Private Warrants ”), each of such Private Warrants evidencing the right of the holder thereof to purchase one share of Common Stock for $6.00, subject to adjustment as provided herein;
WHEREAS, the Company is engaged in a public offering (“ Public Offering ”) of Units (the “ Units ”) and, in connection therewith, has determined to issue and deliver to Deutsche Bank Securities Inc. (“ Deutsche ”), Lazard Capital Markets (“ Lazard ”), and Morgan Joseph & Co., Inc. (“ Morgan Joseph ” and, together with Deutsche and Lazard, the “ Underwriters ”) (i) 18,750,000 Units (the “ Public Units ”), each Public consisting of one share of the Company’s Common Stock, par value $.001 per share, and one warrant (all such warrants collectively, the “ Public Warrants ”), (ii) an option to purchase up to 2,812,500 additional units (the “ Over Allotment Units ”), each Over Allotment Unit consisting of one share of the Company’s Common Stock, par value $.001 per share, and one warrant (all such warrants collectively, the “ Underwriters’ Warrants ”); and (iii) an option to purchase 937,500 Units (all such Units collectively, the “ UPO Units ”) each UPO Unit consisting of one share of the Company’s Common Stock, par value $.001 per share, and one warrant (the “ UPO Warrants ” and, together with the Public Warrants, the Private Warrants and the Underwriter’s Warrants, the “ Warrants ”), each of such Warrants evidencing the right of the holder thereof to purchase one share of Common Stock, for $6.00 (or $7.50, in the case of the UPO Warrants), subject to adjustment as described herein; and
WHEREAS, the Company has filed with the Securities and Exchange Commission (“ Commission ”) a Registration Statement, No. 333-136536 on Form S-1 (“ Registration Statement ”) for the registration, under the Securities Act of 1933, as amended (“ Act ”) of, among other securities, the Public Units, the Over Allotment Units and the UPO Units, and the Common Stock issuable upon exercise of the Public Warrants, the Underwriters’ Warrants and the UPO Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF WARRANT AGENT . The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Warrant Agreement.
2. WARRANTS .
2.1 FORM OF WARRANT . Each Warrant shall be issued in registered form only; except as set forth herein, shall be in substantially the form of Exhibit A attached hereto, the provisions of which are incorporated herein; and shall be signed by, or bear the facsimile signature of, the Chairman and Chief Executive Officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. All of the Warrants shall initially be represented by one or more book-entry certificates (each, a “ Book Entry Warrant Certificate ”).
2.2 EFFECT OF COUNTERSIGNATURE . Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3 REGISTRATION .
2.3.1 WARRANT REGISTER . The Warrant Agent shall maintain books (“ Warrant Register ”), for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, or, in the case of the Private Warrants, the delivery of definitive warrant certificates in physical form to the Warrant Agent, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.
2.3.2 BENEFICIAL OWNER; REGISTERED HOLDER . Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“ Registered Holder ”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
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2.4 DETACHABILITY OF WARRANTS . The securities comprising the Units will not be separately transferable until five business days following the earlier to occur of (i) expiration or termination of the Underwriters’ over allotment option or (ii) its exercise in full (the “ Detachment Date ”), but in no event will separate trading of the securities comprising the Units be allowed until the Company (a) files a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering including the proceeds received by the Company from the exercise of the Underwriters’ over allotment option, if the over allotment option is exercised prior to the filing of the Form 8-K, and (b) issues a press release announcing when such separate trading will begin.
2.5 PRIVATE WARRANTS, PUBLIC WARRANTS, UPO WARRANTS AND UNDERWRITERS’ WARRANTS . The UPO Warrants shall have the same terms and be in the same form as the Public Warrants except with respect to the Warrant Price as set forth below in Section 3.1. The Private Warrants shall have the same terms and be in the same form as the Public Warrants, except that the Private Warrants may be exercised on a cashless basis, and except with respect to the restrictions on transferability set forth in Section 3.2 hereof and such Warrants are not subject to redemption as is provided for in Section 6.4 . The Underwriters’ Warrants shall have the same terms and be in the same form as the Public Warrants.
3. TERMS AND EXERCISE OF WARRANTS .
3.1 WARRANT PRICE . Each Public Warrant, Private Warrant and Underwriters’ Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Public Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at an exercise price of $6.00 per whole share, subject to the adjustments provided in Section 4. Each UPO Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such UPO Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at an exercise price of $7.50 per whole share, subject to the adjustments provided in Section 4 hereof. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date; provided, however, that any change in the Warrant Price must apply equally to all of the Warrants, and provided further that any reduction in Warrant Price must remain in effect for at least (20) business days.
3.2 DURATION OF WARRANTS . Except as set forth in this Section 3.2, a Warrant may be exercised only during the period (“ Exercise Period ”) commencing on the later of (i) the consummation by the Company of a merger, capital stock exchange, asset or stock acquisition or other similar business combination (“ Business Combination ”) (as described more fully in the Registration Statement) and (ii) , 2008 [One year from the effective date of the Registration Statement], and terminating at 5:00 p.m., New York city time on the earlier to occur of (i) , 2011 [Four years from the effective date of the Registration Statement] or (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Warrant Agreement (“ Expiration Date ”). Notwithstanding the foregoing, (1) the Private Warrants may not be sold or otherwise transferred until that date which is one year following the date upon which the Company consummates a Business Combination, and (2) will not be subject
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to redemption. Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereunder but excluding the Private Warrants), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however , that any extension of the duration of the Warrants must apply equally to all of the Warrants, except that any amendment to the terms of the Underwriter’s Warrants shall be subject to any limitations and conditions that may be imposed by NASD Corporate Financing Rule 2710. Should the Company wish to extend the Expiration Date of the Warrants, the Company shall provide advance notice to the American Stock Exchange as required by the American Stock Exchange.
3.3 EXERCISE OF WARRANTS
3.3.1 Payment . Subject to the provisions of the Warrant, this Warrant Agreement a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full, in lawful money of the United States, in cash, good certified check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company), the Warrant Price for each whole share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Common Stock, and the issuance of the Common Stock.
3.3.2 Issuance of Certificates . As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless a registration statement under the Act with respect to the Common Stock is effective.
3.3.3 Limitations . Notwithstanding the foregoing, and except with respect to the Private Warrants, the Company shall not be obligated to deliver any Shares pursuant to the exercise of a Warrant and shall have no obligation to settle the Warrant exercise unless a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the Shares is effective and a current Prospectus is on file with the Commission. Except with respect to the Private Warrants, in the event that a registration statement with respect to the Shares underlying a Warrant is not effective under the Securities Act or a current Prospectus is not on file with the Commission, the holder of such Warrant shall not be entitled to exercise such Warrant. Notwithstanding anything to the contrary in this Warrant Agreement, under no circumstances will the Company be required to net cash settle the Warrant exercise. Warrants may not be exercised by, or Shares issued to, any registered holder in any state in which such exercise or issuance would be unlawful. For the avoidance of doubt, as a result of
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this Section 3.3.3, any or all of the Warrants may expire unexercised. In no event shall the registered Holder of a Warrant be entitled to receive any monetary damages if the Common Stock underlying the Warrants have not been registered by the Company pursuant to an effective registration statement or if a current prospectus is available for delivery by the Warrant Agent, provided the Company has fulfilled its obligation to use its reasonable best efforts to effect such registration and ensure a current prospectus is available for delivery by the Warrant Agent.
3.4 VALID ISSUANCE . All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be validly issued, fully paid and nonassessable.
3.5 DATE OF ISSUANCE . Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.
4. ADJUSTMENTS .
4.1.1 Stock Dividends — Split-Ups . If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock.
4.1.2 Extraordinary Dividend . If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend in cash or securities to the holders of the Common Stock (or shares of the Company’s capital stock into which the Warrants are convertible), then upon the exercise of the Warrants, the registered holder shall be entitled to a proportionate share of any such dividend as if the shares of Common Stock purchased upon exercise hereof by such registered holder had been purchased and outstanding on the record date fixed for the determination of the holders of the Common Stock entitled to receive such dividend.
4.2 AGGREGATION OF SHARES . If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 ADJUSTMENTS IN EXERCISE PRICE . Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1
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and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC . In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
4.5 NOTICES OF CHANGES IN WARRANT . Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to the Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.6 NO FRACTIONAL SHARES . Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.
4.7 FORM OF WARRANT . The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the
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same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Warrant Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
5. TRANSFER AND EXCHANGE OF WARRANTS .
5.1 TRANSFER OF WARRANTS . Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, each transfer of a Public Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. From and after the Detachment Date this Section 5.1 will have no further force and effect.
5.2 REGISTRATION OF TRANSFER . The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.3 PROCEDURE FOR SURRENDER OF WARRANTS . Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another nominee of the depository, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefore until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.4 FRACTIONAL WARRANTS . The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.
5.5 SERVICE CHARGES . No service charge shall be made for any exchange or registration of transfer of Warrants.
5.6 WARRANT EXECUTION AND COUNTERSIGNATURE . The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and
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the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. REDEMPTION .
6.1 REDEMPTION . Subject to Sections 6.4 and 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time after they become exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred to in Section 6.2. hereof at a redemption price of $.01 per Warrant (the “ Redemption Price ”), provided that the last sales price of the Common Stock has been at least $11.50 per share, on any twenty (20) trading days within a thirty (30) trading day period ending on the third business day prior to the date on which notice of redemption is given.
6.2 DATE FIXED FOR, AND NOTICE OF, REDEMPTION . In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.
6.3 EXERCISE AFTER NOTICE OF REDEMPTION . The Warrants may be exercised in accordance with Section 3 of this Warrant Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the time and date fixed for redemption. On and after the redemption date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
6.4 OUTSTANDING WARRANTS ONLY; REGISTRATION OR QUALIFICATION OF COMMON STOCK . The Company understands that the redemption rights provided for by this Section 6 apply only to outstanding Warrants. To the extent a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by redemption. However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such exercise provided that the criteria for redemption is met. In the event that the common stock issuable upon exercise of the Warrants has not been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants, the Company will not have the right to redeem the Warrants.
6.5 EXCLUSION OF PRIVATE WARRANTS . Notwithstanding anything in this Warrant Agreement to the contrary, the Private Warrants shall not be subject to redemption.
7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS .
7.1 NO RIGHTS AS STOCKHOLDER. A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
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7.2 LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS . If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 RESERVATION OF COMMON STOCK . The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
7.4 REGISTRATION OF COMMON STOCK . The Company agrees that prior to the commencement of the Exercise Period, it shall file with the Securities and Exchange Commission a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Act, of, and it shall use its reasonable best efforts to take such action as is necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants. In either case, the Company will use its reasonable best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the expiration or redemption of the Warrants in accordance with the provisions of this Warrant Agreement; provided, however, that the Company shall not be obligated to deliver Shares, and shall not have penalties nor be liable to the Warrant holder for failure to deliver Shares pursuant to Section 3, if a registration statement is not effective or a current Prospectus is not on file with the Commission at the time of exercise of the Warrant by the holder. For the avoidance of doubt, the Company may be liable to a Warrant holder for failure to fulfill its obligations to use reasonable best efforts pursuant to this Section 7.4.
8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS .
8.1 PAYMENT OF TAXES . The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
8.2 RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT .
8.2.1 APPOINTMENT OF SUCCESSOR WARRANT AGENT . The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the
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Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2 NOTICE OF SUCCESSOR WARRANT AGENT . In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 MERGER OR CONSOLIDATION OF WARRANT AGENT . Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Warrant Agreement without any further act.
8.3 FEES AND EXPENSES OF WARRANT AGENT .
8.3.1 REMUNERATION . The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 FURTHER ASSURANCES . The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Warrant Agreement.
8.4 LIABILITY OF WARRANT AGENT .
8.4.1 RELIANCE ON COMPANY STATEMENT . Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
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established by a statement signed by the Chairman and Chief Executive Officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Warrant Agreement.
8.4.2 INDEMNITY . The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement except as a result of the Warrant Agent’s negligence, willful misconduct, or bad faith.
8.4.3 EXCLUSIONS . The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable.
8.5 ACCEPTANCE OF AGENCY . The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s Common Stock through the exercise of Warrants.
8.6 Waiver . The Warrant Agent hereby waives any and all right, title, interest or claim of any kind (“ Claim ”) in or to any distribution of the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the Company and the Warrant Agent as trustee thereunder), and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
9. MISCELLANEOUS PROVISIONS .
9.1 SUCCESSORS . All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2 NOTICES . Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage
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prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Information Services
Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Michael P. Connors
with a copy to:
Information Services
Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Earl H. Doppelt
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock
Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Compliance Department
with a copy in each case to:
Deutsche Bank Securities,
Inc.
60 Wall Street, 4th Floor
New York, New York 10005
Attn: [ ]
And
Morgan Joseph & Co., Inc.
[ ]
[ ]
Attn: [ ]
And
Lazard Capital Markets
[ ]
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[ ]
Attn: [ ]
And
Rothstein Kass & Company, P.C.
4 Becker Farm Road
Roseland, NJ 07068
Attn: Jeff Sommers
9.3 APPLICABLE LAW . The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to the conflicts of law principle thereof. The Company and the Warrant Agent each hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company and the Warrant Agent each hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company or the Warrant Agent 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 Section 9.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company or the Warrant Agent in any action, proceeding or claim.
9.4 AMENDMENT . This Agreement and the warrant certificate issued hereunder may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent of each of (i) Deutsche, as representative of the Underwriters and (ii) the registered holders of a majority of the then outstanding Warrants and no modification or amendment shall affect the Public Warrants and the Private Warrants differently from one another. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period in accordance with Sections 3.1 and 3.2 hereof, without such consent.
9.5 PERSONS HAVING RIGHTS UNDER THIS AGREEMENT . Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants.
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9.6 EXAMINATION OF THE WARRANT AGREEMENT . A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.
9.7 COUNTERPARTS . This Warrant Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.8 EFFECT OF HEADINGS . The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
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IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.
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CONTINENTAL STOCK
TRANSFER & TRUST
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EXHIBIT 4.5
THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) DEUTSCHE BANK SECURITIES INC. (“DEUTSCHE BANK”) OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED BELOW), OR (II) A BONA FIDE OFFICER OR PARTNER OF DEUTSCHE BANK OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER. THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) THE CONSUMMATION BY INFORMATION SERVICES GROUP, INC. (“COMPANY”) OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET OR STOCK ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION (“BUSINESS COMBINATION”) (AS DESCRIBED MORE FULLY IN THE COMPANY’S REGISTRATION STATEMENT (DEFINED HEREIN)) AND (II) , 2008. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, , 2011.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
937,500 UNITS
OF
INFORMATION SERVICES GROUP, INC.
