UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): October 12, 2007
FMG
ACQUISITION CORP.
(Exact
name of registrant as specified in its charter)
Delaware
|
000-52833
|
75-3241964
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
Four
Forest Park, Second Floor
Farmington,
CT
|
06032
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code:
(860)
697-2701
Not
Applicable
(Former
name or former address, if changed since last report)
o
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
o
Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o
Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01.
Entry
into a Material Definitive Agreement.
On
October 11, 2007, FMG Acquisition Corp. (the “Company”) consummated the initial
public offering (the “IPO”) of 4,733,625 units (the “IPO Units”) (representing
4,500,000 IPO Units and an additional 233,625 IPO Units subject to the
underwriters’ exercise of its over-allotment option, the balance of which option
will not be exercised), each unit (the “Unit”) consisting of one share of common
stock, par value $0.0001 per share (the “Common Stock”), and one warrant (the
“Warrant”) to purchase one share of Common Stock, pursuant to the registration
statement on Form S-1 (File No. 333-143466) (the “Registration Statement”). In
connection with the IPO, the Company entered into various written agreements,
including an underwriting agreement, investment management trust agreement,
securities escrow agreement, registration rights agreement, warrant agreement
and subordinated revolving line of credit agreement. The purpose of this Current
Report on Form 8-K is to file such agreements, as executed in connection with
the IPO.
Underwriting
Agreement
On
October 4, 2007, the Company entered into an underwriting agreement (the
“Underwriting Agreement”) relating to the sale of the IPO Units. A copy of the
Underwriting Agreement, entered into by and between the Company and Pali Capital
Inc. (“Pali”), as representative of the underwriters (collectively, the
“Underwriters”), is attached as Exhibit 10.1 hereto and is incorporated by
reference herein.
Pursuant
to the terms of the Underwriting Agreement, the sale of the IPO Units occurred
on October 11, 2007 at a purchase price of $7.44 (the offering price to the
public of $8.00 per Unit minus the underwriters’ discount of $0.32 per Unit and
deferred underwriters’ discount of $0.24 per Unit). A portion of the proceeds of
the IPO and the Private Placement (as defined below) were placed into the Trust
Account (as defined below) and shall be released to the Company upon the
consummation of a business combination (as described in the Registration
Statement, the “Business Combination”).
The
Underwriting Agreement provided for an underwriters’ discount in an amount equal
to 7% of the gross proceeds of the IPO. The Underwriters agreed that a portion
of the underwriters’ discount would be deposited into the Trust Account and
payable to the Underwriters upon the consummation of the Business Combination
and then only with respect to those Units as to which the component Common
Stock
have not been redeemed in connection with the Business Combination.
The
Company also granted the Underwriters a 45-day option to purchase up to an
additional 675,000 Units from the Company on the same terms and at the same
price as the 4,500,000 Units to cover over-allotments, if any. On October 10,
2007, the Underwriters exercised 233,625 Units subject to this over-allotment
option, and the balance of this over-allotment option will not be exercised.
The
Company has also sold to Pali and / or its designees for $100 an option (the
“Pali Option”) to purchase up to 450,000 Units at an exercise price of $10.00
per Unit. A copy of the Pali Option is attached as Exhibit 4.2 hereto and is
incorporated by reference herein. The Units issuable upon exercise of the Option
are identical to the IPO Units. The Pali Option is exercisable commencing on
the
later of the consummation of a Business Combination or one year from the
effective date (the “Effective Date”) of the IPO. The Pali Option contains
certain transfer restrictions and anti-dilution provisions. In addition, the
holder of the Pali Option is entitled to demand and “piggyback” registration
rights for periods of five and seven years, respectively, from the Effective
Date.
In
accordance with the Underwriting Agreement, FMG Investors LLC (the “Private
Placement Investor”) agreed to purchase from the Company an aggregate of
1,250,000 warrants (the “Private Placement Warrants”) at a purchase price of
$1.00 per Private Placement Warrant in a private placement (the “Private
Placement”) pursuant to Regulation D of the Securities Act of 1933, as amended
(the “Securities Act”). Such Private Placement was consummated (pursuant to a
subscription agreement) immediately prior to the Effective Date of the IPO.
The
Warrants underlying the Units are exercisable for the period commencing on
the
later of the completion of a Business Combination or October 4, 2008 and
terminating on October 4, 2011. The Company may redeem the outstanding Warrants
(including any warrants issued upon exercise of the Pali Option), in whole
and
not in part, at a price of $0.01 per Warrant at any time after the Warrants
become exercisable upon a minimum of 30 days’ prior written notice and if and
only if the last closing sales price of the Common Stock equals or exceeds
$11.50 per share for any 20 trading days within a 30-day trading period ending
three business days before the Company sends notice of redemption. The Private
Placement Warrants may not be redeemed by the Company and may be exercised
on a
cashless basis so long as they are held by the initial holders thereof or their
permitted transferee.
The
Underwriting Agreement also includes certain customary representations,
warranties and covenants by the Company. It also provides that the Company
will
indemnify the Underwriters against certain liabilities, including liabilities
under the Securities Act, or contribute to payments the Underwriters may be
required to make because of any of those liabilities.
Investment
Management Trust Agreement
On
October 4, 2007, the Company entered into an investment management trust
agreement (the “Investment Management Trust Agreement”) with Continental Stock
Transfer & Trust Company (“CST”) as trustee. A copy of the Investment
Management Trust Agreement is attached as Exhibit 10.2 hereto and is
incorporated by reference herein.
Pursuant
to the Investment Management Trust Agreement, a portion of the proceeds from
the
IPO and the Private Placement will be placed into a trust account (the “Trust
Account”) at Deutsche Bank Trust Company Americas and maintained by CST as
trustee. Of this amount, $1,440,000 represents the deferred underwriters’
discount, which amount shall be payable to the Underwriters upon the
consummation of a Business Combination. The funds in the Trust Account will
not
be released until the earlier of the consummation of a Business Combination
or
the Company’s dissolution and liquidation; provided, however, the Company shall
be permitted to draw the following amounts from the interest income earned
on
the Trust Account: (i) taxes payable on the interest income and franchise taxes
and (ii) up to $1,200,000 to fund the Company’s working capital requirements.
Holders
of the Common Stock underlying the Units (the “Public Stockholders”) shall be
entitled to receive funds from the Trust Account (including interest earned
on
such Public Stockholder’s pro rata portion of the Trust Account) in the event
the Company dissolves and liquidates. Furthermore, Public Stockholders seeking
to redeem their shares of Common Stock in connection with a Business Combination
shall be entitled to receive $7.84 per share plus a pro rata portion of the
interest income earned on the Trust Account (net of taxes payable and any
interest income distributed to the Company). In the event a Business Combination
is consummated, all sums remaining in the Trust Account shall be released to
the
Company and there will be no restriction on the Company’s use of such
funds.
Securities
Escrow Agreement
On
October 4, 2007, the Company entered into a securities escrow agreement (the
“Securities Escrow Agreement”) with each of the initial stockholders and warrant
holder (the “Initial Holders”) of the Company and CST as escrow agent. A copy of
the Securities Escrow Agreement is attached as Exhibit 10.3 hereto and is
incorporated by reference herein.
Pursuant
to the Securities Escrow Agreement, the Initial Holders placed the shares of
Common Stock it owned prior to the IPO (the “Insider Shares”) and Warrants it
owned prior to the IPO (“Insider Warrants”) into an escrow account maintained by
CST. Subject to limited exceptions, the Insider Shares and Insider Warrants
shall not be transferable for certain respective periods (the “Escrow Period”).
For the Insider Shares, the applicable Escrow Period will expire one year after
the Company’s consummation of the initial Business Combination unless the
Company consummates a transaction after the consummation of the initial Business
Combination resulting in all of the stockholders of the Company having the
right
to exchange their shares of Common Stock for cash, securities or other property,
and for the Insider Warrants, the applicable Escrow Period will expire on the
90
th
day
following the Company’s consummation of the initial Business Combination,.
During the Escrow Period, the initial stockholders shall retain all other rights
as stockholders, including, without limitation, the right to vote their Common
Stock and the right to receive cash dividends. In the event the Company declares
a stock dividend, such dividend will be placed into escrow, as well. In the
event the Company dissolves and liquidates, the Insider Shares and Insider
Warrants will be cancelled.
Registration
Rights Agreement
On
October 4, 2007, the Company entered into a registration rights agreement (the
“Registration Rights Agreement”) with the Initial Stockholders and the Private
Placement Investor. A copy of the Registration Rights Agreement is attached
as
Exhibit 10.4 hereto and is incorporated by reference herein.
Pursuant
to the Registration Rights Agreement, a majority-in-interest of the Initial
Stockholders shall be entitled to require the Company, on up to two occasions
at
any time after the date on which the Insider Shares are released from escrow
pursuant to the Securities Escrow Agreement, to register the Insider Shares.
In
addition, the Initial Stockholders shall have “piggyback” registration rights
with respect to the Insider Shares commencing on the date on which the Insider
Shares are released from escrow pursuant to the Securities Escrow Agreement.
Furthermore, the Private Placement Investor shall be entitled to require the
Company, on up to two occasions at any time after the date on which the Insider
Warrants are released from escrow pursuant to the Securities Escrow Agreement,
to register the Insider Warrants. In addition, the Private Placement Investor
shall have “piggyback” registration rights with respect to the Insider Warrants
commencing on the date on which the Insider Warrants are released from escrow
pursuant to the Securities Escrow Agreement. The Company shall bear the expenses
incurred in connection with the filing of any such registration statements.
Warrant
Agreement
On
October 4, 2007, the Company entered into a warrant agreement (the “Warrant
Agreement”) with CST pursuant to which CST shall act as warrant agent in
connection with the issuance, registration, transfer, exchange, redemption
and
exercise of the Warrants underlying the IPO Units (the “Public Warrants”) , the
Warrants underlying the Pali Option (the “Pali Warrants”) and the Private
Placement Warrants (collectively with the Public Warrants and the Pali Warrants,
the “Company Warrants”). A copy of the Warrant Agreement is attached as Exhibit
4.1 hereto and is incorporated by reference herein.
The
Warrant Agreement provides for, among other things, the form and provisions
of
the Company Warrants and the manner in which the Company Warrants may be
exercised. The Warrant Agreement also contains certain transfer restrictions
and
anti-dilution provisions, the manner in which the Company Warrants may be
redeemed and the registration rights related to the Representative’s Warrants
and the Private Placement Warrants.
Subordinated
Revolving Line of Credit Agreement
On
October 4, 2007, the Company entered into a subordinated revolving line of
credit agreement with FMG Investors LLC (“FMG Investors”), an initial
stockholder of the Company. FMG Investors provided the Company with a limited
recourse revolving line of credit under which the Company may borrow and have
outstanding up to $250,000 at any time. This revolving line of credit will
terminate upon the earlier of the Company’s consummation of the initial Business
Combination, or the Company’s dissolution
,
and
may
be used
to
pay
costs, expenses and claims in connection with the Company’s dissolution. The
revolving line of credit will not bear interest nor allow FMG Investors to
recover any outstanding monies from the trust account. The funds in the trust
account will be distributed to the public stockholders if the Company does
not
consummate the initial Business Combination within the requisite time period.
The Company may use a portion of these borrowed funds to make a deposit, down
payment or fund a “no-shop” provision with respect to a particular proposed
business combination. A copy of the Subordinated Revolving Line of Credit
Agreement is attached as Exhibit 10.5 hereto and is incorporated by reference
herein.