1. PURCHASE OPTION.
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on behalf of (“HOLDER”), as registered owner of this Purchase Option (“PURCHASE OPTION”), to Information Services Group, Inc. (“COMPANY”), Holder is entitled, at any time or from time to time upon the later of the consummation of a Business Combination or , 2008 (“COMMENCEMENT DATE”), and at or before 5:00 p.m., New York City local time, , 2011 (“EXPIRATION DATE”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 937,500 units (“UNITS”) of the Company, each Unit consisting of one share of common stock of the Company, par value $0.001 per share (“COMMON STOCK”), and one warrant (“WARRANT”) expiring four years from the effective date (“EFFECTIVE DATE”) of the registration statement (“REGISTRATION STATEMENT”) pursuant to which Units are offered for sale to the public (“OFFERING”). Each Warrant is the same as the warrants included in the Units being registered for sale to the public by way of the Registration Statement (“PUBLIC WARRANTS”), except that the exercise price of the Warrant is $7.50 per share (such exercise price, as it may be adjusted hereunder, the “Underwriter’s Warrant Price”). If the Expiration Date is a day on which banking institutions are authorized by law to close in New York City, then this Purchase Option may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate the Purchase Option. This Purchase Option is initially exercisable at $9.60 per Unit so purchased; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Option, including the exercise price per Unit and the number of Units (and shares of Common Stock and Warrants) to be received upon such exercise, shall be adjusted as therein specified. The term “EXERCISE PRICE” shall mean the initial exercise price per Unit or the adjusted exercise price per Unit, depending on the context.
2. EXERCISE.
2.1. EXERCISE FORM. In order to exercise this Purchase Option, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Option and payment of the Exercise Price for the Units being purchased payable in cash or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., New York City local time, on the Expiration Date, this Purchase Option shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.
2.2. CASHLESS EXERCISE.
2.2.1. DETERMINATION OF AMOUNT. In lieu of the payment of the Exercise Price multiplied by the number of Units for which this Purchase Option is exercisable (and in lieu of being entitled to receive Common Stock and Warrants) in the manner required by Section 2.1, the Holder shall have the right (but not the obligation) to convert any exercisable but unexercised portion of this Purchase Option into Units (“CONVERSION RIGHT”) as follows: upon exercise of the Conversion Right, the Company shall deliver to the Holder (without payment by the Holder of any of the Exercise Price in cash) that number of Units (or that number of shares of Common Stock and Warrants comprising that number of Units) equal to the quotient obtained by dividing (x) the Value (as defined below) of the portion of the Purchase Option being converted by (y) the Current Market Value (as defined below) of a Unit. The “VALUE” of the portion of the Purchase Option being converted shall equal the remainder derived from subtracting (a) (i) the Exercise Price multiplied by (ii) the number of Units underlying the portion of this Purchase Option being converted from (b) the Current Market Value of a Unit multiplied by the number of Units underlying the portion of the Purchase Option being converted. As used herein, the term “CURRENT MARKET VALUE” per Unit at any date means: (A) in the event that neither the Units nor Public Warrants are still trading, the remainder derived from subtracting (x) the exercise price of the Warrants multiplied by the number of shares of Common Stock issuable upon exercise of the Warrants underlying one Unit from (y) (i) the Current Market Price of the Common Stock multiplied by (ii) the number of shares of Common Stock underlying one Unit, which shall include the shares of Common Stock underlying the Warrants included in such Unit; (B) in the event that the Units, Common Stock and Public Warrants are still trading, (i) if the Units are listed on a national securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or NASD OTC Bulletin Board (or successor exchange), the last sale price of the Units in the principal trading market for the Units as reported by the exchange, Nasdaq or the NASD, as the case may be, on the last trading day preceding the date in question; or (ii) if the Units are not listed on a national securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or the NASD OTC Bulletin Board (or successor exchange), but is traded in the residual over-the-counter market, the closing bid price for Units on the last trading day preceding the date in question for which such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (C) in the event that the Units are not still trading but the Common Stock and Public Warrants underlying the Units are still trading, the Current Market Price of the Common Stock plus the product of (x) the Current Market Price of the Public Warrants and (y) the number of shares of Common Stock underlying the Warrants included in one Unit. The “CURRENT MARKET PRICE” shall mean (i) if the Common Stock (or Public Warrants, as the case may be) is listed on a national securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or NASD OTC Bulletin Board (or successor exchange), the last sale price of the Common Stock (or Public Warrants) in the principal trading market for the Common Stock as reported by the exchange, Nasdaq or the NASD, as the case may be, on the last trading day preceding the date in question; (ii) if the Common Stock (or Public Warrants, as the case may be) is not listed on a national securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or the NASD OTC Bulletin Board (or successor exchange), but is traded in the residual over-the-counter market, the closing bid price for the Common Stock (or
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Public Warrants) on the last trading day preceding the date in question for which such quotations are reported by the Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors of the Company shall determine, in good faith. In the event the Public Warrants have expired and are no longer exercisable, no “VALUE” shall be attributed to the Warrants underlying this Purchase Option. Additionally, in the event that this Purchase Option is exercised pursuant to this Section 2.2 and the Public Warrants are still trading, the “VALUE” shall be reduced by the difference between the Warrant Exercise Price and the exercise price of the Public Warrants multiplied by the number of Warrants underlying the Units included in the portion of this Purchase Option being converted.
2.2.2. MECHANICS OF CASHLESS EXERCISE. The cashless exercise right described in this Section 2.2 (the “CASHLESS EXERCISE RIGHT”) may be exercised by the Holder on any business day on or after the Commencement Date and not later than the Expiration Date by delivering the Purchase Option with the duly executed exercise form attached hereto with the cashless exercise section completed to the Company, exercising the Cashless Exercise Right and specifying the total number of Units the Holder will purchase pursuant to such Cashless Exercise Right.
2.3. LIMITATIONS. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Purchase Option and shall have no obligation to settle the Purchase Option exercise unless a registration statement under the Securities Act of 1933, as amended (the “SECURITIES ACT”), with respect to the securities underlying the Purchase Option is effective and a current prospectus is on file with the Securities and Exchange Commission (the “COMMISSION”). In the event that a registration statement with respect to the securities underlying a Purchase Option is not effective under the Securities Act or a current prospectus is not on file with the Commission, the holder of such Purchase Option shall not be entitled to exercise such Purchase Option. Notwithstanding anything to the contrary in this Purchase Option, under no circumstances will the Company be required to net cash settle the Purchase Option exercise. Purchase Options may not be exercised by, or securities underlying such Purchase Option issued to, any registered holder in any state in which such exercise or issuance would be unlawful. For the avoidance of doubt, as a result of this Section 2.3, any or all of the Purchase Option may expire unexercised. In no event shall the registered Holder of this Purchase Option be entitled to receive any monetary damages if the securities underlying this Purchase Option have not been registered by the Company pursuant to an effective registration statement or if a current prospectus is not on file with the Commission, provided the Company has fulfilled its obligation to use its best efforts to effect such registration and ensure a current prospectus is on file with the Commission.
3. TRANSFER.
3.1. GENERAL RESTRICTIONS. The registered Holder of this Purchase Option, by its acceptance hereof, agrees that it will not sell, transfer, assign, pledge or hypothecate, or enter into any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of, this Purchase Option for a period of 180 days following the Effective Date to anyone other than (i) Deutsche Bank or an underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of Deutsche Bank or of any such underwriter or selected dealer. On and after the 181st day after the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Option and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five business days transfer this Purchase Option on the books of the Company and shall execute and deliver a new Purchase Option or Purchase Options of like tenor to the appropriate
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assignee(s) expressly evidencing the right to purchase the aggregate number of Units purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.
3.2. RESTRICTIONS IMPOSED BY THE SECURITIES ACT. The securities evidenced by this Purchase Option shall not be transferred unless and until (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Kramer Levin Naftalis & Frankel LLP shall be deemed satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to such securities has been filed by the Company and declared effective by the Commission and compliance with applicable state securities law has been established.
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1. PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section 3 hereof, this Purchase Option may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Option for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax, the Company shall cause to be delivered to the Holder without charge a new Purchase Option of like tenor to this Purchase Option in the name of the Holder evidencing the right of the Holder to purchase the number of Units purchasable hereunder as to which this Purchase Option has not been exercised or assigned.
4.2. LOST CERTIFICATE. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Option and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Option of like tenor and date. Any such new Purchase Option executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
5. REGISTRATION RIGHTS.
5.1. DEMAND REGISTRATION.
5.1.1. GRANT OF RIGHT. The Company, upon written demand (“INITIAL DEMAND NOTICE”) of the Holder(s) of at least 50.1% of the Purchase Options and/or the underlying Units and/or the underlying securities (“MAJORITY HOLDERS”), agrees to use its reasonable best efforts to register (the “DEMAND REGISTRATION”) under the Securities Act on one occasion, all of the Purchase Options requested by the Majority Holders in the Initial Demand Notice and all of the securities underlying such Purchase Options, including the Units, Common Stock, the Warrants and the Common Stock underlying the Warrants (collectively, the “REGISTRABLE SECURITIES”). On such occasion, the Company will file a registration statement for use in an offering of the Registrable Securities from time-to-time or a post-effective amendment to the Registration Statement covering all of the Registrable Securities that will permit an offering of the Registrable Securities from time-to-time within sixty days after receipt of the Initial Demand Notice and use its best efforts to have such registration statement or post-effective amendment declared effective as soon as possible thereafter. The demand for registration may be made at any time during a period of four years beginning on the Effective Date. The Initial Demand Notice shall specify the intended method(s) of distribution of the Registrable Securities. The Company will notify all holders of the Purchase Options and/or
4
Registrable Securities of the demand within ten days from the date of the receipt of any such Initial Demand Notice. Each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “DEMANDING HOLDER”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 5.1.4.
5.1.2. EFFECTIVE REGISTRATION. A registration will not count as a Demand Registration until the registration statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such registration statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the registration statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering.
5.1.3. UNDERWRITTEN OFFERING. If the Majority Holders so elect and such holders so advise the Company as part of the Initial Demand Notice, the offering of all or any portion of the Registrable Securities pursuant to such Demand Registration shall be in the form of one underwritten offering. All Demanding Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Majority Holders.
5.1.4. REDUCTION OF OFFERING. If the managing underwriter or underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell pursuant to the underwritten offering, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “MAXIMUM NUMBER OF SHARES”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders that want to participate in such underwritten offering (pro rata in accordance with the number of shares that each such Person has requested be included in such registration, regardless of the number of shares held by each such Person (such proportion is referred to herein as “PRO RATA”)) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities registrable pursuant to the terms of the Registration Rights Agreement between the Company and the initial investors in the Company, dated as of , 2007 (the “REGISTRATION RIGHTS AGREEMENT” and such registrable securities, the “INVESTOR SECURITIES”) as to which “piggy-back” registration has been
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requested by the holders thereof, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i), (ii), and (iii), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares.
5.1.5. WITHDRAWAL. If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the underwriter or underwriters of their request to withdraw prior to the effectiveness of the registration statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 5.1, provided that the majority-in-interest of the Demanding Holders electing to so withdraw from the offering pays all costs and expenses incurred by the Company in connection with such withdrawn Demand Registration.
5.1.6. TERMS. The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders shall pay any and all underwriting commissions. The Company agrees to use its reasonable best efforts to qualify or register the Registrable Securities in such states as are reasonably requested by the Majority Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a state in which such registration would cause (i) the Company to be obligated to qualify to do business in such state, or would subject the Company to taxation as a foreign corporation doing business in such jurisdiction or (ii) the principal stockholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall use its reasonable best efforts to cause any registration statement or post-effective amendment filed pursuant to the demand rights granted under Section 5.1.1 to remain effective until the expiration of the Warrants in accordance with the terms and conditions of that certain Warrant Agreement, dated as of , 2007, between the Company and Continental Stock Transfer & Trust Company.
5.1.7. PERMITTED DELAYS. The Company shall be entitled to postpone, for up to 60 days, the filing of any registration statement under this Section 5.1, if (a) at any time prior to the filing of such registration statement the Company’s Board of Directors determines, in its good faith business judgment, that such registration and offering would materially and adversely affect any financing, acquisition, corporate reorganization, or other material transaction involving the Company, and (b) the Company delivers to the Demanding Holders written notice thereof within five (5) business days of the date of receipt of a request for Demand Registration.
5.2. PIGGY-BACK REGISTRATION.
5.2.1. PIGGY-BACK RIGHTS. If at any time during the seven year period commencing on the Effective Date the Company proposes to file a registration statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for stockholders of the Company for their account (or by the Company and by stockholders of the Company including, without limitation, pursuant to Section 5.1), other than a
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registration statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within five days following receipt of such notice (a “PIGGY-BACK REGISTRATION”). The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an underwriter or underwriters shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such Piggy-Back Registration.
5.2.2. REDUCTION OF OFFERING. If the managing underwriter or underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of shares of Common Stock which the Company desires to sell, taken together with shares of Common Stock, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 5.2, and the shares of Common Stock, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:
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5.2.3. WITHDRAWAL. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the registration statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a registration statement at any time prior to the effectiveness of the registration statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 5.2.4.
5.2.4. TERMS. The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities but the Holders shall pay any and all underwriting commissions related to the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than fifteen days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each applicable registration statement filed (during the period in which the Purchase Option is exercisable) by the Company until such time as all of the Registrable Securities have been registered and sold. The Holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice, within ten days of the receipt of the Company’s notice of its intention to file a registration statement. The Company shall use its reasonable best efforts to cause any
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registration statement filed pursuant to the above “piggy-back” rights to remain effective for at least nine months from the date that the Holders of the Registrable Securities are first given the opportunity to sell all of such securities.
5.2.5. PERMITTED DELAYS. The Company shall be entitled to postpone, for up to 60 days, the filing of any registration statement under this Section 5.2, if (a) at any time prior to the filing of such registration statement the Company’s Board of Directors determines, in its good faith business judgment, that such registration and offering would materially and adversely affect any financing, acquisition, corporate reorganization, or other material transaction involving the Company, and (b) the Company delivers to the Holders of the Registrable Securities exercising their “piggy-back” rights written notice thereof within five (5) business days of the date of receipt by the Company of such requests for Piggy-Back Registration.
5.3. GENERAL TERMS.
5.3.1. INDEMNIFICATION. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (“EXCHANGE ACT”), against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against litigation, commenced or threatened, or any claim whatsoever whether arising out of any action between the underwriter and the Company or between the underwriter and any third party or otherwise) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the underwriter contained in Section [8] of the Underwriting Agreement between the Company and Deutsche Bank dated the Effective Date. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, its officers and directors and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5 of the Underwriting Agreement pursuant to which the underwriter has agreed to indemnify the Company.
5.3.2. EXERCISE OF PURCHASE OPTIONS. Nothing contained in this Purchase Option shall be construed as requiring the Holder(s) to exercise their Purchase Options or Warrants underlying such Purchase Options prior to or after the initial filing of any registration statement or the effectiveness thereof.
5.3.3. DOCUMENTS DELIVERED TO HOLDERS. The Company shall furnish to the Holders participating in any of the foregoing offerings, a signed counterpart, addressed to the participating Holders, of (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under
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the underwriting agreement) signed by the independent public accountants who have issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to the Holders participating in the offering, the correspondence and memoranda described below and copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit the Holders, to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of the National Association of Securities Dealers, Inc. (“NASD”). Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times and as often as the Holders shall reasonably request. The Company shall not be required to disclose any confidential information or other records to the Holders, or to any other person, until and unless such persons shall have entered into reasonable confidentiality agreements (in form and substance reasonably satisfactory to the Company), with the Company with respect thereto.
5.4. UNDERWRITING AGREEMENT. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably acceptable to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders and their intended methods of distribution. Such Holders, however, shall agree to such covenants and indemnification and contribution obligations for selling stockholders as are customarily contained in agreements of that type used by the managing underwriter. Further, such Holders shall execute appropriate custody agreements and otherwise cooperate fully in the preparation of the registration statement and other documents relating to any offering in which they include securities pursuant to this Section 5. Each Holder shall also furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of the Registrable Securities.
5.4.1. RULE 144 SALE. Notwithstanding anything contained in this Section 5 to the contrary, the Company shall have no obligation pursuant to Sections 5.1 or 5.2 for the registration of Registrable Securities held by any Holder (i) where such Holder would then be entitled to sell under Rule 144 within any three-month period (or such other period prescribed under Rule 144 as may be provided by amendment thereof) all of the Registrable Securities then held by such Holder, and (ii) where the number of Registrable Securities held by such Holder is within the volume limitations under paragraph (e) of Rule 144 (calculated as if such Holder were an affiliate within the meaning of Rule 144).
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5.4.2. SUPPLEMENTAL PROSPECTUS. Each Holder agrees, that upon receipt of any notice from the Company of the happening of any event as a result of which the prospectus included in the registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, such Holder will immediately discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder’s receipt of the copies of a supplemental or amended prospectus, and, if so desired by the Company, such Holder shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of such destruction) all copies, other than permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
6. ADJUSTMENTS.
6.1. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise Price and the number of Units underlying the Purchase Option shall be subject to adjustment from time to time as hereinafter set forth:
6.1.1. STOCK DIVIDENDS—SPLIT-UPS. If after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other similar event, then, on the effective date thereof, the number of shares of Common Stock underlying each of the Units purchasable hereunder shall be increased in proportion to such increase in outstanding shares. In such case, the number of shares of Common Stock, and the exercise price applicable thereto, underlying the Warrants underlying each of the Units purchasable hereunder shall be adjusted in accordance with the terms of the Warrants. For example, if the Company declares a two-for-one stock dividend and at the time of such dividend this Purchase Option is for the purchase of one Unit at $9.60 per whole Unit (each Warrant underlying the Units is exercisable for $7.50 per share), upon effectiveness of the dividend, this Purchase Option will be adjusted to allow for the purchase of one Unit at $9.60 per Unit, each Unit entitling the holder to receive two shares of Common Stock and two Warrants (each Warrant exercisable for $3.75 per share).
6.1.2. EXTRAORDINARY DIVIDEND. If the Company, at any time while this Purchase Option is outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of Common Stock (or other shares of the Company’s capital stock receivable upon exercise of the Purchase Option), other than (i) as described in Sections 6.1.1, 6.1.3 or 6.1.4, (ii) regular quarterly or other periodic dividends, (iii) in connection with the conversion rights of the holders of Common Stock upon consummation of the Company’s initial Business Combination or (iv) in connection with the Company’s liquidation and the distribution of its assets upon its failure to consummate a Business Combination (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Exercise Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Company’s Board of Directors, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend.
6.1.3. AGGREGATION OF SHARES. If after the date hereof, and subject to the provisions of Section 6.3, the number of outstanding shares of Common Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock or other similar event,
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then, on the effective date thereof, the number of shares of Common Stock underlying each of the Units purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares. In such case, the number of shares of Common Stock, and the exercise price applicable thereto, underlying the Warrants underlying each of the Units purchasable hereunder shall be adjusted in accordance with the terms of the Warrants.
6.1.4. REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of any reclassification or reorganization of the outstanding shares of Common Stock other than a change covered by Section 6.1.1 or 6.1.3 hereof or that solely affects the par value of such shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Option shall have the right thereafter (until the expiration of the right of exercise of this Purchase Option) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Purchase Option and the underlying Warrants immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 6.1.1 or 6.1.3, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.3 and this Section 6.1.4. The provisions of this Section 6.1.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
6.1.5. CHANGES IN FORM OF PURCHASE OPTION. This form of Purchase Option need not be changed because of any change pursuant to this Section, and Purchase Options issued after such change may state the same Exercise Price and the same number of Units as are stated in the Purchase Options initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Options reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.
6.1.6. ADJUSTMENTS OF WARRANTS. To the extent the price of the Warrants is lowered pursuant to Section 3.1 of the Warrant Agreement, dated , 2007, between the Company and Continental Stock Transfer & Trust Company (the “WARRANT AGREEMENT”) the price of the Warrants underlying the Purchase Option shall be reduced equally (except that the Warrant Price (as defined in the Warrant Agreement) for the Warrants shall always remain equal to 125% of the Warrant Price for the Public Warrants), subject to any limitations and conditions that may be imposed by NASD Corporate Financing Rule 2710 and any such reduction must remain in effect for at least twenty (20) business days. To the extent the duration of the Warrants is extended pursuant to Section 3.2 of the Warrant Agreement, the duration of the Warrants underlying the Purchase Option shall be extended on identical terms, subject to any limitations that may be imposed by NASD Corporate Financing Rule 2710.
6.2. SUBSTITUTE PURCHASE OPTION. In case of any consolidation of the Company with, or merger of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger which does not result in any reclassification or change of the outstanding Common Stock), the corporation formed by such consolidation or merger shall execute and deliver to the
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Holder a supplemental Purchase Option providing that the holder of each Purchase Option then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Option) to receive, upon exercise of such Purchase Option, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or merger, by a holder of the number of shares of Common Stock of the Company for which such Purchase Option might have been exercised immediately prior to such consolidation, merger, sale or transfer. Such supplemental Purchase Option shall provide for adjustments which shall be identical to the adjustments provided in Section 6. The above provision of this Section shall similarly apply to successive consolidations or mergers.
6.3. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required to issue certificates representing fractions of shares of Common Stock or Warrants upon the exercise of the Purchase Option, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of Warrants, shares of Common Stock or other securities, properties or rights.
7. RESERVATION AND LISTING. The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon exercise of the Purchase Options or the Warrants underlying the Purchase Option, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Options and payment of the Exercise Price therefor, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any stockholder. The Company further covenants and agrees that upon exercise of the Warrants underlying the Purchase Options and payment of the respective Warrant exercise price therefor, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any stockholder. As long as the Purchase Options shall be outstanding, the Company shall use its best efforts to cause all (i) Units and shares of Common Stock issuable upon exercise of the Purchase Options, (ii) Warrants issuable upon exercise of the Purchase Options and (iii) shares of Common Stock issuable upon exercise of the Warrants included in the Units issuable upon exercise of the Purchase Option to be listed (subject to official notice of issuance) on all securities exchanges (or, if applicable on the Nasdaq Global Market, Capital Market, OTC Bulletin Board or any successor trading market) on which the Units, the Common Stock or the Public Warrants issued to the public in connection herewith may then be listed and/or quoted.
8. CERTAIN NOTICE REQUIREMENTS.
8.1. HOLDER’S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent as a stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company. If, however, at any time prior to the expiration of the Purchase Options and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other stockholders of the Company at the same time and in the same manner that such notice is given to the stockholders.
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8.2. EVENTS REQUIRING NOTICE. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its shares of Common Stock for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, or (ii) the Company shall offer to all the holders of its Common Stock any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business shall be proposed.
8.3. NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“PRICE NOTICE”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s President and Chief Financial Officer.
8.4. TRANSMITTAL OF NOTICES. All notices, requests, consents and other communications under this Purchase Option shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Option, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to the following address or to such other address as the Company may designate by notice to the Holders:
9. MISCELLANEOUS.
9.1. AMENDMENTS. The Company may from time to time supplement or amend this Purchase Option without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company may deem necessary or desirable and that the Company, in the exercise of reasonable judgment, determines that it shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.
9.2. 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 Purchase Option.
9.3. ENTIRE AGREEMENT. This Purchase Option (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Option) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
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9.4. BINDING EFFECT. This Purchase Option shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative 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 Purchase Option or any provisions herein contained.
9.5. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Purchase Option 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, or relating in any way to this Purchase Option shall be brought and enforced in the courts of the State of New York or the United States District Court 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 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 Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree 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.
9.6. WAIVER, ETC. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Option shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Option or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Option 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 or non-compliance.
9.7. EXECUTION IN COUNTERPARTS. This Purchase Option 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.
9.8. UNDERLYING WARRANTS. At any time after exercise by the Holder of this Purchase Option, the Holder may exchange his Warrants (with an initial exercise price of $7.50) for Public Warrants (with an initial exercise price of $6.00) upon payment to the Company of the difference between the exercise price of his Warrant and the exercise price of the Public Warrants. Any such Public Warrants and the Common Stock underlying such Public Warrants shall constitute Registrable Securities.
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IN WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by its duly authorized officer as of the day of , 2007.
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Form to be used to exercise Purchase Option:
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm St.
Stamford, CT 06902
Attn: Chief Executive Officer
Date: , 200
The undersigned hereby elects irrevocably to exercise all or a portion of the within Purchase Option and to purchase Units of Information Services Group, Inc. and hereby makes payment of $ (at the rate of $ per Unit) in payment of the Exercise Price pursuant thereto. Please issue the Common Stock and Warrants as to which this Purchase Option is exercised in accordance with the instructions given below.
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The undersigned hereby elects irrevocably to convert its right to purchase Units purchasable under the within Purchase Option by surrender of the unexercised portion of the attached Purchase Option (with a “VALUE” of $ based on a “CURRENT MARKET PRICE” of $ ). Please issue the securities comprising the Units as to which this Purchase Option is exercised in accordance with the instructions given below.
NOTICE: The signature to this exercise notice must correspond with the name as written upon the face of the Purchase Option in every particular, without alteration or any change whatever.
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
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Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Option):
FOR VALUE RECEIVED, does hereby sell, assign and transfer unto the right to purchase Units of Information Services Group, Inc. (“COMPANY”) evidenced by the within Purchase Option and does hereby authorize the Company to transfer such right on the books of the Company. Dated: , 200
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Purchase Option in every particular, without alteration or any change whatever.
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Signature(s) Guaranteed: |
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
Exhibit 10.3
INFORMATION SERVICES GROUP, INC.
MANAGEMENT UNIT PURCHASE AGREEMENT
This Management Unit Purchase Agreement (this “ Agreement ”) is made as of August 2, 2006, by and between Information Services Group, Inc., a Delaware corporation (the “ Company ”), and Oenoke Partners, LLC, a Delaware limited liability company (“ Purchaser ”).
1. Purchase and Sale of Units . Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to Purchaser, an aggregate of 4,687,500 units (the “ Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”) and a warrant to purchase a share of Stock (collectively, the “ Warrants ”) at $0.002 per Unit, for an aggregate purchase price of $9,375, payable in cash. The closing hereunder, including payment for and delivery of the Units shall occur at the offices of the Company immediately following the execution of this Agreement, or at such other time and place as the parties may mutually agree.
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[Signatures on following page]
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In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: 725 Oenoke Ridge Road |
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New Canaan, CT 06840 |
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Oenoke Partners, LLC |
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/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: 725 Oenoke Ridge Road |
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New Canaan, CT 06840 |
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EXHIBIT A
[Form of Warrant]
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(SEE REVERSE SIDE FOR LEGEND) (THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M. ON THE EXPIRATION DATE) |
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WARRANTS |
INFORMATION SERVICES GROUP, INC.
WARRANT
THIS CERTIFIES THAT, for value received, OENOKE PARTNERS, LLC (the “ Purchaser ”) is the registered holder of a Warrant or Warrants expiring on the Expiration Date (the “ Warrant ”) to purchase one fully paid and non-assessable share of Common Stock, par value $.001 per share (“ Shares ”), of Information Services Group, Inc., a Delaware corporation (the “ Company ”), for each Warrant evidenced by this Warrant Certificate. The Warrant entitles the holder thereof to purchase from the Company, commencing on the later of (i) the completion by the Company of an acquisition, through a merger, capital stock exchange, asset or stock acquisition or other business combination, of one or more domestic or international operating businesses and (ii) the date that is one year after the registration statement relating to the Public Offering is declared effective by the SEC, such number of Shares of the Company at the price of $6.00 per share, upon surrender of this Warrant Certificate and payment of the Warrant Price to the Company, but only subject to the conditions set forth herein and in the Management Unit Purchase Agreement between the Company and the Purchaser. The Management Unit Purchase Agreement provides that upon the occurrence of certain events the Warrant Price and the number of Warrant Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term Warrant Price as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time the Warrant is exercised.
Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.
Warrant Certificates, when surrendered at the office of the Company by the registered holder hereof in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.
Upon due presentment for registration of transfer of the Warrant Certificate at the office of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental charge.
The Company may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by
[Management Warrant]
anyone), for the purpose of any exercise hereof, of any distribution to the registered holder, and for all other purposes, and the Company shall not be affected by any notice to the contrary.
This Warrant does not entitle the registered holder to any of the rights of a stockholder of the Company.
The Company reserves the right to call the Warrant at any time prior to its exercise, with a notice of call in writing to the holders of record of the Warrant, giving 30 days’ notice of such call at any time after the Warrant becomes exercisable. The call price of the Warrants is to be $.01 per Warrant. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in the notice of call shall be canceled on the books of the Company and have no further value except for the $.01 call price.
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SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder irrevocably elects to exercise Warrants represented by this Warrant Certificate, and to purchase the shares of Common Stock issuable upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name of
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and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below:
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ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Warrants
For Value Received, hereby sell, assign, and transfer unto
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
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of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and appoint Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
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Exhibit 10.4
INFORMATION SERVICES GROUP, INC.
AMENDMENT TO MANAGEMENT UNIT PURCHASE AGREEMENT
AND WARRANTS ISSUED PURSUANT THERETO
Amendment to Management Unit Purchase Agreement and Warrants Issued Pursuant Thereto (this “ Amendment ”) is made as of September 29, 2006, by and between Information Services Group, Inc., a Delaware corporation (the “ Company ”), and Oenoke Partners, LLC, a Delaware limited liability company (“ Purchaser ”).
WHEREAS, the Company and the Purchaser entered into that certain Management Unit Purchase Agreement (this “ Original Agreement ”) on August 2, 2006;
WHEREAS, the Company issued to the Purchaser, pursuant to the terms of the Original Agreement, those certain Warrants to purchase 4,687,500 shares of the Company’s common stock (the “ Issued Warrants ”);
WHEREAS, the Company and the Purchaser desire to amend the Original Agreement and the Issued Warrants to change the redemption price for the Issued Warrants from $0.01 to $0.001 in order to reflect the original intention of the parties;
WHEREAS, the Company and the Purchaser further desire to amend the Original Agreement to provide that the Company’s redemption right in respect of the Issued Warrants (the “ Redemption Right ”) may be exercised immediately at any time, with no requirement that there be a time period between the date notice is given to elect to exercise such Redemption right and the actual date of exercise of the Redemption Right; and
WHEREAS, the parties intend that the Company shall exercise its Redemption Right immediately following the execution and delivery of this Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and in consideration of the promises and the mutual covenants, terms and conditions hereinafter set forth, the Original Agreement is hereby amended as follows:
“4. Redemption.