Item
9.01.
Financial
Statements and Exhibits.
(c)
Exhibits
4.1
|
Warrant
Agreement, dated October 4, 2007, by and between FMG Acquisition
Corp. and
Continental Stock Transfer & Trust
Company
|
4.2
|
Form
of Unit Purchase Option
|
10.1
|
Underwriting
Agreement, dated October 4, 2007, by and between FMG Acquisition
Corp. and
Pali Capital Inc., as representative of the
underwriters
|
10.2
|
Investment
Management Trust Agreement, dated October 4, 2007, by and between
FMG
Acquisition Corp. and Continental Stock Transfer & Trust
Company
|
10.3
|
Securities
Escrow Agreement, dated October 4, 2007, by and among FMG Acquisition
Corp., the initial stockholders (including the initial warrant holder)
named therein and Continental Stock Transfer & Trust
Company
|
10.4
|
Registration
Rights Agreement, dated October 4, 2007, by and among FMG Acquisition
Corp. and the investors named
therein
|
10.5
|
Subordinated
Revolving Line of Credit Agreement, dated October 4, by and among
FMG
Investors LLC and FMG Acquisition
Corp.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
|
|
FMG
ACQUISITION CORP.
|
|
|
|
Dated:
October 11, 2007
|
By:
|
/s/
Gordon G.
Pratt
|
|
Name: Gordon G. Pratt
|
|
Title:
Chairman, President and Chief Executive
Officer
|
Exhibit
4.1
WARRANT
AGREEMENT
This
Warrant Agreement (this “Agreement”) is made as of October 4, 2007, by and
between FMG Acquisition Corp., a Delaware corporation having its principal
place
of business at Four Forest Park, Farmington, CT 06032 (“Company”) and
Continental Stock Transfer & Trust Company, a New York corporation with
offices at 17 Battery Place, New York, New York 10004 (the “Warrant
Agent”).
WHEREAS,
the Company is engaged in a public offering (the “Public Offering”) of Units
(“Units”) and, in connection therewith, has determined to issue and deliver up
to (i) 5,175,000 Warrants (the “Public Warrants”) to the public investors, each
of such Public Warrants evidencing the right of the holder thereof to purchase
one share of common stock, par value $.0001 per share, of the Company’s Common
Stock (“Common Stock”) for $6.00, subject to adjustment as described herein and
(ii) 450,000 Warrants to Pali Capital, Inc. (“Pali”) as representative of the
underwriters (the “Underwriters”) or its designees (the “Underwriter’s
Warrants”), with each of such Underwriter’s Warrants evidencing the right of the
holder thereof to purchase one share of Common Stock for $6.00, subject to
adjustment as described herein;
WHEREAS,
immediately prior to the completion of the Public Offering, the Company shall
sell and issue 1,250,000 Warrants in a private placement (the “Private
Warrants”) pursuant to that certain Subscription Agreement dated May 22, 2007
(the “Subscription Agreement”), each of such Private Warrants evidencing the
right of the holder thereof (the “Initial Purchaser”) to purchase one share of
Common Stock (the Public Warrants, the Underwriter’s Warrants and the Private
Warrants are collectively referred to herein as the “Warrants”);
WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “SEC”) a
Registration Statement, No. 333-143466 on Form S-1 (“Registration
Statement”) for the registration under the Securities Act of 1933, as amended
(“Act”) of, among other securities, the Public Warrants, the Underwriter’s
Warrants and the Common Stock issuable upon exercise of each of the Public
Warrants and the Underwriter’s 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
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 Agreement.
2.
Warrants
.
2.1
Form
of Warrant
.
Each
Warrant shall be issued in registered form only. The Public Warrants and the
Underwriter’s Warrants shall be in substantially the form of
Exhibit
A
hereto
and the Private Warrants shall be in substantially the form of
Exhibit
B
hereto,
the provisions of each of which are incorporated herein, and shall be signed
by,
or bear the facsimile signature of, the Chief Executive Officer or President
and
Chief Financial Officer, Treasurer, Secretary or Assistant Secretary of the
Company and shall bear a facsimile of the Company’s seal. 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.
2.2
Effect
of Countersignature
.
Unless
and until countersigned by the Warrant Agent pursuant to this 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, 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
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.
2.4
Detachability
of Public Warrants
.
The
securities comprising the Units will begin to trade separately on the 90th
trading day after the effective date of the Registration Statement unless Pali
informs the Company of its decision to allow earlier trading (the “Detachment
Date”), provided that in no event will Pali allow the separate trading of the
securities comprising the Units until (i) the Company files with the SEC 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 sale of the Private
Warrants and 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, (ii)
the
Company issues a press release and files with the SEC a Current Report on Form
8-K announcing when such separate trading will begin, and (iii) the date on
which separate trading begins is a business day following the earlier to occur
of the exercise of the Underwriters’ over-allotment option or its exercise in
full (as described more fully in the Registration Statement).
3.
Terms
and Exercise of Warrants
.
3.1
Warrant
Price
.
Each
Warrant shall, when countersigned by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Warrant and this Warrant
Agreement, to purchase from the Company the number of shares of Common Stock
stated therein, at the price of $6.00 per whole share, subject to the
adjustments provided in this Section 3.1 and 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 for a period of not less than ten business days, provided that
any such reduction shall be identical among all of the Warrants.
3.2
Duration
of Warrants
.
3.2.1
Public
Warrants and Underwriter’s Warrants
.
A
Public Warrant or Underwriter’s Warrant may be exercised only during the period
commencing on the later of: (i) the consummation by the Company of a merger,
capital stock exchange, asset acquisition or other similar business combination
(as described more fully in the Registration Statement, “Business Combination”),
or (ii) October 4, 2008, and terminating at 5:00 p.m., New York City time on
the
earlier to occur of (x) October 4, 2011 or (y) the date fixed for redemption
of
the Warrants as provided in Section 6 of this Agreement. Notwithstanding the
foregoing, no Public Warrant or Underwriter’s Warrant shall be exercisable
unless, at the time of exercise, a registration statement relating to the Common
Stock issuable upon the exercise of such Public Warrant or Underwriter’s Warrant
is effective and current and a prospectus is available for use by the holders
thereof and the Common Stock has been qualified or deemed to be exempt under
the
securities laws of the state of residence of the holder of such Public Warrants
or Underwriter’s Warrants.
3.2.2
Private
Warrants
.
A
Private Warrant may be exercised only during the period following consummation
of a Business Combination by the Company and terminating at 5:00 p.m., New
York
City time on the earlier to occur of (x) October 4, 2011 or (y) the date fixed
for redemption of the Warrants as provided in Section 6 of this Agreement.
The
Private Warrants are not subject to redemption so long as they are held by
their
initial purchasers or their permitted designees. The Private Warrants may not
be
sold, assigned or transferred prior to the 90
th
day
following consummation of a Business Combination
3.2.3
General
.
The
period during which a Warrant may be exercised shall be deemed the “Exercise
Period” and the termination of such Exercise Period shall be deemed the
“Expiration Date”. Except with respect to the right to receive the Redemption
Price (as set forth in Section 6 hereunder), 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 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,
the Company will provide notice to registered holders of the Warrants of such
extension of not less than 20 days and, further provided that any such extension
shall be identical in duration among all of the Warrants.
3.3
Exercise
of Warrants
.
3.3.1
Payment
.
Subject
to the provisions of the Warrants and 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 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,
the
Warrant Price for each full 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 or, if the Warrants have been called for
redemption, the Company will have the option to require any holder that wishes
to exercise such Warrants to do so by surrendering his or her Warrant 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 Warrant,
multiplied by the difference between the Warrant Price and the “Fair Market
Value” (defined below) 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 third business day prior to the date on which notice
of redemption is sent to holders of the Warrant pursuant to Section 6 hereof.
3.3.2
Exercise
of Private Warrant
.
Notwithstanding anything contained herein to the contrary, the Private Warrant
may, at any time, provided that at the time of exercise they are held by the
original purchaser thereof or its permitted assigns, be exercised by
surrendering such Private Warrant 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 Warrant, multiplied by the difference
between the Warrant Price and the “FMV” (defined below) by (y) the FMV. The
“FMV” shall mean the average reported last sale price of the Common Stock for
the 10 trading days ending on the third business day prior to the date on which
notice of exercise is received by the Company.
3.3.3
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, she or it 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: (i) a registration statement
under
the Act with respect to the Common Stock issuable upon such exercise is
effective or (ii) in the opinion of counsel to the Company, the exercise of
the
Warrants is exempt from the registration requirements of the Act and such
securities are qualified for sale or exempt from qualification under applicable
securities laws of the states or other jurisdictions in which the registered
holders reside. Warrants may not be exercised by, or securities issued to,
any
registered holder in any state in which such exercise or issuance would be
unlawful. In no event will the Company be required to provide the registered
holder of a warrant with a net-cash settlement or other consideration in lieu
of
physical settlement in shares of Common Stock, regardless of whether the Common
Stock underlying the Warrants is registered pursuant to an effective
registration statement. Accordingly, the Warrants may expire unexercised and
worthless if a current registration statement covering the Common Stock is
not
effective.
3.3.4
Valid
Issuance
.
All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued, fully paid and
nonassessable.
3.3.5
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
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.
4.2
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 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 on
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
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.
4.8
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 same Warrant
Price and the same number of shares as is stated in the Warrants initially
issued pursuant to this 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 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, in the event a Warrant surrendered for transfer
bears a restrictive legend, the Warrant Agent shall not cancel such Warrant
and
issue new Warrants in exchange therefor until the Warrant Agent has received
an
opinion of counsel for the Company stating 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 deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions of this Section 5, and 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.
5.7
Private
Warrants
.
Notwithstanding anything herein to the contrary, the Warrant Agent shall not
register for transfer any Private Warrants until the 90th day after the
consummation of a Business Combination, except for (a) transfers of Private
Warrants resulting from the death of any of the holders thereof, (b) transfers
by operation of law, (c) any transfer for estate planning purposes to persons
immediately related to the transferor by blood, marriage or adoption, or (d)
transfers to any trust solely for the benefit of such transferor and/or the
persons described in the preceding clause, on condition that prior to such
registration for transfer, the Warrant Agent shall be presented with written
documentation pursuant to which each permitted transferee or the trustee or
legal guardian for each permitted transferee agrees to be bound by the terms
of
the Subscription Agreement.
6.
Redemption
.
6.1
Redemption
.
Not
less than all of the outstanding Public Warrants and the Underwriter’s 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 6.3, at the price of $.01 per Warrant
(“Redemption Price”), provided that the last sales price of the Common Stock has
been equal to or greater than $11.50 per share, on each of twenty (20) trading
days within any thirty (30) trading day period ending on the third business
day
prior to the date on which notice of redemption is given. Notwithstanding the
foregoing, the Registration Statement must be current in order for the Company
to exercise its redemption rights pursuant to this Section 6. The provisions
of
this Section 6.1 may not be modified, amended or deleted without the prior
written consent of Pali. The Private Warrants are not subject to this Section
6
provided they are held by the initial purchasers thereof, or their permitted
designees.
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 Warrant Register.
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
.
The
Company understands 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 are met,
including the opportunity of the Warrant holder to exercise prior to redemption
pursuant to Section 6.3. The provisions of this Section 6.4 may not be modified,
amended or deleted without the prior written consent of Pali.