“The Company reserves the right to call the Warrant at any time prior to its exercise, with a notice of call in writing to the holders of record of the Warrant, which call may be exercised immediately following such notice. The call price of the Warrants is to be $.001 per Warrant. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in the notice of call shall be canceled on the books of the Company and have no further value except for the $.001 call price.”
[Signatures on following page]
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In Witness Whereof , the parties hereto have executed this Amendment as of the day and year first above written.
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Information Services Group, Inc. |
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/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Oenoke Partners, LLC |
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/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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New Canaan, CT 06840 |
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Exhibit 10.5
Redemption Agreement
Pursuant to the terms of that certain Management Unit Purchase Agreement, dated as of August 2, 2006 (the “ Purchase Agreement ”), by and between Information Services Group, Inc., a Delaware corporation (the “ Company ”), and Oenoke Partners, LLC, a Delaware limited liability company (“ Purchaser ”), as amended by that certain Amendment to Management Unit Purchase Agreement and Warrants Issued Pursuant Thereto, dated as of September 29, 2006, the Company issued to the Purchaser those certain Warrants to purchase 4,687,500 shares of the Company’s common stock (the “ Issued Warrants ”).
Each of the Company and the Purchaser acknowledges and agrees that pursuant to Section 4(a) of the Purchase Agreement, the Company has elected to exercise its right to redeem the Issued Warrants held by the Purchaser for a redemption price of $0.001 per share, or an aggregate amount equal to $4,687.50 (the “ Redemption Price ”). The Purchaser acknowledges and agrees that this written agreement shall constitute notice of the Company’s election to exercise its redemption right pursuant to Section 4(b) of the Purchase Agreement, and that it has delivered to the Company the Issued Warrants in exchange for the delivery of the Redemption Price by the Company.
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Information Service Group, Inc. |
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/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Oenoke Partners, LLC |
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Michael Connors |
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Managing Member |
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Exhibit 10.6
AMENDED AND RESTATED PRIVATE PLACEMENT PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PRIVATE PLACEMENT PURCHASE AGREEMENT (this “ Agreement ”) made as of this 21st day of December 2006, by and between INFORMATION SERVICES GROUP, INC. , a Delaware corporation (the “ Company ”), and OENOKE PARTNERS, LLC , a Delaware limited liability company (the “ Purchaser ”).
WHEREAS, on August 9, 2006, the Company and the Purchaser entered into that certain Private Placement Purchase Agreement (the “ Original Purchase Agreement ”);
WHEREAS, the Company and the Purchaser desire to amend and restate the terms and conditions of the Original Purchase Agreement as provided for in this Agreement;
WHEREAS , the Company desires to sell, and the Purchaser desires to acquire, in a private placement (the “ Placement ”) an aggregate of 6,000,000 warrants (the “ Placement Warrants ”), each of which are exercisable for one share of common stock of the Company, which Placement Warrants will be substantially identical to the warrants forming part of the units being issued to the public in a public offering (the “ IPO “) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (as the same may be amended from time to time, the “ Registration Statement “) which was initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006, except that (x) the Placement Warrants and the shares of common stock underlying the Placement Warrants will not be registered under the Securities Act of 1933, as amended (the “ Securities Act “) and (y) the Placement Warrants will not be subject to redemption; and
WHEREAS , the Placement Warrants will be governed by the Warrant Agreement and the Placement Warrants will be entitled to the benefits of a Registration Rights Agreement, each of which will be filed as an exhibit to the Registration Statement.
NOW , THEREFORE , for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:
1. PURCHASE OF WARRANTS . The Purchaser hereby agrees, directly or through its nominees, to purchase 6,000,000 Placement Warrants at a purchase price of $1.00 per Placement Warrant for an aggregate purchase price of $6,000,000 (the “ Purchase Price ”).
2. CLOSING . The closing of the purchase and sale of the Placement Warrants (the “ Closing ”) will take place at such time and place as the parties may agree (the “ Closing Date “), but will in no event be later than the date on which the SEC declares the Registration Statement effective (the “ Effective Date “). On the Effective Date, the Purchaser shall pay the Purchase Price by wire transfer of funds to an account maintained by the Company. Immediately prior to the closing of the IPO, the Company shall deposit the Purchase Price into the trust account described in the Registration Statement (the “ Trust Account “). The certificates for the Placement Warrants shall be delivered to the Escrow Agent, to be defined in the Stock Escrow Agreement to be filed as an exhibit to the Registration Statement, promptly after the closing of the IPO.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . The Purchaser hereby represents and warrants to the Company that:
a. The Purchaser is an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.
b. The Placement Warrants are being acquired for the Purchaser’s own account, only for investment purposes and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act.
c. The Purchaser has the full right, power and authority to enter into this Agreement and this Agreement is a valid and legally binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms.
4. WAIVER OF CLAIMS; INDEMNIFICATION . The Purchaser hereby waives any and all rights to assert any present or future claims, including any right of rescission, against the Company or Deutsche Bank Securities Inc. (“ DB ”) with respect to its purchase of the Placement Warrants, and the Purchaser agrees to indemnify and hold the Company, DB and the other underwriters in the IPO harmless from all losses, damages or expenses that relate to claims or proceedings brought against the Company, DB or such other underwriters by the Purchaser of the Placement Warrants or its transferees, heirs, assigns or any subsequent holders of the Placement Warrants in respect of the transactions contemplated hereby.
5. VOTING OF SHARES; WAIVER OF CONVERSION RIGHTS; LOCK-UP. In connection with the vote required to consummate a Business Combination (as defined in the Company’s Certificate of Incorporation), the Purchaser shall vote any shares of common stock acquired by the Purchaser in connection with the exercise of any of the Placement Warrants purchased hereby in accordance with the majority of the shares of common stock voted by the Company’s public stockholders, and therefore waives any conversion rights it might have with respect to such shares of common stock. The Purchaser hereby waives any right to receive distributions with respect to the any shares of common stock acquired by the Purchaser in connection with the exercise of any of the Placement Warrants purchased hereby upon the liquidation of the Trust Account, or as part of the Company’s plan of dissolution and distribution in the event the Company fails to consummate a Business Combination by the Termination Date (each as defined in the Company’s Certificate of Incorporation). In the event that the Company fails to consummate a Business Combination by the Termination Date, the Purchaser shall vote any shares of common stock acquired by the Purchaser in connection with the exercise of any of the Placement Warrants purchased hereby in favor of any plan of dissolution and liquidation recommended by the Company’s board of directors. The Placement Warrants will be subject to a lock-up as referred to in the Registration Statement. Subject to certain limited exceptions to be set forth therein, the Placement Warrants will not be transferable until one year following the closing of a Business Combination.
6. WAIVER OF CLAIMS AGAINST TRUST ACCOUNT. The Purchaser hereby waives any and all right, title, interest or claim of any kind in or to any distributions from the Trust Account with respect to any shares of common stock acquired by the Purchaser in connection with the exercise of the Placement Warrants purchased hereby pursuant to this Agreement (“ Claim ”) and hereby waives any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever, other than with respect to any shares of common stock purchased in the IPO or in the aftermarket held directly or indirectly by it.
7. REGISTRATION RIGHTS. Purchaser (and its assignees and transferees) shall be granted certain registration rights pursuant to a Registration Rights Agreement reasonably acceptable to the Purchaser and the Company. If the Company does not complete a Business Combination, or if the Company is unable to deliver registered shares of common stock to the Purchaser pursuant to the Registration Rights Agreement upon exercise of the Placement Warrants during the exercise period therefor, there will be no cash settlement of the Placement Warrants and the Placement Warrants will expire worthless.
8. COUNTERPARTS; FACSIMILE . This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. This Agreement or any counterpart may be executed via facsimile transmission, and any such executed facsimile copy shall be treated as an original.
9. GOVERNING LAW . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. The parties agree that any action brought by either party to interpret or enforce any provision of this Agreement shall be brought in, and each party agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate state or federal court for the district encompassing the Company’s principal place of business.
[signatures on following page]
IN WITNESS WHEREOF , the undersigned have executed this Agreement as of the date first written above.
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INFORMATION SERVICES GROUP, INC. |
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Name: Michael Connors |
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Title: Chief Executive Officer |
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OENOKE PARTNERS, LLC |
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[Private Placement Purchase Agreement]
EXHIBIT 10.7
FORM OF INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as of [ ] [ ], 2007 by and between Information Services Group, Inc. (the “ Company ”) and Continental Stock Transfer & Trust Company (the “ Trustee ”).
WHEREAS, the Company’s Registration Statement on Form S-1, as amended, No. 333-136536 (together with any registration statement filed pursuant to Rule 462(b), the “ Registration Statement ”), for its initial public offering of securities (the “ IPO ”) has been declared effective as of the date hereof by the Securities and Exchange Commission (the “ Effective Date ”); and
WHEREAS, Deutsche Bank Securities Inc. and Morgan Joseph & Co. Inc. are acting as the underwriters (the “ Underwriters ”) in the IPO; and
WHEREAS, the Company has completed a private placement of 6,000,000 securities for an aggregate purchase price of $6,000,000 (the “ Private Placement ”);and
WHEREAS, as described in the Registration Statement, and in accordance with the Company’s Certificate of Incorporation, $148,650,000 (inclusive of the Deferred Discount as defined below) of the proceeds of the IPO and the sale of securities in a private placement simultaneously with the IPO ($170,250,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a trust account for the benefit of the Company and the holders of the Company’s common stock, par value $0.001 per share, issued in the IPO (the amount to be delivered to the Trustee will be referred to herein as the “ Property ”; the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “ Public Stockholders ,” and the Public Stockholders and the Company will be referred to together as the “ Beneficiaries ”); and
WHEREAS, a portion of the Property consists of $4,500,000 (or $5,175,000 if the Underwriter’s over-allotment option is exercised in full) attributable to the Underwriters’ discount (“ Deferred Discount ”) which the Underwriters have agreed to deposit in the Trust Account (defined below); and
WHEREAS, the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
IT IS AGREED:
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Each of the parties hereto hereby acknowledge and agree that no distributions from the Trust Account shall be permitted except in accordance with Sections 1(i) and 1(j) hereof.
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if to the Trustee, to:
Continental Stock Transfer & Trust Company
17 Battery Place
8th Floor
New York, New York 10004
Attn: [ ]
Fax: [ ]
if to the Company, to:
Information Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Michael P. Connors
Fax:
with copies to:
Information Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
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Attn: Earl H.
Doppelt
Fax:
and
Kaye Scholer LLP
425 Park Avenue
New York, NY 10022
Attn: Emanuel S. Cherney, Esq.
Fax: (212) 836-8689
in either case with a copy on behalf of the Underwriters to:
Deutsche Bank Securities Inc.
60 Wall Street NYC 60-1001
New York, NY 10005
Attn: Syndicate Manager
Fax: (212) 797-9344
Morgan Joseph & Co., Inc.
[ ]
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Lazard Capital Markets, LLC
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with a copy to:
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, NY 10036
Attn: Christopher S. Auguste, Esq.
Fax: (212) 715-8000
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[Signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above.
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CONTINENTAL STOCK
TRANSFER & TRUST
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INFORMATION SERVICES GROUP, INC. |
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EXHIBIT A
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
17 Battery Place
8th Floor
New York, New York 10004
Attn: [ ]
Re: Trust Account No. [ ] Termination Letter
Gentlemen:
Pursuant to Section 1(j) of the Investment Management Trust Agreement between Information Services Group, Inc. (the “ Company ”) and Continental Stock Transfer & Trust Company (the “ Trustee ”), dated as of , 2007 (the “ Trust Agreement ”), this is to advise you that the Company has entered into an agreement (“ Business Agreement ”) with (the “ Target Business ”) to consummate a business combination with Target Business (a “ Business Combination ”) on or about [INSERT DATE]. The Company shall notify you at least 48 hours in advance of the actual date of the consummation of the Business Combination (the “ Consummation Date ”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Trust Agreement.
Pursuant to Section 3(e) of the Trust Agreement, we are providing you with [an affidavit] [a certificate] of , which verifies the vote of the Company’s stockholders in connection with the Business Combination. In accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the Trust Account to the effect that, on the Consummation Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct in writing on the Consummation Date.
On the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated and (ii) the Company shall deliver to you written instructions with respect to the transfer of the funds held in the Trust Account (the “ Instruction Letter ”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel’s letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company or, with respect to the Deferred Discount, to the Underwriters. Upon the distribution of all the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall automatically terminated and cease to have any further force or effect.
In the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation Date of a new Consummation Date, then the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business day immediately following the Consummation Date as set forth in the notice.
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INFORMATION SERVICES GROUP, INC. |
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EXHIBIT B
[LETTERHEAD OF COMPANY]
[INSERT DATE]
Continental Stock Transfer & Trust Company
17 Battery Place
8th Floor
New York, New York 10004
Attn: [ ]
Re: Trust Account No. [ ] Termination Letter
Gentlemen:
Pursuant to paragraph 1(j) of the Investment Management Trust Agreement between Information Services Group, Inc. (the “ Company ”) and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of , 2007 (the “ Trust Agreement ”), this is to advise you that the Company has been dissolved due to the Company’s inability to effect a Business Combination within the time frame specified in the Company’s prospectus relating to its IPO.
Attached hereto is a certified copy of the Certificate of Dissolution as filed with the Delaware Secretary of State. Defined terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Trust Agreement.
In accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the Trust Account. You will notify the Company and [ ] (the “ Designated Paying Agent ”) in writing as to when all of the funds in the Trust Account will be available for immediate transfer (the “ Transfer Date ”). The Designated Paying Agent shall thereafter notify you as to the account or accounts of the Designated Paying Agent that the funds in the Trust Account should be transferred to on the Transfer Date so that the Designated Paying Agent may commence distribution of such funds in accordance with the Company’s instructions. You shall have no obligation to oversee the Designated Paying Agent’s distribution of the funds. Upon the payment to the Designated Paying Agent of all the funds in the Trust Account, the Trust Agreement shall terminate in accordance with the terms thereof.