6.5
Exclusion
of Private Warrants
.
The
Company understands that the redemption rights provided for by this Section
6 do
not apply to the Private Warrants if at the time of redemption such warrants
continue to be held by the Initial Purchaser or its permitted assigns. However,
once such Private Warrants are transferred other than to any permitted assign,
the Company may redeem the Private Warrants, provided that the criteria for
redemption are met, including the opportunity of the Warrant holder to exercise
prior to redemption pursuant to Section 6.3.
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.
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 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 SEC a post-effective amendment to the Registration Statement,
or a
new registration statement, for the registration, under the Act, of the Common
Stock issuable upon exercise of the Warrants, and it shall 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 best efforts to cause the
same to become effective on or prior to the commencement of the Exercise Period
and to use its best efforts to maintain the effectiveness of such registration
statement until the expiration of the Warrants in accordance with the provisions
of this Warrant Agreement; provided, however, the Company shall not be obligated
to deliver Common Stock and shall not have penalties for failure to deliver
Common Stock if a registration statement is not effective at the time of
exercise by the holder. In addition, the Company agrees to use its reasonable
efforts to register such securities under the blue sky laws of the states of
residence of the exercising warrant holders to the extent an exemption is not
available. The provisions of this Section 7.4 may not be modified, amended
or
deleted without the prior written consent of Pali. Notwithstanding the
foregoing, a Warrant can expire unexercised regardless of whether a registration
statement is current under the Act with respect to the Common Stock issuable
upon exercise of the Warrants. In no event will the registered holder of a
warrant be entitled to receive a net-cash settlement or shares of Common Stock
or other consideration as of result of the Company's non-compliance with 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 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. 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 as set forth on
Exhibit C
hereto,
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
established by a statement signed by the Chief Executive Officer or Chief
Operating 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 or other communication required or which may be given hereunder shall
be
in writing and either be delivered personally or by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or,
if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two business days after the date of
mailing, as follows:
FMG
Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, Chief Executive Officer and President
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 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:
Frank DiPaolo
with
a
copy in each case to:
Kramer
Levin Naftalis & Frankel LLP
1177
Avenue of the Americas
New
York,
New York 10036
Attn:
Christopher S. Auguste, Esq.
and
Ellenoff
Grossman & Schole LLP
370
Lexington Avenue
New
York,
New York 10017
Attn:
Douglas Ellenoff, Esq.
and
Pali
Capital, Inc.
650
Fifth
Avenue, 6
th
floor
New
York,
New York 10019
Attn:
R.
Michael Powell, Managing Director
9.3
Applicable
law
.
The
validity, interpretation, and performance of this Warrant Agreement and of
the
Warrants shall be governed in all respects by 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 Warrant 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 hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any such
process or summons to be served upon the Company may be served by transmitting
a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon
the
Company in any action, proceeding or claim.
9.4
Persons
Having Rights under this Warrant Agreement
.
Nothing
in this Warrant 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 and, for the purposes of Sections 6.1, 6.4,
7.4, 9.2 and 9.8 hereof, Pali, any right, remedy, or claim under or by reason
of
this Warrant Agreement or of any covenant, condition, stipulation, promise,
or
agreement hereof. Pali shall be deemed to be a third-party beneficiary of this
Warrant Agreement with respect to Sections 6.1, 6.4, 7.4, 9.2 and 9.8 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 Pali with respect to the Sections 6.1, 6.4, 7.4, 9.2 and
9.8
hereof) and their successors and assigns and of the registered holders of the
Warrants.
9.5
Examination
of the Warrant Agreement
.
A copy
of this 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.
9.6
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.
9.7
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.
9.8
Amendments
.
This
Warrant Agreement may be amended by the parties hereto without the consent
of
any registered holder for the purpose of curing any ambiguity, or of 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 Warrant 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 Pali and the registered holders of a majority of
the
then outstanding Warrants. 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, respectively, without such consent.
9.9
Severability
.
This
Warrant 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 Warrant 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
Warrant Agreement a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and
enforceable.
[remainder
of document continued on next page]
IN
WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties
hereto as of the day and year first above written.
Attest:
|
|
|
FMG
ACQUISITION CORP.
|
|
|
|
|
|
|
|
|
By:
|
/s/
Gordon Pratt
|
|
|
|
|
Gordon
Pratt
|
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
Attest:
|
/s/
John W. Comer
|
|
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
|
|
|
|
|
|
|
|
By:
|
/s/
Gregory P. Denman
|
|
|
|
Name:
|
Gregory
P. Denman
|
|
|
|
Title:
|
Vice
President
|
Exhibit
4.2
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 ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) PALI CAPITAL, INC. ("PALI"), OR AN UNDERWRITER OR A SELECTED DEALER
IN
CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF PALI
OR
OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS
PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION BY
FMG
ACQUISITION CORP. ("COMPANY") OF A SHARE CAPITAL EXCHANGE, ASSET ACQUISITION
OR
OTHER SIMILAR BUSINESS COMBINATION ("BUSINESS COMBINATION") (AS DESCRIBED MORE
FULLY IN THE COMPANY'S REGISTRATION STATEMENT (DEFINED HEREIN)) OR OCTOBER
4,
2008. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, OCTOBER 4, 2012.
UNIT
PURCHASE OPTION
FOR
THE PURCHASE OF
[
] UNITS
OF
FMG
ACQUISITION CORP.
1.
PURCHASE
OPTION.
THIS
CERTIFIES T
HAT,
in
consideration of $[
] duly paid by or
on behalf of [
] or its designee
("HOLDER"), as registered owner of this Purchase Option, to FMG Acquisition
Corp. ("COMPANY"), Holder is entitled, at any time or from time to time upon
the
later of the consummation of a Business Combination or October 4, 2008
("COMMENCEMENT DATE"), and at or before 5:00 p.m., New York City local time,
October 4, 2012 ("EXPIRATION DATE"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to [
] units ("UNITS") of the Company, each Unit consisting of
one share of common stock of the Company, par value $0.0001 per share ("COMMON
SHARE(S)"), and one warrant ("WARRANT(S)") 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"). If the Expiration Date is a day on which banking
institutions are authorized by law to close, 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 $10.00 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 Common Shares and Warrants) to be received upon such exercise, shall be
adjusted as therein specified. The term "Exercise Price" shall mean the initial
exercise price or the adjusted exercise price, 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
LEGEND.
Each certificate for the securities purchased under this Purchase Option shall
bear a legend as follows unless such securities have been registered under
the
Securities Act of 1933, as amended ("ACT"):
"The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended ("Act") or applicable state law. The
securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or pursuant
to an
exemption from registration under the Act and applicable state law."
2.3
CASHLESS
EXERCISE.
2.3.1
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 Shares 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
(the
"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 Common Shares 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 the portion of the Purchase
Option being converted. 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 Warrants are still
trading, the remainder derived from subtracting (x) the exercise price of the
Warrants multiplied by the number of Common Shares issuable upon exercise of
the
Warrants underlying one Unit from (y) (i) the Current Market Price of the Common
Shares multiplied by (ii) the number of Common Shares underlying one Unit,
which
shall include the Common Shares underlying the Warrants included in such Unit;
(B) in the event that the Units, Common Shares and 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 such as the Bulletin Board 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 Shares and Warrants
underlying the Units are still trading, the Current Market Price of the Common
Shares plus the product of (x) the Current Market Price of the Warrants and
(y)
the number of Warrants included in one Unit. The "CURRENT MARKET PRICE" shall
mean (i) if the Common Shares (or Warrants, as the case may be) are listed
on a
national securities exchange or quoted on the Nasdaq Global Market, Nasdaq
Capital Market or NASD OTC Bulletin Board (or successor such as the Bulletin
Board Exchange), the last sale price of the Common Shares (or Warrants) in
the
principal trading market for the Common Shares 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 Shares (or Warrants, as the case may be)
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 are traded in the residual over-the-counter market, the closing
bid price for the Common Shares (or 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 Shares 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.
2.3.2
MECHANICS
OF CASHLESS EXERCISE. 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.
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
this Purchase Option for a period of one year following the Effective Date
to
anyone other than (i) Pali or an underwriter or a selected dealer in connection
with the Offering, or (ii) a bona fide officer or partner of Pali or of any
such
underwriter or selected dealer. On and after the first anniversary of 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 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 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 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 Securities and Exchange Commission (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 except in the case of an exercise of this Purchase Option
contemplated by Section 2.3 hereof, 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 51% of the Purchase Options and/or the underlying Units
and/or the underlying securities ("MAJORITY HOLDERS"), agrees to register (the
"DEMAND REGISTRATION") under the Act on one occasion, all or any portion 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 Shares, the Warrants and the Common Shares underlying the Warrants
(collectively, the "REGISTRABLE SECURITIES"). On such
occasion,
the Company will file a registration statement or a post-effective amendment
to
the Registration Statement covering the Registrable Securities 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 five years beginning on the Effective Date. The Initial Demand
Notice 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 the Purchase Options and/or 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 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 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, taken
together with all other Common Shares or other securities which the Company
desires to sell and the Common Shares, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights held
by
other shareholders 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 (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 Common Shares 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 Common Shares 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 October __,
2007 (the "REGISTRATION RIGHTS AGREEMENT" and such registrable securities,
the
"INVESTOR SECURITIES") as to which "piggy-back" registration has been 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 Common Shares 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.
5.1.6
TERMS.
The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the reasonable 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
shareholders of the Company to be obligated to escrow their shares of share
capital of the Company. The Company shall cause any registration statement
or
post-effective amendment filed pursuant to the demand rights granted under
Section 5.1.1 to remain effective for a period of nine consecutive months from
the effective date of such registration statement or post-effective amendment.
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 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 shareholders of the Company for their account
(or by the Company and by shareholders of the Company including, without
limitation, pursuant to Section 5.1), other than a registration statement (i)
filed in connection with any employee share option or other benefit plan, (ii)
for an exchange offer or offering of securities solely to the Company's existing
shareholders, (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 shares 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 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
Common Shares which the Company desires to sell, taken together with Common
Shares, 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 Common Shares, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds
the
Maximum Number of Shares, then the Company shall include in any such
registration:
(a)
If
the
registration is undertaken for the Company's account:
(A)
first, the Common Shares or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (B) second,
to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Common Shares or other securities, if any, comprised
of Registrable Securities and Investor 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 Shares; and (C) third, to the extent that the
Maximum Number of shares has not been reached under the foregoing clauses (A)
and (B), the Common Shares 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 Shares;
(b)
If
the
registration is a "demand" registration undertaken at the demand of holders
of
Investor Securities, (A) first, the Common Shares or other securities for the
account of the demanding persons, Pro Rata, that can be sold without exceeding
the Maximum Number of Shares; (B) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (A), the Common Shares
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the shares 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 Shares; and (D) fourth, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (A), (B) and (C), the Common Shares 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 Shares; and
(c)
If
the
registration is a "demand" registration undertaken at the demand of persons
other than either the holders of Registrable Securities or of Investor
Securities, (A) first, the Common Shares or other securities for the account
of
the demanding persons that can be sold without exceeding the Maximum Number
of
Shares; (B) second, to the extent that the Maximum Number of Shares has not
been
reached under the foregoing clause (A), the Common Shares or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; (C) third, to the extent that the Maximum Number of Shares
has
not been reached under the foregoing clauses (A) and (B), collectively the
Common Shares or other securities comprised of Registrable Securities and
Investor Securities, Pro Rata, as to which registration has been requested
pursuant to the terms hereof and of the Registration Rights Agreement, as
applicable, that can be sold without exceeding the Maximum Number of Shares;
and
(D) fourth, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (A), (B) and (C), the Common Shares 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 Shares.