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INFORMATION SERVICES GROUP, INC. |
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EXHIBIT C
AUTHORIZED INDIVIDUAL(S) AND TELEPHONE NUMBERS
AUTHORIZED FOR TELEPHONE CALL BACK
COMPANY:
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Michael P. Connors
Telephone: (203) 517-3100
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Earl H. Doppelt
Telephone: (203) 517-3100
TRUSTEE:
Continental
Stock Transfer & Trust Company
17 Battery Place
8th Floor
New York, New York 10004
Attn: [ ]
Telephone: [ ]
SCHEDULE A
Schedule of fees pursuant to Section 3(c) of Investment Management Trust Agreement between Information Services Group, Inc. and Continental Stock Transfer & Trust Company
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TIME AND METHOD OF PAYMENT |
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AMOUNT |
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Initial acceptance fee |
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Initial closing of IPO by wire transfer |
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$[ ] |
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Annual fee |
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First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check |
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$[ ] |
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Transaction processing fee for disbursements to Company under Section 1(i) |
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Deduction by Trustee from disbursement made to Company under Section 1(i) |
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$[ ] |
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Agreed: |
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Dated: [ , 200 ] |
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Information Services Group, Inc. |
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Continental Stock Transfer & Trust Co. |
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EXHIBIT 10.8
FORM OF STOCK ESCROW AGREEMENT
This Stock Escrow Agreement (this “ Agreement ”) is made and entered into as of [ ], 2007, by and among Continental Stock Transfer and Trust Company, a New York corporation (“ Escrow Agent ”), Information Services Group, Inc., a Delaware corporation (the “ Company ”), and the stockholders of the Company (collectively, the “ Stockholders ”) and Oenoke Partners, LLC (“ Oenoke ”), with reference to the following facts:
A. The Company has entered into an Underwriting Agreement dated [ ], 2007 (“ Underwriting Agreement ”), with Deutsche Bank Securities, Inc., acting as representative (“ Representative ”) of the underwriters (collectively, the “ Underwriters ”), pursuant to which, among other matters, the Underwriters have agreed to purchase 18,750,000 units (“ Units ”) to be issued by the Company. Each Unit consists of one share of the Company’s common stock, par value $.0001 per share (“ Common Stock ”), and one warrant (“ Warrant ”), and each Warrant entitles the holder thereof to purchase one share of Common Stock for an exercise price of $6.00, all as more fully described in the Company’s final prospectus, dated [ ], 2007 (“ Prospectus ”) comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-136536) under the Securities Act of 1933, as amended (“ Registration Statement ”).
B. Oenoke owns shares of Common Stock and the other Stockholders own an aggregate of shares of Common Stock.
C. The Company has also entered into a Private Placement Securities Purchase Agreement dated as of [ ], 2007 with Oenoke (the “ Private Placement Agreement ”), pursuant to which Oenoke has agreed to purchase an aggregate of 6,000,000 warrants in a form substantially identical to the warrants provided in the Units being offered by the Underwriters.
D. In order to facilitate the public offering of the Units, (i) the Stockholders have agreed to deposit all shares of Common Stock they own as of the date hereof (the “ Escrow Shares ”), and (ii) Oenoke has agreed to deposit all warrants it is to purchase pursuant to the Private Placement Agreement (the “ Escrow Warrants ”, and together with the Escrow Shares, the “ Escrow Securities ”) in escrow as hereinafter provided.
E. The Company and the Stockholders desire that the Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed as hereinafter provided.
NOW, THEREFORE, with reference to the foregoing facts, the parties agree as follows:
1. Appointment of Escrow Agent
. The Company and the Stockholders hereby appoint the Escrow Agent to act in accordance with and subject to the terms of this Agreement, and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms.
2. Deposit of Escrow Securities
. On or before the effective date of the Registration Statement, the Stockholders (or the Company on behalf of any or all of the Stockholders) shall each deliver to the Escrow Agent a certificate or certificates representing their Escrow Securities, to be held and disbursed subject to the terms and conditions of this Agreement. The Stockholders acknowledge that the certificate or certificates representing their Escrow Securities are legended to reflect that such Escrow Securities are subject to the terms and conditions of this Agreement.
3. Disbursement of the Escrow Securities.
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4. Rights of the Stockholders in Escrow Securities .
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5. Concerning the Escrow Agent .
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6. Miscellaneous .
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If to the Company, to:
Information Services
Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attention: Michael P. Connors
Facsimile:
with a copy to:
Information Services
Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attention: Earl H. Doppelt
Facsimile:
If to any of the Stockholders to:
c/o Information Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attention: Michael P. Connors
Facsimile:
and if to the Escrow Agent, to:
Continental Stock Transfer &
Trust Company
17 Battery Place
New York, New York 10004
Attn: Chairman
Facsimile:
A copy of any notice sent hereunder shall be sent to:
Deutsche Bank Securities, Inc.
[ ]
New York, New York 100
Attn:
Facsimile:
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and:
Kaye Scholer LLP
425 Park Avenue
New York, NY 10022
Attn: Emanuel Cherney, Esq.
Facsimile: (212) 836-8689
and:
Kramer Levin Naftalis &
Frankel LLP
1177 Avenue of the Americas
New York, NY 10036
Attn: Christopher S. Auguste, Esq.
Facsimile:
Any party may change the person and address to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.
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WITNESS the execution of this Agreement as of the date first above written.
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INFORMATION SERVICES GROUP, INC. |
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Michael P. Connors,
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OENOKE PARTNERS, LLC |
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OTHER STOCKHOLDERS OF
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Exhibit A
[Form of Insider Letter]
Exhibit 10.9
THIS REGISTRATION RIGHTS AGREEMENT (this " Agreement ") is entered into as of the day of , 200, by and among Information Services Group, Inc., a Delaware corporation (the " Company ") and the undersigned parties listed under Investor on the signature page hereto (each, an " Investor " and collectively, the " Investors ").
WHEREAS, the Investors currently hold all of the issued and outstanding securities of the Company; and
WHEREAS, the Investors and the Company desire to enter into this Agreement to provide the Investors with certain rights relating to the registration of shares of Common Stock, Warrants and Units held by them.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. The following capitalized terms used herein have the following meanings:
" Agreement " means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
" Commission " means the Securities and Exchange Commission, or any other federal agency then administering the Securities Act or the Exchange Act.
" Common Stock " means the common stock, par value $0.001 per share, of the Company.
" Company " is defined in the preamble to this Agreement.
" Demand Registration " is defined in Section 2.1.1.
" Demanding Holder " is defined in Section 2.1.1.
" Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
" Form S-3 " is defined in Section 2.3.
" Indemnified Party " is defined in Section 4.3.
" Indemnifying Party " is defined in Section 4.3.
" Investor " is defined in the preamble to this Agreement.
" Investor Indemnified Party " is defined in Section 4.1.
" Majority-in-Interest " is defined in Section 2.1.1.
" Maximum Number of Securities " is defined in Section 2.1.4.
" Notices " is defined in Section 6.3.
" Piggy-Back Registration " is defined in Section 2.2.1.
" Register ," " Registered " and " Registration " mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
" Registrable Securities " mean all of the shares of Common Stock, Warrants and Units owned or held by Investors. Registrable Securities include any warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in
replacement of such Registrable Securities. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding, or (d) the Registrable Securities are saleable under Rule 144(k) of the Securities Act.
" Registration Statement " means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of Common Stock, Warrants and/or Units, as applicable (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).
" Release Date " means with respect to any shares of Common Stock the date on which such shares of Common Stock are disbursed from escrow pursuant to that certain Stock Escrow Agreement dated as of , 200_ by and among the parties hereto and Continental Stock Transfer & Trust Company.
" Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
" Underwriter " means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer's market-making activities.
" Unit " means a unit consisting of a share of Common Stock and a Warrant.
" Warrant " means a warrant to purchase one share of Common Stock.
2.1.1 Request for Registration. At any time and from time to time on or after the Release Date, the holders of a majority-in-interest (determined on a fully diluted basis, i.e., assuming the exercise of all Warrants that are Registrable Securities (including Warrants forming a part of Units)) (the " Majority-in-Interest ") of the Registrable Securities) held by the Investors or the transferees of the Investors, may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a " Demand Registration "). Any demand for a Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder's Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a " Demanding Holder ") shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be obligated to effect more than an aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of Registrable Securities.
2.1.2 Effective Registration . A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration registering at least 75% of the Registrable Securities specified in the notice received pursuant to Section 2.1.1., determined on the basis described in Section 2.1.1, has been declared effective and the Company has
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complied with all of its obligations under this Agreement with respect thereto; provided , however , that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a Majority-in-Interest of the Demanding Holders thereafter elect to continue the offering; provided , further , that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.
2.1.3 Underwritten Offering . If a Majority-in-Interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration shall be conditioned upon such holder's participation in such underwriting and the inclusion of such holder's Registrable Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating the Demand Registration.
2.1.4 Reduction of Offering . Subject to the piggy-back registration rights set forth in those certain Unit Purchase Options issued to Deutsche Bank Securities Inc., Morgan Joseph & Co, Inc. and Lazard Capital Markets LLC or their designees in connection with the Company's initial public offering (the " Unit Purchase Options " and such registrable securities, the " Option Securities "), which rights in no way shall be limited by the Maximum Number of Securities to be included in the Registration Statement pursuant to this Section 2.1.4. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock or other securities, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of securities that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of securities, as applicable, the " Maximum Number of Securities "), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with the number of securities that each such Person has requested be included in such registration, regardless of the number of securities held by each such Person (such proportion is referred to herein as " Pro Rata ")) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Withdrawal . If a Majority-in-Interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such Majority-in-Interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter or Underwriters of their request to
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withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration. If the Majority-in-Interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 2.1.
2.2 Piggy-Back Registration .
2.2.1 Piggy-Back Rights . If at any time on or after the Release Date the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for stockholders of the Company for their account (or by the Company and by stockholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company's existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a " Piggy-Back Registration "). The Company shall cause such Registrable Securities to be included in such registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.
2.2.2 Reduction of Offering . Subject to the piggy-back registration rights set forth in the Unit Purchased Options, which rights in no way shall be limited by the Maximum Number of Securities to be included in the Registration Statement pursuant to this Section 2.2.2, if the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of securities which the Company desires to sell, taken together with shares of Common Stock or other securities, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 2.2, and the shares of Common Stock or other securities, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then the Company shall include in any such registration:
(i) If the registration is undertaken for the Company's account: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, that are Registrable Securities, as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such security holders, Pro Rata, that can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the
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shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons and that can be sold without exceeding the Maximum Number of Securities; and
(ii) If the registration is a "demand" registration undertaken at the demand of persons other than the holders of Registrable Securities pursuant to written contractual arrangements with such persons, (A) first, the shares of Common Stock or other securities for the account of the demanding persons that can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities comprised of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Securities.
2.2.3 Withdrawal . Any holder of Registrable Securities may elect to withdraw such holder's request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a registration statement at any time prior to the effectiveness of the Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.
2.3 Registrations on Form S-3 . The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available at such time (" Form S-3 "); provided , however , that the Company shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion of such holder's or holders' Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities or other securities of the Company, if any, of any other holder or holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided , however , that the Company shall not be obligated to effect any such registration pursuant to this Section 2.3(i) if Form S-3 is not available for such offering or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.
3.1 Filings; Information . Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use its reasonable best efforts to effect
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the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:
3.1.1 Filing Registration Statement . The Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its reasonable best efforts to cause such Registration Statement to become and remain effective for the period required by Section 3.1.3; provided , however , that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the holders a certificate signed by the Chief Executive Officer or Chairman of the Board of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such Registration Statement to be effected at such time; provided further , however , that the Company shall not have the right to exercise the right set forth in the immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.
3.1.2 Copies . The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the holders of Registrable Securities included in such registration, and such holders' legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.
3.1.3 Amendments and Supplements . The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement (which period shall not exceed the sum of one hundred eighty (180) days plus any period during which any such disposition is interfered with by any stop order or injunction of the Commission or any governmental agency or court) or such securities have been withdrawn.
3.1.4 Notification . After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing in all events within two (2) business days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or
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necessary to make the statements therein not misleading, and promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.
3.1.5 State Securities Laws Compliance . The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or "blue sky" laws of such jurisdictions in the United States as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other Governmental Authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided , however , that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.
3.1.6 Agreements for Disposition . The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such registration statement. No holder of Registrable Securities included in such registration statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder's organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder's material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation . The principal executive officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors.
3.1.8 Records . The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.
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3.1.9 Opinions and Comfort Letters . The Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company's independent public accountants delivered to any Underwriter. In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement, at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.
3.1.10 Earnings Statement . The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its stockholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.1.11 Listing . The Company shall use its reasonable best efforts to cause all Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a Majority-in-Interest of the Registrable Securities included in such registration.
3.2 Obligation to Suspend Distribution . Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company's Board of Directors, of the ability of all "insiders" covered by such program to transact in the Company's securities because of the existence of material non-public information, each holder of Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of "insiders" to transact in the Company's securities is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent file copies then in such holder's possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.
3.3 Registration Expenses . The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or "blue sky" laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company's internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection with such registration and (ix) the fees and expenses of one legal counsel selected by the holders of a Majority-in-Interest of the Registrable Securities included in such registration. The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall
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be borne by such holders. Additionally, in an underwritten offering, all selling stockholders and the Company shall bear the expenses of the underwriter pro rata in proportion to the respective amount of shares each is selling in such offering.
3.4 Information . The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company's obligation to comply with federal and applicable state securities laws.
4.1 Indemnification by the Company . The Company agrees to indemnify and hold harmless each Investor and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any, who controls an Investor and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an " Investor Indemnified Party "), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the Company shall promptly reimburse the Investor Indemnified Party for any legal and any other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided , however , that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein. The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.
4.2 Indemnification by Holders of Registrable Securities . Each selling holder of Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each underwriter (if any), and each other selling holder and each other person, if any, who controls another selling holder or such underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading,
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if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each other selling holder or controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. Each selling holder's indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.
4.3 Conduct of Indemnification Proceedings . Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (the " Indemnified Party ") shall, if a claim in respect thereof is to be made against any other person for indemnification hereunder, notify such other person (the " Indemnifying Party ") in writing of the loss, claim, judgment, damage, liability or action; provided , however , that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided , however , that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.
4.4 Contribution .
4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
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4.4.2 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section 4.4.1.
4.4.3 The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5.1 Rule 144 . The Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar Rule or regulation hereafter adopted by the Commission.
6.1 Other Registration Rights . Except with respect to those securities issued or issuable upon exercise of the Unit Purchase Options, the Company represents and warrants that no person, other than a holder of the Registrable Securities, has any right to require the Company to register any shares of the Company's capital stock for sale or to include shares of the Company's capital stock in any registration filed by the Company for the sale of shares of capital stock for its own account or for the account of any other person.
6.2 Assignment; No Third Party Beneficiaries . This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and the permitted assigns of the Investors or holder of Registrable Securities or of any assignee of the Investors or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.2.
6.3 Notices . All notices, demands, requests, consents, approvals or other communications (collectively, " Notices ") required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided , that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day. Notice otherwise sent as provided herein shall be deemed given on the next business day
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following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.
To the Company:
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Chief Executive Officer
with a copy to:
Kaye
Scholer LLP
425 Park Avenue
New York, New York 10022
Attn: Emanuel Cherney, Esq.
To an Investor, to such Investor c/o
Information
Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Attn: Chief Executive Officer
6.4 Severability . This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.5 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.
6.6 Entire Agreement . This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
6.7 Modifications and Amendments . No amendment, modification or termination of this Agreement shall be binding upon any party unless executed in writing by such party.