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.
5.3
NO
NET-CASH SETTLEMENT OR DAMAGES UPON FAILURE OF REGISTRATION. In no event shall
the registered Holder of this Purchase Option be entitled to (i) net-cash
settlement of this Purchase Option, regardless of whether any or all of the
Registrable Securities have been registered by the Company pursuant to an
effective registration statement, or (ii) receive any damages if any or all
of
the Registrable Securities have not been registered by the Company pursuant
to
an effective registration statement, subject to the requirement that the Company
use its best efforts to have a registration statement or post-effective
amendment filed pursuant to this Section declared effective as soon as possible
after receiving the Initial Demand Notice. In the event there is no effective
registration statement related to the issuance or exercise of the Warrants
contained within the Units, that portion of the Units may not be exercised
by
the Holder and therefore may expire and be worthless.
5.4
GENERAL
TERMS.
5.4.1
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 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 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 underwriters contained in Section 5 of the Underwriting Agreement
between the Company, Pali and the other underwriters named therein 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 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 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 underwriters have agreed to
indemnify the Company.
5.4.2
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.
5.4.3
DOCUMENTS
DELIVERED TO HOLDERS. The Company shall furnish Pali, as representative of
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)
in
the case of an underwritten offering, a "cold comfort" letter dated the
effective date of such registration statement (and a letter dated the date
of
the closing under 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 Pali, as representative of 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 Pali, as representative of
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 Pali, as representative of the Holders, shall reasonably
request. The Company shall not be required to disclose any confidential
information or other records to Pali, as representative of 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.
5.4.4
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
shareholders 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.
5.4.5
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).
5.4.6
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
SHARE
DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject to the provisions
of Section 6.3 below, the number of outstanding Common Shares is increased
by a
share dividend payable in Common Shares or by a split-up of Common Shares or
other similar event, then, on the effective date thereof, the number of Common
Shares underlying each of the Units purchasable hereunder shall be increased
in
proportion to such increase in outstanding shares. In such case, the number
of
Common Shares, 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 share dividend and at the time of such dividend
this Purchase Option is for the purchase of one Unit at $10.00 per whole Unit
(each Warrant underlying the Units is exercisable for $6.00 per share), upon
effectiveness of the dividend, this Purchase Option will be adjusted to allow
for the purchase of one Unit at $10.00 per Unit, each Unit entitling the holder
to receive two Common Shares and two Warrants (each Warrant exercisable for
$3.00 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 Common Shares is decreased by a consolidation,
combination or reclassification of Common Shares or other similar event, then,
on the effective date thereof, the number of Common Shares underlying each
of
the Units purchasable hereunder shall be decreased in proportion to such
decrease in outstanding shares. In such case, the number of Common Shares,
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 Common Shares other than a change covered
by
Section 6.1.1 or 6.1.3 hereof or that solely affects the par value of such
Common Shares, 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 Common Shares), 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 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
Common Shares 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 Common Shares 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.
6.2
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 Shares), the corporation formed by such
consolidation or merger shall execute and deliver to the 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 and other securities and property
receivable upon such consolidation or merger, by a holder of the number of
Common Shares 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 Common Shares 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 or down to the nearest
whole number of Warrants, Common Shares or other securities, properties or
rights.
7.
RESERVATION
AND LISTING. The Company shall at all times reserve and keep available out
of
its authorized Common Shares, solely for the purpose of issuance upon exercise
of the Purchase Options or the Warrants underlying the Purchase Option, such
number of Common Shares 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
Common Shares 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 shareholder. 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 Common Shares 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 shareholder.
As long as the Purchase Options shall be outstanding, the Company shall use
its
best efforts to cause all (i) Units and Common Shares issuable upon exercise
of
the Purchase Options, (iii) Warrants issuable upon exercise of the Purchase
Options and (iv) Common Shares 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 Shares 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 shareholder for the election
of
directors or any other matter, or as having any rights whatsoever as a
shareholder 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 shareholders 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 shareholders of the Company at the same
time and in the same manner that such notice is given to the shareholders.
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 Common Shares 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 Shares any additional shares of share capital of
the
Company or securities convertible into or exchangeable for shares of share
capital 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:
FMG
Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, Chief Executive Officer and President
Facsimile:
(860) 674-1163
9.1
AMENDMENTS.
The Company and Pali 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
and Pali may deem necessary or desirable and that the Company and Pali deem
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.
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 of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall
be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any 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.
9.7
EXCHANGE
AGREEMENT. As a condition of the Holder's receipt and acceptance of this
Purchase Option, Holder agrees that, at any time prior to the complete exercise
of this Purchase Option by Holder, if the Company and Pali enter into an
agreement ("EXCHANGE AGREEMENT") pursuant to which they agree that all
outstanding Purchase Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a
party
to the Exchange Agreement.
IN
WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by
its
duly authorized officer as of the
11
th
day of
October 2007.
|
|
|
|
FMG
ACQUISITION CORP.
|
|
|
|
|
By:
|
Larry
G.
Swets, Jr.
|
|
Name:
Larry G. Swets, Jr.
|
Form
to
be used to exercise Purchase Option:
FMG
Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, Chief Executive Officer and President
Facsimile:
(860) 674-1163
Date:_________________,
20__
The
undersigned hereby elects irrevocably to exercise all or a portion of the within
Purchase Option and to purchase ____ Units of FMG Acquisition Corp. and hereby
makes payment of $____________ (at the rate of $____ per Unit) in payment of
the
Exercise Price pursuant thereto. Please issue the Common Shares and Warrants
as
to which this Purchase Option is exercised in accordance with the instructions
given below.
or
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 "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 assignment must correspond with the name as written upon
the face of the purchase option in every particular, without alteration or
enlargement or any change whatever.
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
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 FMG Acquisition Corp. ("COMPANY") evidenced by
the
within Purchase Option and does hereby authorize the Company to transfer such
right on the books of the Company.
Dated:___________________,
20__
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
enlargement or any change whatever.
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
10.1
UNDERWRITING
AGREEMENT
between
FMG
ACQUISITION CORP.
and
PALI
CAPITAL, INC.
Dated:
October 4, 2007
FMG
ACQUISITION CORP.
UNDERWRITING
AGREEMENT
New
York,
New York
October
4, 2007
Pali
Capital, Inc.
650
Fifth
Avenue, 6
th
Floor
New
York,
New York 10019
As
Representative of the
Several
Underwriters named in Schedule I hereto
Re:
Public Offering of Securities
Ladies
and Gentlemen:
The
undersigned, FMG Acquisition Corp., a Delaware corporation ("Company"), hereby
confirms its agreement with Pali Capital, Inc. ("Pali Capital" and also referred
to herein variously as "you," or the "Representative") and with the other
Underwriters named on Schedule I hereto for which Pali Capital is acting as
Representative (the Representative and the other Underwriters being collectively
called the "Underwriters" or, individually, an "Underwriter") as
follows:
1.
Purchase
and Sale of Securities
.
1.1
Firm
Securities
.
1.1.1
Purchase
of Firm Units
.
On the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of
4,500,000 units ("Firm Units") of the Company, at a purchase price (net of
discounts and commissions) of $7.44 per Firm Unit. The Underwriters, severally
and not jointly, agree to purchase from the Company the number of Firm Units
set
forth opposite their respective names on Schedule I attached hereto and made
a
part hereof at a purchase price (net of discounts and commissions) of $7.44
per
Firm Unit. The Firm Units are to be offered initially to the public ("Offering")
at the offering price of $8.00 per Firm Unit. Each Firm Unit consists of one
share of the Company's common stock, par value $.0001 per share ("Common
Stock"), and one warrant ("Warrant"). The Common Stock and the Warrants included
in the Firm Units will not be separately transferable until 90 days after the
effective date ("Effective Date") of the Registration Statement (as defined
in
Section 2.1.1 hereof) unless the Representative informs the Company, in writing,
of its decision to allow earlier separate trading based on its assessment of
the
relative strengths of the securities markets and small capitalization companies
in general, and the trading pattern of, and demand for, the Company's securities
in particular, but in no event will the Representative allow separate trading
until (i) the Company has filed with the Securities and Exchange Commission
a
Current Report on Form 8-K that includes an audited balance sheet reflecting
the
Company's receipt of the proceeds of the Offering, including any proceeds the
Company receives from the exercise of the Over-allotment Option (as defined
in
Section 1.2.1), if such option is exercised prior to the filing of the Form
8-K,
(ii) the Company has filed with the Commission a Current Report on Form 8-K
and
issued a press release announcing when such separate trading will begin and
(iii) the expiration of the Over-allotment Option or its exercise in full.
Each
Warrant entitles its holder to exercise it to purchase one share of Common
Stock
for $6.00 during the period commencing on the later of the consummation by
the
Company of its "Business Combination" or one year from the Effective Date of
the
Registration Statement and terminating on the four-year anniversary of the
Effective Date. "Business Combination" shall mean any merger, capital stock
exchange, asset acquisition, other contractual arrangement resulting in a
business combination or other similar business combination consummated by the
Company with an operating business (as described more fully in the Registration
Statement (as defined in Section 2.1.1 below)).
1.1.2
Payment
and Delivery
.
Delivery and payment for the Firm Units shall be made at 10:00 a.m., New York
time, on the fourth Business Day (as defined below) following the effective
date
of the Registration Statement or at such earlier time as shall be agreed upon
by
the Representative and the Company at the offices of Kramer Levin Naftalis
&
Frankel LLP ("Kramer Levin") or at such other place as shall be agreed upon
by
the Representative and the Company. The closing of the public offering is
referred to herein as the “Closing” and the hour and date of delivery and
payment for the Firm Units are called “Closing Date.” Payment for the Firm Units
shall be made on the Closing Date at the Representative's election by wire
transfer in federal (same day) funds or by certified or bank cashier's check(s)
in New York Clearing House funds, payable as follows: $35,640,000 of the
proceeds received by the Company for the Firm Units and the Placement Warrants
(as defined in Section 2.22.3 below), including $1,440,000 of the Deferred
Fees
(as defined in Section 1.1.3 below) shall be deposited (or with respect to
the
$1,250,000 of proceeds from the sale of the Placement Warrants shall have been
deposited on or prior to the Closing Date) in the Trust Account established
by
the Company for the benefit of the public stockholders as described in the
Registration Statement ("Trust Account") pursuant to the terms of an Investment
Management Trust Agreement ("Trust Agreement") between the Company and
Continental Stock Transfer & Trust Company ("CST") and the remaining
proceeds shall be paid (subject to Section 3.12 hereof) to the order of the
Company upon delivery to you of certificates (in form and substance satisfactory
to the Underwriters) representing the Firm Units (or through the facilities
of
the Depository Trust Company ("DTC")) for the account of the Underwriters.
The
Firm Units shall be registered in such name or names and in such authorized
denominations as the Representative may request in writing at least two full
Business Days prior to the Closing Date. The Company will permit the
Representative to examine and package the Firm Units for delivery, at least
one
full Business Day prior to the Closing Date. The Company shall not be obligated
to sell or deliver the Firm Units except upon tender of payment by the
Representative for all the Firm Units. "Business Day" shall mean any day other
than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close
in
New York City.