6.8 Titles and Headings . Titles and headings of Sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.9 Waivers and Extensions . Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
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6.10 Remedies Cumulative . In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Investor or any other holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.11 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
6.12 Waiver of Trial by Jury . EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE INVESTOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
| INFORMATION SERVICES GROUP, INC. | |||
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Name: Michael Connors
Title: Chief Executive Officer |
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INVESTORS: |
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Oenoke Partners, LLC |
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By: |
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Name: Michael Connors
Title: Managing Member |
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Robert J. Chrenc |
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R. Glenn Hubbard |
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Robert E. Weissman |
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Barry Holt |
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Francis B. Barker |
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David Harkness |
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William Fitzgerald |
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[Registration Rights Agreement]
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Exhibit 10.10
PROMISSORY NOTE
| $150,000 | As of October 3, 2006 | |
| New York, New York |
Information Services Group, Inc. ("Maker") promises to pay to the order of Oenoke Partners, LLC ("Payee") the principal sum of one-hundred fifty thousand dollars ($150,000) in lawful money of the United States of America together with interest on the unpaid principal balance of this Promissory Note (this "Note"), on the terms and conditions described below.
1. Principal. The principal balance of this Note shall be repayable on the earlier of (i) October 3, 2007, and (ii) the date on which Maker consummates an initial public offering of its securities under the Securities Act of 1933, as amended.
2. Interest. Interest shall accrue at the rate of 5.0% per year, compounded semiannually, on the unpaid principal balance of this Note and shall be payable when principle is payable hereunder.
3. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorneys' fees, then to accrued and unpaid interest and finally to the reduction of the unpaid principal balance of this Note.
4. Events of Default. The following shall constitute Events of Default:
(a) Failure to Make Required Payments. Failure by Maker to pay the principal of this Note within five (5) business days following the date when due.
(b) Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under the Federal Bankruptcy Code, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
5. Remedies.
(a) Upon the occurrence of an Event of Default specified in Section 4(a), Payee may, by written notice to Maker, declare this Note to be due and payable, whereupon the principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 4(b) and 4(c), the unpaid principal balance of, and all other sums payable with regard to, this Note shall
automatically and immediately become due and payable, in all cases without any action on the part of Payee.
6. Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected hereunder in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note.
7. Notices. Any notice called for hereunder shall be deemed properly given if (i) sent by certified mail, return receipt requested, (ii) personally delivered, (iii) dispatched by any form of private or governmental express mail or delivery service providing receipted delivery, (iv) sent by facsimile or (v) sent by e-mail, to the following addresses or to such other address as either party may designate by notice in accordance with this Section:
If to Maker:
Information
Services Group, Inc.
107 Elm Street
Stamford, CT 06902
If to Payee:
Oenoke
Partners, LLC
725 Oenoke Ridge Road
New Canaan, CT 06840
Notice shall be deemed given on the earlier of (i) actual receipt by the receiving party, (ii) the date shown on a facsimile transmission confirmation, (iii) the date on which an e-mail transmission was received by the receiving party's on-line access provider, (iv) the date reflected on a signed delivery receipt, or (vi) two (2) Business Days following tender of delivery or dispatch by express mail or delivery service.
8. Construction. This Note shall be construed and enforced in accordance with the domestic, internal law, but not the law of conflict of laws, of the State of Delaware.
9. Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed as of the day and year first above written.
| INFORMATION SERVICES GROUP, INC. | ||||
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By: |
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/s/ MICHAEL CONNORS Michael Connors, Chairman and Chief Executive Officer |
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Exhibit 10.11
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee was appointed a director of the Company on August 7, 2006 by written consent of the sole director and ratification by the sole stockholder of the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO ”) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement ”) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transfere |
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By: |
/s/ Robert E. Weissman |
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Robert E. Weissman |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
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Aggregate Purchase Price |
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Robert E. Weissman |
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62,500 |
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$ |
62.50 |
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Exhibit 10.12
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee was appointed a director of the Company on August 7, 2006 by written consent of the sole director and ratification by the sole stockholder of the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO ”) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement ”) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transferee |
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By: |
/s/ Robert J. Chrenc |
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Robert J. Chrenc |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
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Aggregate Purchase Price |
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Robert J. Chrenc |
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62,500 |
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$ |
62.50 |
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Exhibit 10.13
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee was appointed a director of the Company on August 7, 2006 by written consent of the sole director and ratification by the sole stockholder of the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO ”) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement ”) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transferee |
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By: |
/s/ R. Glenn Hubbard |
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R. Glenn Hubbard |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
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Aggregate Purchase Price |
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R. Glenn Hubbard |
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62,500 |
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$ |
62.50 |
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Exhibit 10.14
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee serves as a special advisor of the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO ”) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement ”) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transferee |
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By: |
/s/ Francis B. Barker |
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Francis B. Barker |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
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Aggregate Purchase Price |
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Francis B. Barker |
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200,000 |
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$ |
200.00 |
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Exhibit 10.15
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee serves as a special advisor of the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO “) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement “) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transferee |
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By: |
/s/ Barry Holt |
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Barry Holt |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
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Aggregate Purchase Price |
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Barry Holt |
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50,000 |
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$ |
50.00 |
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Exhibit 10.16
IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE SECURITIES TRANSFERRED HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING MADE WITH RESPECT TO SUCH SECURITIES, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY DOCUMENT IN CONNECTION WITH SUCH OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
STOCK TRANSFER AGREEMENT
This Stock Transfer Agreement (this “ Agreement ”) is made as of December 21, 2006, by and among Oenoke Partners, LLC a Delaware limited liability company (“ Oenoke ”), Information Services Group, Inc. (the “ Company ”) and the individual whose name is set forth on Exhibit A (the “ Transferee ”).
WHEREAS, pursuant to the terms of the Management Unit Purchase Agreement, dated August 2, 2006, by and between Oenoke and the Company (the “ Management Unit Purchase Agreement ”), Oenoke purchased 4,687,500 units (the “ Initial Units ”), each of which consists of a share of Common Stock of the Company (the “ Stock ”; the shares of Stock underlying the Initial Units, the “ Initial Shares ”) and a warrant to purchase a share of Stock (the “ Warrants ”; the Warrants underlying the Initial Units, the “ Initial Warrants ”) at $0.002 per Initial Unit, for an aggregate purchase price of $9,375.00;
WHEREAS, the Company subsequently redeemed the Initial Warrants from Oenoke;
WHEREAS, the Transferee served as a real estate consultant for the Company;
WHEREAS, the Company anticipates issuing units (the “ Public Units ”) to the public (the “ IPO ”) pursuant to the terms and conditions set forth in the registration statement on Form S-1 (the “ Registration Statement ”) initially filed with the Securities and Exchange Commission (the “ SEC ”) on August 11, 2006;
WHEREAS, the Company desires that the Transferee own an interest in the Company; and
WHEREAS, on the terms and conditions contained in this Agreement, each Transferee desires to purchase from Oenoke, and Oenoke desires to transfer to each Transferee, the number of Initial Shares set forth opposite such Transferee’s name on Exhibit A hereto (collectively, the “ Transferred Shares ”) in cash for the amount set forth thereon.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the Company, Oenoke and the Transferee hereby agree as follows:
2
3
4
[Signatures on following page]
5
In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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Oenoke Partners, LLC |
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By: |
/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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107 Elm Street |
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Stamford, CT 06902 |
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[Stock Transfer Agreement]
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Transferee |
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By: |
/s/ William Fitzgerald |
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William Fitzgerald |
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[Stock Transfer Agreement]
EXHIBIT A
[Transferee, Shares, Purchase Price]
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Transferee |
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Number of Shares |
|
Aggregate Purchase Price |
|
|
|
William Fitzgerald |
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12,500 |
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$ |
12.50 |
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ANNEX - ACCREDITED INVESTOR UNDER REGULATION D
Accredited Investor - The undersigned hereby confirms to the Company that the undersigned (check each category which applies):
|
o |
a) |
is a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which plan fiduciary is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors; |
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o |
b) |
is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; |
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|
o |
c) |
is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation, Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the Purchased Stock, with total assets in excess of $5,000,000; |
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is a director, executive officer or general partner of the Company, or any director, executive officer, or a general partner of a general partner of the Company; |
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is a natural person who had a joint income with his or her spouse in excess of $300,000 in both 2004 and 2005 and who reasonably expects reaching the same income level in 2006; |
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is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Purchased Stock, whose purchase is directed by a person who either alone or with his purchaser representative has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment, or that the Company reasonably believes immediately prior to making any sale that such purchaser comes within this definition; |
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is an entity in which all of the equity owners are Accredited Investors meeting one or more of the tests under subparagraphs (a) - (g). |
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10
Exhibit 10.17
Information Services
Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Date: December 21, 2006
Mr. Barry Holt
6170 N. Cadena de Montanas
Tucson, AZ 85718
Re: Senior Advisory Services for Information Services Group, Inc.
Dear Mr. Holt:
We are pleased that you have decided to serve as a Senior Advisor to our company, Information Services Group, Inc., a Delaware corporation (the “ Company ”). This letter will describe our understanding of the terms pursuant to which you will serve.
If all is acceptable to you, please execute the acknowledgement below and return this agreement (this “ Agreement ”) to us in the enclosed self addressed stamped envelope.
1. Services to be Provided . During the term of this Agreement, you will serve as a Senior Advisor to the Company. You shall have such duties, responsibilities and functions as may be assigned to you from time to time by the Chief Executive Officer of the Company (the “ CEO ”). In furtherance of the foregoing, it is expected that you will report to the CEO on a regular basis and perform such tasks as the CEO may direct you to perform. Such tasks are expected to include the identification and analysis of potential acquisition opportunities for the Company and the performance of certain other administrative, executive and managerial services for or on behalf of the Company. It is expected and you agree that you will devote approximately forty percent (40%) of your time during normal business hours to the performance of your duties as a Senior Advisor to the Company.
2. Expense Reimbursement . In connection with your performance of duties as a Senior Advisor to the Company, the Company shall be obligated to reimburse you for those reasonable and properly documented out-of-pocket expenses which you incur in connection with the performance of your duties as a Senior Advisor to the Company, including, without limitation, the identification of potential target businesses and performing due diligence activities in respect of suitable business combinations; provided , that any such expenses which you incur that are, individually or in the aggregate, in excess of $1000.00, shall only be reimbursable to the extent such expenses are approved by the Chief Executive Officer of the Company prior to incurring such expenses.
3. Transfer of Company Common Stock from Oenoke Partners, LLC . In connection with your serving as a Senior Advisor it is contemplated that you will receive shares of common stock, par value $0.001, of the Company (such shares of common stock, the “ Company Common Stock ”), pursuant to the terms of a Share Transfer Agreement (the “ Share Transfer Agreement ”), to be entered into by and among Oenoke Partners, LLC, a Delaware limited liability company, the Company and yourself.
4. Term . You will serve as Senior Advisor upon the signing of this Agreement and will continue to serve as Senior Advisor until the earlier of (a) the earlier of (i) the date upon which the Company effectuates a business combination as described in the registration statement on Form S-1 filed with the Securities Exchange Commission (the “Registration Statement”) or (ii) in the event the Company does not effectuate a business combination, the expiration of eighteen (18) months from the date of the consummation of the offering described in the Registration Statement or twenty-four (24) months from such date in the event the extension criteria described in the Registration Statement are satisfied, or (b) the date upon which this Agreement is terminated by the Company in accordance with this Paragraph 4.
5. Confidentiality; Securities Law Compliance .
a) You hereby acknowledge and agree that in the course of performing your obligations under this Agreement, you may become aware of information relating to the business or activities of the Company which are proprietary and/or confidential (all of such proprietary and/or confidential information is hereinafter referred to as “ Confidential Information ”). You hereby agree to maintain the confidential status of such Confidential Information, not to use any such Confidential Information for any purpose other than the purpose for which it was originally disclosed to you in connection with the performance of your duties under this Agreement, and not to disclose any such Confidential Information to any third party, unless such information (i) is or has become available to the public from a source other than the Company or any employee, officer, director or agent of the Company or (ii) is required to be disclosed by law. To the extent you may be required by law to disclose Confidential Information to governmental agencies or authorities for a particular purpose, you shall limit disclosure to that purpose, and you shall immediately provide the Company with prior written notice of any such disclosure, which notice shall specify the substance of the disclosure. In addition, you agree to take all reasonable steps to prevent any further disclosures of such Confidential Information.
b) You understand that the Company has filed a registration statement under the Securities Act of 1933 with the Securities and Exchange Commission. You agree not to make any disclosures about the Company’s registration process or the Registration Statement except with the prior approval of the CEO. In addition, following the effectiveness of the Registration Statement, you agree to comply with the Company’s policies and procedures regarding trading in its securities and other securities law matters.
6. Non-Competition . During the term of this Agreement, you acknowledge and agree that you will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation, financing, or control of, be employed by, serve as a director or officer of, or render any services or advice to, any business that is involved in the information services industry. Notwithstanding the foregoing, you may
2
purchase or otherwise acquire up to five percent (5%) of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934.
7. Independent Contractor . This Agreement is intended to create an independent contractor relationship between the parties for purposes of federal, state and local law, including the Internal Revenue Code of 1986, as amended.
8. Survival . The provisions in Paragraphs 5, 7, 8 and 9 shall survive any termination of this Agreement. Upon such termination, you shall be obligated to return any Confidential Information which you may have received, as well as any copy or other reproduction, including, without limitation, electronic data reproductions or representations.
9. Specific Performance . You acknowledge and agree that any breach of your obligations under Paragraphs 5 or 6 of this Agreement could cause irreparable damage to the Company and that in the event that you are in breach of any of the provisions of such Paragraphs, the Company shall have, in addition to any and all remedies it may have at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of your obligations under such Paragraphs, without the necessity of posting a bond, plus the recovery of any and all expenses incurred by the Company, including attorneys’ fees, in connection with the enforcement of its rights under this Agreement.
10. Assignment . Neither party may assign or transfer any rights or obligations under this Agreement, without the prior written approval of the other party; provided, however, that the Company shall have the right to assign its rights under this Agreement to an entity controlling, controlled by, or under common control with the Company, or to a successor entity which has acquired all or substantially all of the assets of the Company by acquisition, stock, merger, or otherwise.
11. Amendment . This Agreement may be amended or modified only by an instrument in writing signed by both parties.
12. Severability . If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each and every other term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
13. Governing Law; Venue . This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Each of the parties hereby agrees to submit to the jurisdiction and venue of any Federal or State court located in the Borough of Manhattan in New York City with respect to any actions, claims or proceeding arising under this Agreement. Each party hereby irrevocably waives any defense or objection to such submission to jurisdiction.
14. Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of such counterparts shall constitute one and the same instrument.
3
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INFORMATION SERVICES GROUP, INC. |
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By: |
/s/ Michael Connors |
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Name: Michael Connors |
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Title: Chief Executive Officer |
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ACKNOWLEDGED AND AGREED: |
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/s/ Barry Holt |
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Barry Holt, Senior Advisor |
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4
Exhibit 10.18
Information Services Group, Inc.