1.1.3
Deferral
of a Portion of Underwriters' Discount
.
On the
Closing Date and, if applicable, on the Option Closing Date (as defined below),
Pali Capital agrees to deposit into the Trust Account a portion of the
Underwriters' discount equal to $0.32 per Unit in the Offering and, if
applicable, a portion of the discount equal to $0.32 per Option Unit (as defined
below) (the "Deferred Fees") until the earlier of the completion of a Business
Combination or the liquidation of the Trust Account. Upon the consummation
of a
Business Combination, Pali Capital shall promptly receive the Deferred Fees
without interest.
In the
event that the Company is unable to consummate a Business Combination and
Continental Stock Transfer & Trust Company, the trustee of the Trust
Account, commences liquidation of the Trust Account, Pali Capital hereby agrees
to the following: (i) to forfeit any rights or claims to the Deferred Fees
and
any interest accrued thereon; and (ii) that the Deferred Fees shall be
distributed on a pro-rata basis among the holders of the Common Stock included
in the Units sold in the Offering along with any interest accrued thereon,
net
of taxes.
1.2
Over-Allotment
Option
.
1.2.1
Option
Units
.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Underwriters are hereby granted, severally and
not
jointly, an option to purchase up to an additional 675,000 units from the
Company ("Over-allotment Option"). Such additional 675,000 units, the net
proceeds of which will be deposited in the Trust Account, are hereinafter
referred to as "Option Units." The Firm Units and the Option Units are
hereinafter collectively referred to as the "Units," and the Units, the Common
Stock and the Warrants included in the Units and the Common Stock issuable
upon
exercise of the Warrants are hereinafter referred to collectively as the "Public
Securities." The purchase price to be paid for each Option Unit will be the
same
price per Option Unit as the price per Firm Unit set forth in Section 1.1.1
hereof.
1.2.2
Exercise
of Option
.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time)
of
the Option Units within 45 days after the Effective Date. The Underwriters
will
not be under any obligation to purchase any Option Units prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may
be
exercised by the giving of oral notice to the Company by the Representative,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Units to be purchased and the date and time
for delivery of and payment for the Option Units (the "Option Closing Date"),
which will not be later than five full Business Days after the date of the
notice or such other time and in such other manner as shall be agreed upon
by
the Company and the Representative, at the offices of Kramer Levin or at such
other place as shall be agreed upon by the Company and the Representative.
Upon
exercise of the Over-allotment Option, the Company will become obligated to
convey to the Underwriters, and, subject to the terms and conditions set forth
herein, the Underwriters will become obligated to purchase, the number of Option
Units specified in such notice.
1.2.3
Payment
and Delivery
.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative's election by wire transfer in federal (same day) funds or by
certified or bank cashier's check(s) in New York Clearing House funds, payable
as follows: $7.44 per Option Unit, plus $0.32 of Deferred Fees per Option Unit,
shall be deposited in the Trust Account pursuant to the Trust Agreement and
the
remaining proceeds shall be paid (subject to Section 3.12 hereof) to the order
of the Company upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Option Units (or through
the
facilities of DTC) for the account of the Underwriters. The certificates
representing the Option Units to be delivered will be in such denominations
and
registered in such names as the Representative requests not less than two full
Business Days prior to the Closing Date or the Option Closing Date, as the
case
may be, and will be made available to the Representative for inspection,
checking and packaging at the aforesaid office of the Company's transfer agent
or correspondent not less than one full Business Day prior to such Closing
Date.
1.3
Representative's
Purchase Option
.
1.3.1
Purchase
Option
.
The
Company hereby agrees to issue and sell to the Representative (and/or its
designees) on the Effective Date an option ("Representative's Purchase Option")
for the purchase of an aggregate of 450,000 units ("Representative's Units")
for
an aggregate purchase price of $100. Each of the Representative's Units is
identical to the Firm Units, including the warrants constituting the Units
to
purchase Common Stock (sometimes referred to as the "Representative's
Warrants"). The Representative's Purchase Option shall be exercisable, in whole
or in part, commencing on the later of the consummation of a Business
Combination and one year from the Effective Date and expiring on the five-year
anniversary of the Effective Date at an initial exercise price per
Representative's Unit of $10.00 (125% of the initial public offering price
of a
Unit), and may be exercised on a cashless basis. The Representative's Purchase
Option, the Representative's Units, the Common Stock contained within the
Representative's Units, the Representative's Warrants and the Common Stock
issuable upon exercise of the Representative's Warrants are hereinafter referred
to collectively as the "Representative's Securities." The Public Securities
and
the Representative's Securities are hereinafter referred to collectively as
the
"Securities." The Representative understands and agrees that there are
significant restrictions against
transferring
the Representative's Securities during the first year after the Effective Date,
as set forth in Section 3 of the Representative's Purchase
Option.
1.3.2
Payment
and Delivery
.
Delivery and payment for the Representative's Purchase Option shall be made
on
the Closing Date. The Company shall deliver to the Underwriters, upon payment
therefor, certificates for the Representative's Purchase Option in the name
or
names and in such authorized denominations as the Representative may
request.
2.
Representations
and Warranties of the Company
.
The
Company represents and warrants to the Underwriters as follows:
2.1
Filing
of Registration Statement
.
2.1.1
Pursuant
to the Act
.
The
Company has filed with the Securities and Exchange Commission (the "Commission")
a Registration Statement and an amendment or amendments thereto, on Form S-1
(File No. 333-143466), including any related preliminary Prospectus (the
"Preliminary Prospectus"), for the registration of the Securities under the
Securities Act of 1933, as amended ("Act"), which Registration Statement and
amendment or amendments have been prepared by the Company in conformity with
the
requirements of the Act, and the rules and regulations (the "Regulations")
of
the Commission under the Act. The conditions for use of Form S-1 to register
the
Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied. Except as the context may otherwise require, such
Registration Statement, as amended, on file with the Commission at the time
the
Registration Statement becomes effective (including any Prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to Rule 430A of the Regulations), is hereinafter called
the
"Registration Statement," and the form of the final Prospectus dated the
Effective Date included in the Registration Statement (or, if applicable, the
form of final Prospectus filed by the Company with the Commission pursuant
to
Rule 424(b) at or after the time of effectiveness as allowed under Rule 430A
of
the Regulations), is hereinafter called the "Prospectus." For purposes of this
Agreement, "Time of Sale", as used in the Act, means 4:30 p.m. New York City
time, on the date of this Agreement. Prior to the Time of Sale, the Company
prepared a preliminary Prospectus, dated September 27, 2007, for distribution
by
the Underwriters (the "Sale Preliminary Prospectus"). If the Company has filed,
or is required pursuant to the terms hereof to file, a Registration Statement
pursuant to Rule 462(b) under the Act registering additional Securities of
any
type (a "Rule 462(b) Registration Statement"), then, unless otherwise specified,
any reference herein to the term "Registration Statement" shall be deemed to
include such Rule 462(b) Registration Statement. Other than a Rule 462(b)
Registration Statement, which, if filed, becomes effective upon filing, no
other
document with respect to the Registration Statement has heretofore been filed
with the Commission. All of the Public Securities have been registered under
the
Act pursuant to the Registration Statement or, if any Rule 462(b) Registration
Statement is filed, will be duly registered for public sale under the Act with
the filing of such Rule 462(b) Registration Statement. The Registration
Statement has been declared effective by the Commission on the date hereof.
If,
subsequent to the date of this Agreement, the Company or the Representative
has
determined that at the Time of Sale the Sale Preliminary Prospectus includes
an
untrue statement of a material fact or omitted a statement of material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and have agreed to provide an opportunity
to purchasers of the Firm Units to terminate their old purchase contracts and
enter into new purchase contracts, then the Sale Preliminary Prospectus will
be
deemed to include any additional information available to purchasers at the
time
of entry into the first such new purchase contract.
2.1.2
Pursuant
to the Exchange Act
.
The
Company has filed with the Commission a Form 8-A (File Number 000-52833)
providing for the registration under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), of the Units, the Common Stock and the Warrants.
The
registration of the Units, Common Stock and Warrants under the Exchange Act
has
been declared effective by the Commission on the date hereof.
2.2
No
Stop Orders, Etc
.
Neither
the Commission nor, to the best of the Company's knowledge, any state regulatory
authority has issued any order or threatened to issue any order preventing
or
suspending the use of any Sale Preliminary Prospectus or Prospectus or has
instituted or, to the best of the Company's knowledge, threatened to institute
any proceedings with respect to such an order.
2.3
Disclosures
In Registration Statement
.
2.3.1
Representation
as to Section 10b-5 of the Act
.
At the
time the Registration Statement became effective and at all times subsequent
thereto up to the Closing Date and the Option Closing Date, if any, the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
contains or will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and will in all material
respects conform to the requirements of the Act and the Regulations; and neither
the Registration Statement, the Sale Preliminary Prospectus nor the Prospectus,
nor any amendment or supplement thereto, on their respective dates, nor the
Sale
Preliminary Prospectus as of the Time of Sale (or such subsequent Time of Sale
pursuant to Section 2.1.1) does or will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under
which they were made, not misleading. When any Preliminary Prospectus or Sale
Preliminary Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement for the registration of the Securities or
any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus or Sale Preliminary Prospectus and any amendments
thereof and supplements thereto complied or will comply in all material respects
with the applicable provisions of the Act and the Regulations and did not and
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The representation and warranty made in this Section 2.3.1
does
not apply to statements made or statements omitted in reliance upon and in
conformity with written information furnished to the Company with respect to
the
Underwriters by the Representative expressly for use in the Registration
Statement, Sale Preliminary Prospectus or Prospectus or any amendment thereof
or
supplement thereto.
2.3.2
Disclosure
of Agreements
.
The
agreements and documents described in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus conform to the descriptions thereof
contained therein and there are no agreements or other documents required to
be
described in the Registration Statement, the Sale Preliminary Prospectus or
the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a party
or by which its property or business is or may be bound or affected and (i)
that
is referred to in the Sale Preliminary Prospectus or Prospectus, or (ii) is
material to the Company's business, has been duly and validly executed by the
Company, is in full force and effect in all material respects and is enforceable
against the Company and, to the Company's knowledge, the other parties thereto,
in accordance with its terms, except (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and none
of
such agreements or instruments has been assigned by the Company, and neither
the
Company nor, to the best of the Company's knowledge, any other party is in
breach or default thereunder and, to the best of the Company's knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a breach or default thereunder. To the best of the
Company's knowledge, performance by the Company of the material provisions
of
such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company
or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
2.3.4
Regulations
.
The
disclosures in the Registration Statement and Sale Preliminary Prospectus
concerning the effects of federal, state and local regulation on the Company's
business as currently contemplated fairly summarize in all material respects
and
do not omit to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not
misleading.
2.4
Changes
After Dates in Registration Statement
.
2.4.1
No
Material Adverse Change
.
Since
the respective dates as of which information is given in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, except as
otherwise specifically stated therein, (i) there has been no material adverse
change in the condition, financial or otherwise, or business prospects of the
Company, (ii) there have been no material transactions entered into by the
Company, other than as contemplated pursuant to this Agreement, and (iii) no
member of the Company's management has resigned from any position with the
Company.
2.4.2
Recent
Securities Transactions; Etc
.
Subsequent to the respective dates as of which information is given in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus,
and
except as may otherwise be indicated or contemplated herein or therein, the
Company has not (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money; or (ii) declared or paid
any dividend or made any other distribution on or in respect to its equity
securities.
2.5
Independent
Accountants
.
Rothstein, Kass & Company, P.C. ("RK&C"), whose report is filed with the
Commission as part of the Registration Statement, the Sale Preliminary
Prospectus and Prospectus and included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, are independent registered public
accountants as required by the Act and the Regulations. RK&C has not, during
the periods covered by the financial statements included in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, provided to
the
Company any non-audit services, as such term is used in Section 10a(g) of the
Exchange Act.
2.6
Financial
Statements
.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, the Sale Preliminary Prospectus and
Prospectus fairly present the financial position, the results of operations
and
the cash flows of the Company at the dates and for the periods to which they
apply; such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration Statement,
the Sale Preliminary Prospectus and Prospectus present fairly the information
required to be stated therein. The Registration Statement, the Sale Preliminary
Prospectus and Prospectus discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other
relationships of the Company with unconsolidated entities or other persons
that
may have a material current or future effect on the Company's financial
condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues
or expenses.
2.7
Authorized
Capital; Options; Etc
.
The
Company had at the date or dates indicated in the Sale Preliminary Prospectus
and Prospectus duly authorized, issued and outstanding capitalization as set
forth in the Registration Statement, the Sale Preliminary Prospectus, and the
Prospectus. Based on the assumptions stated in the Registration Statement,
the
Sale Preliminary Prospectus and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein. Except as
set
forth in, or contemplated by the Registration Statement, the Sale Preliminary
Prospectus and the
Prospectus,
on the Effective Date and on the Closing Date, there will be no options,
warrants, or other rights to purchase or otherwise acquire any authorized but
unissued shares of Common Stock of the Company or any security convertible
into
Common Stock of the Company, or any contracts or commitments to issue or sell
Common Stock or any such options, warrants, rights or convertible
securities.
2.8
Valid
Issuance of Securities, Etc.
2.8.1
Outstanding
Securities
.
All
issued and outstanding securities of the Company (including, without limitation,
the Placement Warrants) have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in violation of
the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The Public Securities conform in
all
material respects to the description thereof contained in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus. Subject to the
disclosure contained in the Registration Statement, the Preliminary Prospectus
and the Prospectus with respect to the Placement Warrants, the offers and sales
of the outstanding securities of the Company were at all relevant times either
registered under the Act or, based in part on the representations and warranties
of the purchasers of such securities, exempt from such registration requirements
and the registration requirements of applicable blue sky laws and
regulations.
2.8.2
Securities
Sold Pursuant to This Agreement
.
The
Securities have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable; the holders thereof are not
and
will not be subject to personal liability by reason of being such holders;
the
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to the descriptions
thereof contained in the Registration Statement, the Sale Preliminary Prospectus
and the Prospectus. When issued, the Representative's Securities will constitute
valid and binding obligations of the Company to issue and sell, upon exercise
thereof and payment of the respective exercise prices therefor, the number
and
type of securities of the Company called for thereby in accordance with the
terms thereof and such Representative' Securities are enforceable against the
Company in accordance with their respective terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (ii) as enforceability
of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.8.3
Placement
Warrants
.
The
Placement Warrants constitute valid and binding obligations of the Company
to
issue and sell, upon exercise thereof and payment of the respective exercise
prices therefor, the number and type of securities of the Company called for
thereby in accordance with the terms thereof, and such Placement Warrants are
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (ii)
as
enforceability of any indemnification or contribution provision may be limited
under federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The Common Stock issuable upon exercise
of
the Placement Warrants have been reserved for issuance upon the exercise of
the
Placement Warrants and, when issued in accordance with the terms of the
Placement Warrants, will be duly and validly authorized, validly issued, fully
paid and non-assessable, and the holders thereof are not and will not be subject
to personal liability by reason of being such holders.
2.9
Registration
Rights of Third Parties
.
Except
as set forth in the Sale Preliminary Prospectus and the Prospectus, no holders
of any securities of the Company or any rights exercisable for or convertible
or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company.
2.10
Validity
and Binding Effect of Agreements
.
This
Agreement, the Warrant Agreement (as defined in Section 2.21 hereof), the Trust
Agreement, the Services Agreement (as defined in Section 3.7.2 hereof), the
Escrow Agreement (as defined in Section 2.22.2 hereof) and the Subscription
Agreement (as defined in Section 2.22.3 hereof) have been duly and validly
authorized by the Company and constitute, and the Representative's Purchase
Option, has been duly validly authorized by the Company and, when executed
and
delivered, will constitute the valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (ii)
as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws, and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may
be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
2.11
No
Conflicts, Etc
.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Representative's Purchase Option, the Trust Agreement,
the Services Agreement, the Escrow Agreement and the Subscription Agreement,
the
consummation by the Company of the transactions herein and therein contemplated
and the compliance by the Company with the terms hereof and thereof do not
and
will not, with or without the giving of notice or the lapse of time or both
(i)
result in a breach of, or conflict with any of the terms and provisions of,
or
constitute a default under, or result in the creation, modification, termination
or imposition of any lien, charge or encumbrance upon any property or assets
of
the Company pursuant to the terms of any agreement or instrument to which the
Company is a party except pursuant to the Trust Agreement; (ii) result in any
violation of the provisions of the Company’s Bylaws and Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation"); or (iii)
violate any existing applicable law, rule, regulation, judgment, order or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or business.
2.12
No
Defaults; Violations
.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of the Amended
and Restated Certificate of Incorporation or in violation of any material
franchise, license, permit, applicable law, rule, regulation, judgment or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or businesses.
2.13
Corporate
Power; Licenses; Consents
.
2.13.1
Conduct
of Business
.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business as described in the Registration Statement,
Sale Preliminary Prospectus and the Prospectus. The disclosures in the
Registration Statement, the Sale Preliminary Prospectus and Prospectus
concerning the effects of federal, state and local regulation on this Offering
and the Company's business as currently
contemplated
are correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
2.13.2
Transactions
Contemplated Herein
.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Representative's Purchase Option, the Trust Agreement, the Escrow Agreement
and
the Subscription Agreement and as contemplated by the Registration Statement,
Sale Preliminary Prospectus and Prospectus, except with respect to applicable
federal and state securities laws and the rules and regulations promulgated
by
the Financial Industry Regulatory Authority ("FINRA").
2.14
D&O
Questionnaires
.
To the
best of the Company's knowledge, all information contained in the questionnaires
("Questionnaires") completed by each of the Company's officers, directors and
stockholders prior to the Offering ("Existing Stockholders") and previously
provided to the Representative is true and correct and the Company has not
become aware of any information which would cause the information disclosed
in
the questionnaires completed by each Existing Stockholder to become inaccurate
or incorrect.
2.15
Litigation;
Governmental Proceedings
.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company's knowledge,
threatened against, or involving the Company or, to the best of the Company's
knowledge, any Existing Stockholder which has not been disclosed, that is
required to be disclosed, in the Registration Statement, the Sale Preliminary
Prospectus or the Prospectus.
2.16
Good
Standing
.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its place of incorporation, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the assets, business or operations of
the
Company.
2.17
Stop
Orders
.
The
Commission has not issued any order preventing or suspending the use of the
Registration Statement, any Preliminary Prospectus, the Sale Preliminary
Prospectus or Prospectus or any part thereof and has not threatened to issue
any
such order.
2.18
Transactions
Affecting Disclosure to FINRA.
2.18.1
Finder's
Fees
.
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
Existing Stockholder with respect to the sale of the Securities hereunder or
any
other arrangements, agreements or understandings of the Company or any Existing
Stockholder that may affect the Underwriters' compensation, as determined by
FINRA.
2.18.2
Payments
Within Six Months
.
The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) (i) to any person, as a finder's fee, consulting fee or otherwise,
in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company, (ii) to
any
FINRA member or (iii) to any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the six months prior
to
the Effective Date, other than payments to the Representative in connection
with
this Offering.
2.18.4
Existing
Stockholders' FINRA Affiliation
.
Based
on questionnaires distributed to the Existing Stockholders, no officer, director
or any beneficial owner of the Company's unregistered securities has any direct
or indirect affiliation or association with any FINRA member, as determined
in
accordance with the rules and regulations of FINRA. The Company will advise
the
Representative and its counsel if it learns that any officer, director or
beneficial owner (direct or indirect) of 5% or more of the Company's outstanding
Common Stock is or becomes an affiliate or associated person of a FINRA member
participating in the Offering.
2.19
Foreign
Corrupt Practices Act; Patriot Act.
2.19.1
Foreign
Corrupt Practices Act
.
Neither
the Company nor any of the Existing Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Prospectus or
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company's internal
accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.
2.19.2
Patriot
Act
.
Neither
the Company nor any Company Affiliate has violated: (i) the Bank Secrecy Act,
as
amended, (ii) the Money Laundering Control Act of 1986, as amended, or (iii)
the
Uniting and Strengthening of America by Providing Appropriate Tools Required
to
Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the
rules
and regulations promulgated under any such law, or any successor
law.
2.20
Officers'
Certificate
.
Any
certificate signed by any duly authorized officer of the Company and delivered
to you or to your counsel shall be deemed a representation and warranty by
the
Company to the Underwriters as to the matters covered thereby.
2.21
Warrant
Agreement
.
The
Company has entered into a warrant agreement with respect to the Warrants and
the Representative's Warrants with CST substantially in the form annexed as
Exhibit 4.5 to the Registration Statement ("Warrant
Agreement").
2.22
Agreements
With Existing Stockholders
.
2.22.1
Insider
Letters
.
The
Company has caused to be duly executed legally binding and enforceable
agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (ii) as enforceability of any indemnification, contribution or
noncompete provision may be limited under the federal and state securities
laws,
and (iii) that the remedy of specific performance and injunctive and other
forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought),
the forms of which are annexed as Exhibits 10.4 through 10.10 to the
Registration Statement ("Insider Letters"), pursuant to which each of the
Existing Stockholders of the Company agree to certain matters, including but
not
limited to, certain matters described as being agreed to by them under the
"Proposed Business" Section of the Sale Preliminary Prospectus and Prospectus.
2.22.2
Escrow
Agreement
.
The
Company has caused the Existing Stockholders to enter into an escrow agreement
("Escrow Agreement") with CST ("Escrow Agent"), substantially in the form
annexed as Exhibit 10.2 to the Registration Statement, whereby (i) the Common
Stock owned by the Existing Stockholders (the "Existing Stockholders Shares")
will be held in escrow by the Escrow Agent, until one (1) year from the date
of
consummation of a Business Combination and (ii) the Placement Warrants will
be
held in escrow by the Escrow Agent until ninety (90) days from the date of
consummation of a Business Combination; provided, however, that if the Escrow
Agent is notified by the Company that the Company is being liquidated at any
time during the applicable Escrow Period (as that term is defined in the Escrow
Agreement), then immediately prior to the effectiveness of such liquidation,
the
Escrow Agent shall promptly destroy the certificates representing the Existing
Stockholders Shares and the Placement Warrants. During such escrow period,
the
Existing Stockholders shall be prohibited from selling or otherwise transferring
such shares (except
(a)
to
spouses and children of Existing Stockholders
,
(b)
after a Business Combination in a transaction whereby all the outstanding shares
of the Company are exchanged or converted into cash or another entity’s
securities and (c)
as
otherwise set forth in the Escrow Agreement
)
but
will retain the right to vote such shares
.