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Date: December 21, 2006
Mr. Francis B. Barker
5700 South Elm Street
Greenwood Village, CO 80121
Re: Senior Advisory Services for Information Services Group, Inc.
Dear Mr. Barker:
We are pleased that you have decided to serve as a Senior Advisor to our company, Information Services Group, Inc., a Delaware corporation (the “ Company ”). This letter will describe our understanding of the terms pursuant to which you will serve.
If all is acceptable to you, please execute the acknowledgement below and return this agreement (this “ Agreement ”) to us in the enclosed self addressed stamped envelope.
1. Services to be Provided . During the term of this Agreement, you will serve as a Senior Advisor to the Company. You shall have such duties, responsibilities and functions as may be assigned to you from time to time by the Chief Executive Officer of the Company (the “ CEO ”). In furtherance of the foregoing, it is expected that you will report to the CEO on a regular basis and perform such tasks as the CEO may direct you to perform. Such tasks are expected to include the identification and analysis of potential acquisition opportunities for the Company and the performance of certain other administrative, executive and managerial services for or on behalf of the Company. It is expected and you agree that you will devote substantially all of your time during normal business hours to the performance of your duties as a Senior Advisor to the Company.
2. Expense Reimbursement . In connection with your performance of duties as a Senior Advisor to the Company, the Company shall be obligated to reimburse you for those reasonable and properly documented out-of-pocket expenses which you incur in connection with the performance of your duties as a Senior Advisor to the Company, including, without limitation, the identification of potential target businesses and performing due diligence activities in respect of suitable business combinations; provided , that any such expenses which you incur that are, individually or in the aggregate, in excess of $1000.00, shall only be reimbursable to the extent such expenses are approved by the Chief Executive Officer of the Company prior to incurring such expenses.
3. Transfer of Company Common Stock from Oenoke Partners, LLC . In connection with your serving as a Senior Advisor it is contemplated that you will receive shares of common stock, par value $0.001, of the Company (such shares of common stock, the “ Company Common Stock ”), pursuant to the terms of a Share Transfer Agreement (the “ Share Transfer Agreement ”), to be entered into by and among Oenoke Partners, LLC, a Delaware limited liability company, the Company and yourself.
4. Term . You will serve as Senior Advisor upon the signing of this Agreement and will continue to serve as Senior Advisor until the earlier of (a) the earlier of (i) the date upon which the Company effectuates a business combination as described in the registration statement on Form S-1 filed with the Securities Exchange Commission (the “Registration Statement”) or (ii) in the event the Company does not effectuate a business combination, the expiration of eighteen (18) months from the date of the consummation of the offering described in the Registration Statement or twenty-four (24) months from such date in the event the extension criteria described in the Registration Statement are satisfied. Notwithstanding the foregoing, either the Company or Senior Advisor may terminate this Agreement at any time by furnishing written notice of such party's intent to terminate to the other party.
5. Confidentiality; Securities Law Compliance .
a) You hereby acknowledge and agree that in the course of performing your obligations under this Agreement, you may become aware of information relating to the business or activities of the Company which are proprietary and/or confidential (all of such proprietary and/or confidential information is hereinafter referred to as “ Confidential Information ”). You hereby agree to maintain the confidential status of such Confidential Information, not to use any such Confidential Information for any purpose other than the purpose for which it was originally disclosed to you in connection with the performance of your duties under this Agreement, and not to disclose any such Confidential Information to any third party, unless such information (i) is or has become available to the public from a source other than the Company or any employee, officer, director or agent of the Company or (ii) is required to be disclosed by law. To the extent you may be required by law to disclose Confidential Information to governmental agencies or authorities for a particular purpose, you shall limit disclosure to that purpose, and you shall immediately provide the Company with prior written notice of any such disclosure, which notice shall specify the substance of the disclosure. In addition, you agree to take all reasonable steps to prevent any further disclosures of such Confidential Information.
b) You understand that the Company has filed a registration statement under the Securities Act of 1933 with the Securities and Exchange Commission. You agree not to make any disclosures about the Company’s registration process or the Registration Statement except with the prior approval of the CEO. In addition, following the effectiveness of the Registration Statement, you agree to comply with the Company’s policies and procedures regarding trading in its securities and other securities law matters.
6. Non-Competition . During the term of this Agreement, you acknowledge and agree that you will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation, financing, or control of, be employed by, serve as a director or officer of, or render any services or advice to, any business that is involved in the information services industry. Notwithstanding the foregoing, you may
2
purchase or otherwise acquire up to five percent (5%) of any class of securities of any enterprise ( but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934.
7. Independent Contractor . This Agreement is intended to create an independent contractor relationship between the parties for purposes of federal, state and local law, including the Internal Revenue Code of 1986, as amended.
8. Survival . The provisions in Paragraphs 5, 7, 8 and 9 shall survive any termination of this Agreement. Upon such termination, you shall be obligated to return any Confidential Information which you may have received, as well as any copy or other reproduction, including, without limitation, electronic data reproductions or representations.
9. Specific Performance . You acknowledge and agree that any breach of your obligations under Paragraphs 5 or 6 of this Agreement could cause irreparable damage to the Company and that in the event that you are in breach of any of the provisions of such Paragraphs, the Company shall have, in addition to any and all remedies it may have at law, the right to an injunction, specific performance or other equitable relief to prevent the violation of your obligations under such Paragraphs, without the necessity of posting a bond, plus the recovery of any and all expenses incurred by the Company, including attorneys’ fees, in connection with the enforcement of its rights under this Agreement.
10. Assignment . Neither party may assign or transfer any rights or obligations under this Agreement, without the prior written approval of the other party; provided, however, that the Company shall have the right to assign its rights under this Agreement to an entity controlling, controlled by, or under common control with the Company, or to a successor entity which has acquired all or substantially all of the assets of the Company by acquisition, stock, merger, or otherwise.
11. Amendment . This Agreement may be amended or modified only by an instrument in writing signed by both parties.
12. Severability . If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each and every other term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
13. Governing Law; Venue . This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Each of the parties hereby agrees to submit to the jurisdiction and venue of any Federal or State court located in the Borough of Manhattan in New York City with respect to any actions, claims or proceeding arising under this Agreement. Each party hereby irrevocably waives any defense or objection to such submission to jurisdiction.
14. Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of such counterparts shall constitute one and the same instrument.
3
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INFORMATION SERVICES GROUP, INC. |
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By: |
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/s/ Michael Connors |
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Name: Michael Connors |
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Title: Chief Executive Officer |
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ACKNOWLEDGED AND AGREED: |
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/s/ Francis B. Barker |
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Francis B. Barker, Senior Advisor |
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4
Exhibit 10.19
December 21, 2006
Information
Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche
Bank Securities Inc.
60 Wall Street, 4
th
Floor
New York, New York 10005
Morgan
Joseph & Co. Inc.
600 Fifth Avenue, 19
th
Floor
New York, New York 10020
Lazard
Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned officer, director and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Michael P. Connors |
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Michael P. Connors |
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Exhibit 10.20
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned officer and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Frank Martell |
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Frank Martell |
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Exhibit 10.21
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned officer and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Earl H. Doppelt |
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Earl H. Doppelt |
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Exhibit 10.22
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned officer and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
3
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Richard G. Gould |
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Richard G. Gould |
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Exhibit 10.23
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned director and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
2
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Robert E. Weissman |
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Robert E. Weissman |
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Exhibit 10.24
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned director and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
2
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Robert J. Chrenc |
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Robert J. Chrenc |
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Exhibit 10.25
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned director and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
2
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ R. Glenn Hubbard |
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R. Glenn Hubbard |
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Exhibit 10.26
December 21, 2006
Information
Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche
Bank Securities Inc.
60 Wall Street, 4
th
Floor
New York, New York 10005
Morgan
Joseph & Co. Inc.
600 Fifth Avenue, 19
th
Floor
New York, New York 10020
Lazard
Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned senior advisor and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
2
3
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Francis B. Barker |
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Francis B. Barker |
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Exhibit 10.27
December 21, 2006
Information
Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche
Bank Securities Inc.
60 Wall Street, 4
th
Floor
New York, New York 10005
Morgan
Joseph & Co. Inc.
600 Fifth Avenue, 19
th
Floor
New York, New York 10020
Lazard
Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned senior advisor and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
2
3
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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By: |
/s/ Barry Holt |
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Barry Holt |
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Exhibit 10.28
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19 th Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
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If the Trust Fund is liquidated before completion of a Business Combination, the undersigned agrees to reimburse the Company for the Company’s Vendor Obligations. For purposes of this paragraph, “ Vendor Obligations ” shall mean the debts of the Company to vendors from whom the Company does not obtain a valid and enforceable waiver of such vendor’s rights against or claims to the Trust Fund for services rendered or products sold to the Company in excess of the net proceeds of the IPO not held in the Trust Fund at the time of its liquidation, to the extent that such debts or obligations (i) actually reduce the amount of funds in the Trust Fund that are distributable to the Company’s stockholders and (ii) are not reimbursed by any insurance procured by the Company to cover such claims made against the Trust Fund. For the avoidance of doubt, Vendor Obligations do not include (x) any debts or obligations to vendors that do not represent service fees (and related disbursements) or product purchase prices, (y) any debts or obligations to prospective target businesses if a Business Combination is not consummated with such prospective target businesses or (z) any debts or obligations owed to any entity other than a vendor.]
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IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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William Fitzgerald |
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Exhibit 10.29
December 21, 2006
Information Services Group
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Deutsche Bank Securities Inc.
60 Wall Street, 4
th
Floor
New York, New York 10005
Morgan Joseph & Co. Inc.
600 Fifth Avenue, 19
th
Floor
New York, New York 10020
Lazard Capital Markets LLC
30 Rockefeller Plaza
New York, New York 10020
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned senior advisor and holder of common stock, par value $0.001 per share (“ Common Stock ”), of Information Services Group, Inc. (the “ Company ”), in consideration of Deutsche Bank Securities Inc., Morgan Joseph & Co. Inc. and Lazard Capital Markets LLC (together, the “ Underwriters ”) agreeing to act as lead underwriters in connection with the initial public offering of the securities of the Company (“ IPO ”), hereby agrees as follows:
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IN WITNESS WHEREOF, the undersigned has executed this agreement as of the date first written above.
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OENOKE PARTNERS, LLC |
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Name: Michael Connors |
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Title: Managing Member |
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Exhibit 10.30
INFORMATION SERVICES GROUP, INC.
MANAGEMENT STOCK PURCHASE AGREEMENT
This Management Stock Purchase Agreement (this “ Agreement ”) is made as of December 21, 2006, by and between Information Services Group, Inc., a Delaware corporation (the “ Company ”), and Oenoke Partners, LLC, a Delaware limited liability company (“ Purchaser ”).
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[Signatures on following page]
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In Witness Whereof , the parties hereto have executed this Agreement as of the day and year first above written.
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Information Services Group, Inc. |
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/s/ Michael Connors |
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Michael Connors |
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Chief Executive Officer |
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Address: Four Stamford Plaza |
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725 Oenoke Ridge Road |
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New Canaan, CT 06840 |
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Oenoke Partners, LLC |
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By: |
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/s/ Michael Connors |
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Michael Connors |
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Managing Member |
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Address: Four Stamford Plaza |
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725 Oenoke Ridge Road |
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EXHIBIT 14
INFORMATION SERVICES GROUP, INC.
CODE OF ETHICS FOR DIRECTORS, OFFICERS AND EMPLOYEES
This Code of Ethics (the “ Code ”) has been adopted by the Board of Directors of the Company (the “ Board ”), to set forth the high standards of ethical business conduct expected of all officers, directors, and employees of the Company. The Code does not specify appropriate conduct for every person in every situation but is intended to assist in the identification of common and/or sensitive business situations where public trust and confidence might be compromised or a statutory or regulatory requirement violated and to set forth guidelines governing such situations.
The Code is not a contract and does not create or describe any obligations of the Company. This Code supplements but does not supplant those specific policies and procedures that may be adopted throughout the Company.
It is the responsibility of each executive officer, director and employee to become familiar with the provisions of this Code. All executive officers, directors, and employees of the Company are expected and required to act in full compliance with the Code at all times. Strict adherence to this Code is a condition of continued employment or affiliation with the Company.
1. Purpose of Code. This Code applies to officers, directors and employees of the Company for the purpose of promoting:
• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
• full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Company;
• compliance with applicable laws and governmental rules and regulations;
• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
• accountability for adherence to the Code.
Each director, officer and employee should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
2. Conflicts of Interest. All directors, officers and employees of the Company should be scrupulous in avoiding any action or interest that conflicts with, or gives the appearance of a conflict with, the Company’s interests. A “Conflict of Interest” occurs when an director, officer or employee’s private interest interferes with the interests of, or his/her
service to, the Company. A conflict situation can arise when a director, officer or employee takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest may also arise when a director, officer or employee or a member of his or her family receives improper personal benefits as a result of his or her position with the Company, whether from a third party or from the Company.
Conflicts of interest may not always be clear-cut, so if a question arises, an officer or employee should consult with higher levels of management, the board of directors or company counsel. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate personnel.
3. Corporate Opportunity. Directors, officers and employees are prohibited from (a) taking for themselves personally opportunities that properly belong to the Company or are discovered through the use of corporate property, information or position; (b) using corporate property, information or position for personal gain; and (c) subject to pre-existing fiduciary obligations, competing with the Company. Directors, officers and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.
4. Compliance with Laws, Rules and Regulations. All directors, officers and employees of the Company are expected to understand, respect and comply with all of the laws, regulations, policies and procedures that apply to them in their positions with the Company. Employees are responsible for talking to their supervisors to determine which laws, regulations and Company policies apply to their position and what training is necessary to understand and comply with them. Directors, officers and employees are directed to specific policies and procedures available to persons they supervise.
As a representative of the Company, you are expected to conduct both your business and personal affairs in accordance with the highest standards of honesty, ethics and integrity. If you have any legal or ethical questions about business you conduct for the Company, please consult the General Counsel.
5. Political Contributions. No illegal political contributions of Company funds are to be made, directly or indirectly, to any government official, political party, political party official, election committee or candidate for political office in the United States or in another country. Political contributions on behalf of the Company may be made in jurisdictions where permitted by law, but only when the Board of the Company has specifically approved them. Company associates may, of course, contribute personally to the candidates and parties of their choice, but no associate will be compensated or reimbursed for any such personal contribution.
6. Payments to Government Officials or Others. No bribes, kickbacks or other payments shall be made to or for the benefit of any government officials, customers, suppliers or others in connection with obtaining orders or favorable treatment or for any illegal
purpose. This policy extends not only to direct payments but also to indirect payments made in any form through consultants or other third parties.