To the
Company's knowledge, the Escrow Agreement is enforceable against each of the
Existing Stockholders and will not, with or without the giving of notice or
the
lapse of time or both, result in a breach of, or conflict with any of the terms
and provisions of, or constitute a default under, any agreement or instrument
to
which any of the Existing Stockholders is a party. The Escrow Agreement shall
not be amended, modified or otherwise changed without the prior written consent
of the Representative.
2.22.3
Existing
Stockholders Subscription Agreement
.
FMG
Investors LLC (“FMGI”), an entity affiliated with the Company's executive
officers and directors, has executed and delivered an agreement, annexed as
Exhibit 10.12 of the Registration Statement (the "Subscription Agreement"),
pursuant to which such entity has purchased an aggregate of 1,250,000 warrants
in a private placement intended to be exempt from registration under the Act
under Section 4(2) of the Act ("Private Placement") at a purchase price of
$1.00
per warrant ("Placement Warrants") occurring immediately prior to the Effective
Date. FMGI and the Company have delivered executed copies of the Subscription
Agreement and FMGI has delivered the purchase price on or before the Effective
Date. Pursuant to the Subscription Agreement, (i) the $1,250,000 of proceeds
from the sale of the Placement Warrants has been deposited by the Company in
the
Trust Account in accordance with the terms of the Trust Agreement on or prior
to
the Effective Date, and (ii) the purchasers of the Placement Warrants have
waived any and all rights and claims that they may have to any proceeds, and
any
interest thereon, held in the Trust in respect of the Placement Warrants in
the
event that a Business Combination is not consummated and the Trust Account
is
liquidated in accordance with the terms of the Trust Agreement.
2.23
Investment
Management Trust Agreement
.
The
Company has entered into the Trust Agreement with CST with respect to certain
proceeds of the Offering and the Private Placement substantially in the form
annexed as Exhibit 10.1 to the Registration Statement.
2.24
No
Existing Non-Competition Agreements
.
No
Existing Stockholder, employee, officer or director of the Company is subject
to
any non competition agreement or non-solicitation agreement with any employer
or
prior employer which could materially affect his ability to be an Existing
Stockholder, employee, officer and/or director of the Company.
2.25
Investments
.
No more
than 45% of the "value" (as defined in Section 2(a)(41) of the Investment
Company Act of 1940, as amended ("Investment Company Act")) of the Company's
total assets (exclusive of "Government Securities" (as defined in Section
2(a)(16) of the Investment Company Act)) consist of, and no more than 45% of
the
Company's net income after taxes is derived from, securities other than the
Government Securities.
2.26
Subsidiaries
.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.28
Sarbanes-Oxley
Act
.
Solely
to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules
and
regulations promulgated by the Commission 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 in all material respects with all provisions of the
Sarbanes-Oxley Act that are in effect and with which the Company is required
to
comply.
3.
Covenants
of the Company
.
The
Company covenants and agrees as follows:
3.1
Amendments
To Registration Statement
.
The
Company will deliver to the Representative, prior to filing, any amendment
or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and the Company shall not file any such amendment
or
supplement to which the Representative shall reasonably object in
writing.
3.2
Federal
Securities Laws
.
3.2.1
Compliance
.
During
the time when a Prospectus is required to be delivered under the Act, the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary
to
permit the continuance of sales of or dealings in the Public Securities in
accordance with the provisions hereof and the Prospectus. If at any time when
a
Sale Preliminary Prospectus or Prospectus relating to the Public Securities
is
required to be delivered under the Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for the
Underwriters, the Sale Preliminary Prospectus or the Prospectus, as then amended
or supplemented, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the Sale Preliminary
Prospectus or the Prospectus to comply with the Act, the Company will notify
the
Representative promptly and prepare and file with the Commission, subject to
Section 3.1 hereof, an appropriate amendment or supplement in accordance with
Section 10 of the Act.
3.2.2
Filing
of Final Prospectus
.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission following the Effective Date pursuant to
the
requirements of Rule 424 of the Regulations.
3.2.3
Exchange
Act Registration
.
The
Company will use its best efforts to maintain the registration of the Public
Securities under the provisions of the Exchange Act (except in connection with
a
going-private transaction) for a period of five years from the Effective Date,
or until the Company is required to be liquidated if earlier, or, in the case
of
the Warrants, until the Warrants expire and are no longer exercisable. The
Company will not deregister the Public Securities under the Exchange Act without
the prior written consent of the Representative.
3.2.4
Ineligible
Issuer
.
At the
time of filing the Registration Statement and at the date hereof, the Company
was and is an "ineligible issuer," as defined in Rule 405 under the Securities
Act. The Company has not made and will not make any offer relating to the Public
Securities that would constitute an "issuer free writing Prospectus," as defined
in Rule 433, or that would otherwise constitute a "free writing Prospectus,"
as
defined in Rule 405.
3.3
Blue
Sky Filing
.
Unless
the Securities are listed or quoted, as the case may be, on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ Global Market, the Company
will endeavor in good faith, in cooperation with the Representative, at or
prior
to the time the Registration Statement becomes effective, to qualify the Public
Securities for offering and sale under the securities laws of such jurisdictions
as the Representative may reasonably designate, provided that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or to taxation as
a
foreign corporation doing business in such jurisdiction. In each jurisdiction
where such qualification shall be effected, the Company will, unless the
Representative agrees that such action is not at the time necessary or
advisable, use all reasonable efforts
to
file
and make such statements or reports at such times as are or may be required
by
the laws of such jurisdiction. The Company shall pay all filings fees in
connection with the qualification of the securities under the securities laws
of
such jurisdictions as the Representative may reasonably
designate.
3.4
Delivery
to Underwriters of Preliminary Prospectus, Sale Preliminary Prospectus And
Prospectuses
.
The
Company will deliver to each of the several Underwriters, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act such number of copies of each Preliminary
Prospectus, Sale Preliminary Prospectus and the Prospectus as such Underwriters
may reasonably request and, as soon as the Registration Statement or any
amendment or supplement thereto becomes effective, deliver to you two original
executed Registration Statements, including exhibits, and all post-effective
amendments thereto and copies of all exhibits filed therewith or incorporated
therein by reference and a copy of all original executed consents of certified
experts.
3.5
Effectiveness
and Events Requiring Notice to the Representative
.
The
Company will use its best efforts to cause the Registration Statement to remain
effective and will notify the Representative immediately and confirm the notice
in writing (i) of the effectiveness of the Registration Statement and any
amendment thereto, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or of the initiation, or the threatening, of any
proceeding for that purpose, (iii) of the issuance by any state securities
commission of any proceedings for the suspension of the qualification of the
public securities for offering or sale in any jurisdiction or of the initiation,
or the threatening, of any proceeding for that purpose, (iv) of the mailing
and
delivery to the Commission for filing of any amendment or supplement to the
Registration Statement or Prospectus, (v) of the receipt of any comments or
request for any additional information from the Commission, and (vi) of the
happening of any event during the period described in Section 3.2.3 hereof
that,
in the judgment of the Company or its counsel, makes any statement of a material
fact made in the Registration Statement, the Sale Preliminary Prospectus or
the
Prospectus untrue or that requires the making of any changes in the Registration
Statement, the Sale Preliminary Prospectus or the Prospectus in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. If the Commission or any state securities commission
shall
enter a stop order or suspend such qualification at any time, the Company will
make every reasonable effort to obtain promptly the lifting of such
order.
3.6
Review
of Quarterly Financial Statements
.
Until
the earlier of five years from the Effective Date, or until such earlier time
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, the filing of the Company's Form 10-Q quarterly report
and the mailing of quarterly financial information to stockholders.
3.7
Affiliated
Transactions
.
3.7.1
Business
Combinations
.
The
Company will not consummate a Business Combination with any entity which is
affiliated with any Existing Stockholder unless the Company obtains an opinion
from an independent investment banking firm that is a member of FINRA that
the
Business Combination is fair to the Company's stockholders from a financial
perspective. No Existing Stockholder or any affiliate of such person shall
receive any fees of any type (other than reimbursement of ordinary and customary
expenses incurred on behalf of the Company) in connection with any Business
Combination
3.7.2
Administrative
Services
.
The
Company has entered into an office services agreement ("Services Agreement")
with Fund Management Group LLC ("Affiliate") substantially in the form annexed
as Exhibit 10.11 to the Registration Statement pursuant to which the Affiliate
will make available to the Company general and administrative services,
including office space, utilities, administrative, technology and secretarial
services for the Company's use for up to $7,500 per month.
3.7.3
Compensation
to Existing Stockholders
.
Except
as set forth above in this Section 3.7, the Company shall not pay any Existing
Stockholder or any of their affiliates any fees or compensation from the
Company, for services rendered to the Company prior to, or in connection with,
the consummation of a Business Combination; provided that the Existing
Stockholders shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.
3.8
Financial
Public Relations Firm
.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall consider, in good faith, retaining at its expense
a financial public relations firm reasonably acceptable to Pali Capital for
a
term to be agreed on by the Company and Pali Capital.
3.9
Reports
to the Representative
.
3.9.1
Periodic
Reports, Etc
.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish to
the
Representative (Pali Capital, Inc., Attn: Michael Powell) and its counsel copies
of such financial statements and other periodic and special reports as the
Company from time to time furnishes generally to holders of any class of its
securities, and promptly furnish to the Representative (i) a copy of each
periodic report the Company shall be required to file with the Commission,
(ii)
a copy of every press release and every news item and article with respect
to
the Company or its affairs which was released by the Company, (iii) a copy
of
each Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by
the
Company, (iv) two (2) copies of each Registration Statement filed by the Company
with the Commission under the Securities Act, and (v) such additional documents
and information with respect to the Company and the affairs of any future
subsidiaries of the Company as the Representative may from time to time
reasonably request;
provided
the
Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representative and its counsel in connection with the Representative’s receipt
of such information
.
Documents filed with the Commission pursuant to its EDGAR system shall be deemed
to have been delivered to the Representative pursuant to this
Section.
3.9.2
Transfer
Sheets
.
For a
period of two years following the Effective Date or until such earlier time
upon
which the Company is required to be liquidated, the Company shall retain CST
or
another transfer and warrant agent acceptable to the Representative ("Transfer
Agent") and will furnish to the Underwriters at the Company's sole cost and
expense, for a period of one year following the Effective Date, such transfer
sheets of the Company's securities as the Representative may request, including
the daily and monthly consolidated transfer sheets of the Transfer Agent and
DTC. The Underwriters acknowledge that Continental Stock Transfer & Trust
Company is an acceptable Transfer Agent.
3.9.3
Secondary
Market Trading Maintenance
.
Unless
the Securities are listed or quoted, as the case may be, on the New York Stock
Exchange, the American Stock Exchange or quoted on the NASDAQ Global Market,
until such earlier time upon which the Company is required to be liquidated
or
upon consummation of a Business Combination, the Company shall take such actions
reasonably requested by the Representative, including the
filings
of any required initial and renewal notices in the various States to permit
secondary market trading of the securities under the Blue Sky laws of the fifty
States and, at the Company’s
cost and
expense and at the beginning of each fiscal quarter, shall provide the
Representative with a written report of counsel detailing those states in which
the Securities may be traded in non-issuer transactions under the Blue Sky
laws
of the fifty States ("Secondary Market Trading Survey").
3.10
Disqualification
of Form S-1
.