7. Giving or Receiving Gifts. No associate of the Company may give, seek or accept in connection with the Company’s business any type of compensation, fees, commissions, gifts, entertainment or any other personal favor or preferment which exceeds a nominal value and goes beyond common courtesies associated with accepted business practice. This policy applies to consideration to, or from any person, including, for example, other associates, prospective associates, suppliers, customers, competitors and others with whom the Company has or is likely to have any business relationships. The Company’s General Counsel may grant waivers of this policy on a case by case basis after consideration of all facts and circumstances, except in the case of the Chief Operating Officer, Chief Financial Officer, Chief Accounting Officer or Chief Executive Officer.
8. Fair Dealing. We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. Stealing proprietary information, possessing or utilizing trade secret information that was obtained without the owner’s consent or inducing such disclosures by past or present employees of other companies is prohibited.
Each director, officer and employee is expected to deal fairly with the Company’s customers, suppliers, competitors, officers and employees. No one should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing.
9. Protection and Proper Use of the Company Assets. All directors, officers and employees should protect the Company’s assets and ensure their efficient use. All Company assets should be used only for legitimate business purposes.
10. Public Reporting. As a public company, it is of critical importance that the Company’s filings with the Securities and Exchange Commission be accurate and timely. It is our policy to make full, fair, accurate, timely and understandable public disclosure of all information relating to the Company as required by law and the SEC, or other rules and regulations, and/or business policy. In addition, it is our policy to comply with all securities and other laws that prohibit us from making “selective disclosures,” including SEC Regulation Fair Disclosure (“ Regulation FD ”). In order to ensure that all disclosures of company information, including but not limited to information relating to our financial performance, material contracts, and other information important to investors, regulators and the general public, are accurate and in full compliance with applicable laws and regulations, it is our policy that all such disclosures will be made only through specifically established channels. Depending on their position with the Company, an employee, officer or director may be called upon to provide necessary information to assure that the Company’s public reports are complete, fair and understandable. The Company expects employees, officers and directors to take this responsibility very seriously and to provide prompt accurate answers to inquiries related to the Company’s public disclosure requirements.
11. Financial Statements and Other Records. All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must both conform to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation.
Records should always be retained or destroyed according to the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, please consult the board of directors.
12. Confidentiality. Directors, officers and employees must maintain the confidentiality of confidential information entrusted to them by the Company or its suppliers or customers, except when disclosure is specifically authorized by the board of directors or required by laws, regulations or legal proceedings. Confidential information includes all non-public information that might be material to investors or of use to competitors of the Company or harmful to the Company or its customers or employees if disclosed.
13. Insider Trading. Directors, officers or employees who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business, and should refrain from trading while in possession of such information. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical but also illegal. In order to assist with compliance with laws against insider trading, the Company will adopt a specific policy governing directors, officers and employees trading in securities of the Company and distribute such policy to director, officer and employee. Any of your securities trading should be conducted in compliance with this policy. If you have any questions, please consult the Company’s General Counsel.
14. Equal Opportunity; Discrimination and Harassment. We are firmly committed, in compliance with applicable federal, state and local laws and the Company’s policies, to providing equal opportunity in all aspects of employment and we will not tolerate any illegal discrimination or harassment of any kind.
15. Waivers. A director, officer or employee may request a waiver of any of the provisions of this Code by submitting a written request for such waiver to the Audit Committee setting forth the basis for such request and explaining how the waiver would be consistent with the standards of conduct described herein. The Audit Committee shall review such request and make a determination thereon in writing which shall be binding.
In determining whether to waive any provisions of this Code, the Audit Committee shall consider whether the proposed waiver is consistent with honest and ethical conduct.
Any waivers of any provision of this Code granted to a director, officer or employee must be disclosed in an SEC Form 8-K within four days. The General Counsel shall submit an annual report to the Board regarding waivers granted.
16. Reporting Illegal or Unethical Behavior. Employees, officers and directors who suspect or know of violations of this Code or illegal or unethical business or workplace conduct by employees, officers or directors have an obligation to contact either their supervisor or superiors. If the individuals to whom such information is conveyed are not responsive, or if there is reason to believe that reporting to such individuals is inappropriate in particular cases, then the employee, officer or director may contact the General Counsel. Such communications will be kept confidential to the extent feasible. If the employee is still not satisfied with the response, the employee may contact the chairman of the board of directors or any of the Company’s outside directors.
17. Non-Retaliation. The Company prohibits retaliation of any kind against individuals who have made good faith reports or complaints of violations of this Code or other known or suspected illegal or unethical conduct.
18. Disciplinary Measures. Violations of this Code or other policies, or of applicable laws, rules and regulations, may result in disciplinary measures against the violator. Such measures, depending on the nature and severity of the violation, whether the violation was a single or repeated occurrence, and whether the violation appears to have been intentional or inadvertent, may include written notices to the individual involved, censure by the Board, demotion or re-assignment, suspension with or without pay or benefits and termination of employment. In addition, violations of legal and regulatory requirements may carry their own civil and criminal penalties, including fines and imprisonment.
19. Other Policies and Procedures. This Code shall be the sole code of ethics adopted by the Company for purposes of Rule 807 of the American Stock Exchange Company Guide and Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to it thereunder. Insofar as other policies or procedures of the Company govern or purport to govern the behavior or activities of the Directors, officers and employees who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code.
20. Amendments. Any amendments to this Code must be approved or ratified by a majority vote of the Company’s Board, including a majority of independent directors.
21. Internal Use. The Code is intended solely for the use by the Company and does not constitute an admission, by or on behalf of any person, as to any fact, circumstance, or legal conclusion.
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Approved by the Board of Directors: |
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December 21, 2006 |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form S-1, Amendment 3, of our report dated December 19, 2006, except for Note H, which is as of December 21, 2006, relating to the financial statements of Information Services Group, Inc., and to the reference to our Firm under the caption "Experts" in the Prospectus.
| /s/ Rothstein, Kass & Company, P.C. |
Roseland, New Jersey
December 21, 2006
EXHIBIT 99.1
AUDIT COMMITTEE CHARTER
of the Audit Committee
of INFORMATION SERVICES GROUP, INC.
This Audit Committee Charter (the “ Charter ”) was adopted by the Board of Directors (the “ Board ”) of Information Services Group, Inc. (the “ Company ”) by unanimous written consent on December , 2006.
The purpose of the Audit Committee (the “ Committee ”) is to assist the Board with its oversight responsibilities regarding: (i) the integrity of the Company’s financial statements; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the independent auditor’s qualifications and independence; and (iv) the performance of the Company’s internal audit function and independent auditor. The Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the “ SEC ”) and the American Stock Exchange (“ Amex ”) to be included in the Company’s annual proxy statement.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion.
The Committee’s responsibility is limited to oversight. Although the Committee has the responsibilities set forth in this Charter, it is not the responsibility of the Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosure are complete and accurate and are in accordance with generally accepted accounting principles and applicable laws, rules and regulations. These are the responsibilities of management, the internal auditor (or others responsible for the internal audit function, including contracted non-employee or audit or accounting firms engaged to provide internal audit services) (the “ Internal Auditor ”) and the independent auditor.
Further, auditing literature, particularly Statement of Accounting Standards No. 71, defines the term “review” to include a particular set of required procedures to be undertaken by independent auditors. The members of the Committee are not independent auditors, and the term “review” as used in this Charter is not intended to have that meaning and should not be interpreted to suggest that the Committee members can or should follow the procedures required of auditors performing reviews of financial statements.
The Committee shall consist of no fewer than three directors, as determined by the Board. Each Committee member shall be financially literate as determined by the Board in its business judgment or must become financially literate within a reasonable period of time after his or her appointment to the Committee. Members of the Committee are not required to be engaged in the accounting and auditing profession and, consequently, some members may not be expert in financial matters, or in matters involving auditing or accounting. However, at least one member of the Committee shall have accounting or related financial management expertise as determined by the Board in its business judgment. In addition, either at least one member of the Committee shall be an “audit committee financial expert” within the definition adopted by the SEC or the Company shall disclose in its periodic reports required pursuant to the Securities Exchange Act of 1934 (the “ Exchange Act ”) the reasons why at least one member of the Committee is not an “audit committee financial expert.”
Each Committee member shall satisfy the independence requirements of Amex and Exchange Act Rule 10A-3(b)(1). The members of the Committee, including the Chairman of the Committee, shall be appointed by the Board on the recommendation of the Nominating Committee. Committee members may be removed from the Committee, with or without cause, by the Board.
The Chairman (or in his or her absence, a member designated by the Chairman) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s certificate of incorporation or bylaws that are applicable to the Committee.
The Committee shall meet at least once during each fiscal quarter and more frequently as the Committee deems necessary or desirable. The Committee shall meet separately, periodically, with management, with the Internal Auditor and with the independent auditor.
All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the independent auditor, the Internal Auditor, any other financial personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may exclude from its meetings any persons it deems appropriate, including, but not limited to, any non-management director that is not a member of the Committee.
The Committee may retain any independent counsel, experts or advisors (accounting, financial or otherwise) that the Committee believes to be necessary, desirable or appropriate. The Committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by
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the Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services, for payment of compensation to any advisors employed by the Committee and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Committee may conduct or authorize investigations into any matters within the scope of the powers and responsibilities delegated to the Committee.
Interaction with the Independent Auditor
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Quarterly Financial Statements
Internal Audit
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Other Powers and Responsibilities
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This Charter shall be made available on the Company’s website at “www. informationsg.com” and to any stockholder who otherwise requests a copy. The Company’s Annual Report to Stockholders shall state the foregoing.
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EXHIBIT 99.2
NOMINATING COMMITTEE CHARTER
of the Nominating Committee
of INFORMATION SERVICES GROUP, INC.
This Nominating Committee Charter (the “ Charter ”) was adopted by the Board of Directors (the “ Board ”) of Information Services Group, Inc. (the “ Company ”) by unanimous written consent as of December [ ], 2006.
The purpose of the Nominating Committee (the “ Committee ”) is to assist the Board with its oversight responsibilities regarding: (i) the identification of qualified candidates to become Board members; (ii) the selection of nominees for election as directors at the next annual meeting of stockholders (or special meeting of stockholders at which directors are to be elected); (iii) the selection of candidates to fill any vacancies on the Board; and (iv) the development and recommendation to the Board of a set of corporate governance guidelines and principles applicable to the Company (the “ Corporate Governance Guidelines ”).
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s certificate of incorporation or bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion.
The Committee shall be comprised of two or more directors, as determined by the Board, each of whom (a) satisfies the independence requirements of the American Stock Exchange (“ Amex ”), and (b) has experience, in the business judgment of the Board, that would be helpful in addressing the matters delegated to the Committee.
The members of the Committee, including the Chairman of the Committee, shall be appointed by the Board. Committee members may be removed from the Committee, with or without cause, by the Board.
The Chairman (or in his or her absence, a member designated by the Chairman) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s certificate of incorporation or bylaws that are applicable to the Committee.
The Committee shall meet on a regularly scheduled basis at least two times per year and more frequently as the Committee deems necessary or desirable.
All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management or any other person whose presence the Committee believes to be desirable and appropriate. Notwithstanding the foregoing, the Committee may exclude from its meetings any person it deems appropriate, including, but not limited to, any non-management director that is not a member of the Committee.
The Chairman shall report to the Board regarding the activities of the Committee at appropriate times and as otherwise requested by the Chairman of the Board.
The Committee may conduct or authorize investigations into any matters within the scope of the powers and responsibilities delegated to the Committee.
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The Committee may delegate the authority granted hereunder, subject to applicable limitations under applicable law. Such delegation may include delegation to a subcommittee, in order to ensure compliance with legal and regulatory obligations, to ensure timely decision making or for other purposes. Such delegation may also include delegation to management.
This Charter shall be made available on the Company’s website at “www.informationsg.com” and to any stockholder who otherwise requests a copy. The Company’s Annual Report to Stockholders shall state the foregoing.
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EXHIBIT 99.3
COMPENSATION COMMITTEE CHARTER
of the Compensation Committee
of INFORMATION SERVICES GROUP, INC.
This Compensation Committee Charter (the “ Charter ”) was adopted by the Board of Directors (the “ Board ”) of Information Services Group, Inc. (the “ Company ”) by unanimous written consent on December [ ], 2006.
The purpose of the Compensation Committee (the “ Committee ”) is to assist the Board with its oversight responsibilities regarding: (i) to discharge the Board’s responsibilities relating to compensation of the Company’s executives, including by designing (in consultation with management and the Board, as appropriate), recommending to the Board for approval and evaluating the compensation plans, policies and programs of the Company and (ii) to produce or review any annual report or disclosures with respect to executive compensation required to be included in the Company’s proxy materials in accordance with applicable rules and regulations of the Securities and Exchange Commission (“ SEC ”). The Committee shall attempt to establish compensation programs that are designed to encourage high performance and accountability and promote the alignment of employee interests with the interests of the Company’s stockholders.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion.
The Committee shall be comprised of two or more directors, as determined by the Board, each of whom (1) satisfies the independence requirements of the American Stock Exchange rules, (2) is a “non-employee director” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ), and (3) is an “outside director” under the regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”).
The members of the Committee, including the Chair of the Committee, shall be appointed by the Board on the recommendation of the Nominating Committee. Committee members may be removed from the Committee, with or without cause, by the Board.
The Chairman (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s certificate of incorporation or bylaws that are applicable to the Committee.
The Committee shall meet on a regularly scheduled basis at least two times per year and more frequently as the Committee deems necessary or desirable.
All non-management directors that are not members of the Committee may attend and observe meetings of the Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Committee, and in any event shall not be entitled to vote. The Committee may, at its discretion, include in its meetings members of the Company’s management, representatives of the independent auditor, the internal auditor, any other financial personnel employed or retained by the Company or any other persons whose presence the Committee believes to be necessary or appropriate. Notwithstanding the foregoing, the Committee may also exclude from its meetings any persons it deems appropriate, including but not limited to, any non-management director that is not a member of the Committee.
The Committee shall have the sole authority, as it deems appropriate, to retain and/or replace, as needed, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the Committee believes to be necessary, desirable or appropriate. The Committee may also utilize the services of the Company’s regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any such persons retained by the Committee and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Chairman shall report to the Board following meetings of the Committee and as otherwise requested by the Chairman of the Board.
The Committee may conduct or authorize investigations into any matters within the scope of the powers and responsibilities delegated to the Committee.
All plan reviews should include reviewing the plan’s administrative costs, reviewing current plan features relative to any proposed new features, and assessing the performance of the plan’s internal and external administrators if any duties have been delegated.
In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee, to the extent consistent with the Company’s certificate of incorporation, bylaws, Corporate Governance Guidelines and applicable law and rules of markets in which the Company’s securities then trade, except that it shall not delegate its responsibilities set forth in paragraphs 3 and 5 of Section IV above or for any matters that involve executive compensation or any matters where it has determined such compensation is intended to comply with Section 162(m) of the Code or is intended to be exempt from Section 16(b) under the Exchange Act pursuant to Rule 16b-3 by virtue of being approved by a committee of “outside directors.”
This Charter shall be made available on the Company’s website at www.informationsg.com and to any stockholder who otherwise requests a copy. The Company’s Annual Report to Stockholders shall state the foregoing.