Until
the earlier of seven years from the date hereof or until the Warrants have
expired and are no longer exercisable, 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 Representative's
Warrants under the Act (except in connection with a going-private
transaction).
3.11
Payment
of Expenses
.
3.11.1
General
Expenses Related to the Offering
.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at Closing Date, all expenses incident
to
the performance of the obligations of the Company under this Agreement,
including but not limited to (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, the Preliminary, the Preliminary Sale and Final
Prospectuses and the printing and mailing of this Agreement and related
documents, including the cost of all copies thereof and any amendments thereof
or supplements thereto supplied to the Underwriters in quantities as may be
required by the Underwriters, (ii) the printing, engraving, issuance and
delivery of the Units, the Common Stock and the Warrants included in the Units
and the Representative's Purchase Option, including any transfer or other taxes
payable thereon, (iii) filing fees incurred in registering the Offering with
FINRA and filing fees, costs and expenses of qualifying the Public Securities
under state or foreign securities or Blue Sky laws (such fees shall not exceed
$25,000 in the aggregate), (iv) filing fees incurred in listing the Company
on
the NASD OTC Bulletin Board, (v) fees and disbursements of the transfer, escrow
and warrant agent, (vi) the Company's expenses associated with "due diligence"
and "road show" meetings arranged by the Representative, and (vii) the
preparation, binding and delivery of transaction "bibles," in form and style
reasonably satisfactory to the Representative and transaction lucite cubes
or
similar commemorative items in a style and quantity as reasonably requested
by
the Representative. The Company also agrees that, if requested by the
Representative, it will engage and pay up to $10,000 for an investigative search
firm of the Representative's choice to conduct an investigation of the
principals of the Company as shall be mutually selected by the Representative
and the Company. The Representative may deduct from the net proceeds of the
Offering payable to the Company on the Closing Date, or the Option Closing
Date,
if any, the expenses set forth in this Agreement to be paid by the Company
to
the Representative and others.
3.11.2
Expenses
Related to Business Combination
.
The
Company further agrees that, in the event the Representative, at the request
of
the Company, assists the Company in trying to obtain stockholder approval of
a
proposed Business Combination, the Company agrees to reimburse the
Representative for all reasonable out-of-pocket expenses, including, but not
limited to, "road-show" and due diligence expenses.
3.12
Application
of Net Proceeds
.
The
Company will apply the net proceeds from the Offering and Private Placement
received by it in a manner consistent with the application described under
the
caption "Use of Proceeds" in the Registration Statement, Sale Preliminary
Prospectus and Prospectus.
3.14
Notice
to FINRA
.
In the
event any person or entity (regardless of any FINRA affiliation or association)
is engaged to assist the Company in its search for a merger candidate or to
provide any other merger and acquisition services, the Company will provide
the
following to FINRA and to Pali Capital prior to the consummation of the Business
Combination: (i) complete details of all services and copies of agreements
governing such services; and (ii) justification as to why the person or entity
providing the merger and acquisition services should not be considered an
"Underwriter and related person" with respect to the Company's initial public
offering, as such term is defined in Rule 2710 of the NASD's Conduct Rules.
The
Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the proxy statement which the Company will file
for
purposes of soliciting stockholder approval for the Business
Combination.
3.15
Stabilization
.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of the Representative), has taken or will
take, directly or indirectly, any action designed to or that has constituted
or
that might reasonably be expected to cause or result in, under the Exchange
Act,
or otherwise, stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Public Securities.
3.16
Internal
Controls
.
The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management's general or specific authorization, (ii) transactions are
recorded as necessary in order to permit preparation of financial statements
in
accordance with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.17
Accountants
.
Until
the earlier of five years from the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
RK&C or another independent registered public accounting firm reasonably
acceptable to the Representative.
3.18
Form
8-K
.
The
Company shall, on the date hereof, retain its independent registered public
accounting firm to audit the financial statements of the Company as of the
Closing Date ("Audited Financial Statements") reflecting the receipt by the
Company of the proceeds of the Offering and the Private Placement. As soon
as
the audited financial statements become available, the Company shall immediately
file a current report on Form 8-K with the Commission, which report shall
contain the Company's Audited Financial Statements.
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 NASD OTC Bulletin
Board.
3.19
Corporate
Proceedings
.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
3.20
Investment
Company
.
The
Company shall cause the proceeds of the Offering to be held in the Trust Account
to be invested only in "Government Securities" (as defined in the Trust
Agreement) and disclosed in the Registration Statement, Sale, Preliminary
Prospectus or Prospectus. The Company will otherwise conduct its business in
a
manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates a Business Combination, it will be
engaged in a business other than that of investing, reinvesting, owning, holding
or trading securities.
3.21
Business
Combination Announcement
.
Within
four (4) business days following the consummation by the Company of a Business
Combination, the Company shall cause an announcement ("Business Combination
Announcement") to be placed, at its cost, in the Wall Street Journal, the New
York Times and a third publication to be selected by the Representative
announcing the consummation of the Business Combination and indicating that
the
Representative was the managing Underwriter in the Offering, in an aggregate
amount not to exceed $5,000. The Company shall supply the Representative with
a
draft of the Business Combination Announcement and provide the Representative
with a reasonable opportunity to comment thereon. The Company will not place
the
Business Combination Announcement without the final approval of the
Representative, which such approval will not be unreasonably
withheld.
3.22
Colorado
Trust Filing
.
In the
event the Securities are registered in the State of Colorado, the Company will
cause a Colorado form ES to be filed with the Commissioner of the State of
Colorado no less than 10 days prior to the distribution of the Trust Account
in
connection with a Business Combination and will do all things necessary to
comply with Section 11-51-302 and Rule 51-3.4 of the Colorado Securities
Act.
3.23
Amendments
to Certificate of Incorporation
.
(i) The
Company covenants and agrees, that prior to its initial Business Combination
it
will not seek to amend or modify any of provisions (A) - (F) of
Article Sixth of its Certificate of Incorporation.
(ii)
The
Company acknowledges that the purchasers of the Public Securities in the
Offering shall be deemed to be third party beneficiaries of this Agreement
and
specifically this Section 3.23.
(iii)
The
Representative specifically advises the Company that it will not waive this
Section 3.23 under any circumstances.
3.24
Private
Placement Proceeds
.
Prior
to the Effective Date, the Company shall deposit $1,250,000 of the proceeds
from
the Private Placement in the Trust Account and shall provide Pali Capital with
evidence of the same.
3.25
Sarbanes-Oxley
Act
.
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
in all material respects with 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 in all material respects 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.
3.26
Forfeiture
of Existing Stockholders’ Shares
.
If the
Over-allotment Option is not exercised in full, then promptly following the
earlier to occur of the expiration or termination of the Over-allotment Option,
the Company will cause the Existing Stockholders to forfeit shares of Common
Stock in an aggregate amount (up to 168,750 shares of Common Stock) sufficient
to cause the Existing Stockholders to own a number of shares of Common Stock
equal to 20% of the outstanding Common Stock after giving effect to the offering
of the Units and the exercise, if any, of the Over-allotment Option. For the
avoidance of doubt, if the Underwriters exercise the Over-allotment Option
in
full, the Existing Stockholders shall not be required to forfeit any shares
of
Common Stock pursuant to this Section 3.26.
4.
Conditions
of Underwriters' Obligations
.
The
obligations of the several Underwriters to purchase and pay for the Units,
as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and the Option Closing Date, if any, to the accuracy
of
the statements of officers of the Company made pursuant to the provisions hereof
and to the performance by the Company of its obligations hereunder and to the
following conditions:
4.1
Regulatory
Matters
.
4.1.1
Effectiveness
of Registration Statement
.
The
Registration Statement shall have become effective not later than 4:30 p.m.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending or contemplated by the Commission and any
request on the part of the Commission for additional information shall have
been
complied with to the reasonable satisfaction of Kramer Levin, counsel to the
Underwriters.
4.1.2
FINRA
Clearance
.
By the
Effective Date, the Representative shall have received clearance from FINRA
as
to the amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3
No
Blue Sky Stop Orders
.
No
order suspending the sale of the Units in any jurisdiction designated by you
pursuant to Section 3.3 hereof shall have been issued on either on the Closing
Date or the Option Closing Date, and no proceedings for that purpose shall
have
been instituted or shall be contemplated.
4.1.4
The
NASD OTC Bulletin Board
.
The
Securities shall have been admitted and approved for quotation on the NASD
OTC
Bulletin Board.
4.2
Company
Counsel Matters
.
4.2.1
Closing
Date and Option Closing Date Opinion of Counsel
.
On the
Closing Date and the Option Closing Date, if any, the Representative shall
have
received the favorable opinion of Ellenoff Grossman & Schole LLP, dated the
Closing Date or the Option Closing Date, as the case may be, addressed to the
Representative and in form and substance reasonably satisfactory to Kramer
Levin, covering the matters set forth on
Appendix
A
hereto.
4.2.2
Reliance
.
In
rendering such opinion, such counsel may rely (i) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Kramer Levin) or other counsel
reasonably acceptable to Representative, familiar with the applicable laws,
and
(ii) as to matters of fact, to the extent they deem proper, on certificates
or
other written statements of officers of the Company and officers of departments
of various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to the Underwriters' counsel
if
requested. The opinion of counsel for the Company and any opinion relied upon
by
such counsel for the Company shall include a statement to the effect that it
may
be relied upon by counsel for the Underwriters in its opinion delivered to
the
Underwriters.
4.3
Cold
Comfort Letter
.
At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to Kramer Levin from RK&C dated,
respectively, as of the date of this Agreement and as of the Closing Date and
the Option Closing Date, if any:
(i)
Confirming that they are independent accountants with respect to the Company
within the meaning of the Act and the applicable Regulations and that they
have
not, during the periods covered by the financial statements included in the
Preliminary Prospectus, Sale Preliminary Prospectus and the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g)
of
the Exchange Act;
(ii)
Stating that in their opinion the financial statements of the Company included
in the Registration Statement, the Sale Preliminary Prospectus and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published Regulations thereunder;
(iii)
Stating that, on the basis of their review which included a reading of the
latest available unaudited interim financial statements of the Company (with
an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholders
and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible
for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe
that
(a)
the unaudited financial statements of the Company included in the Registration
Statement, the Sale Preliminary Prospectus and Prospectus do not comply as
to
form in all material respects with the applicable accounting requirements of
the
Act and the Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with
that of the audited financial statements of the Company included in the
Registration Statement, the Sale Preliminary Prospectus and Prospectus, or
(b)
at a date not later than five days prior to the Effective Date, Closing Date
or
Option Closing Date, as the case may be, there was any change in the capital
stock or long-term debt of the Company, or any decrease in the stockholder's
equity of the Company as compared with amounts shown in the May 25, 2007 balance
sheet included in the Registration Statement, the Sale Preliminary Prospectus
and the Prospectus, other than as set forth in or contemplated by the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus,
or,
if there was any decrease, setting forth the amount of such decrease and (c)
during the period from May 25, 2007 to a specified date not later than five
days
prior to the Effective Date, Closing Date or Option Closing Date, as the case
may be, there was any decrease in revenues, net earnings or net earnings per
share of Common Stock, in each case as compared with the corresponding period
in
the preceding year and as compared with the corresponding period in the
preceding quarter, other than as set forth in or contemplated by the
Registration Statement, the Sale Preliminary Prospectus and Prospectus or,
if
there was any such decrease, setting forth the amount of such
decrease;
(iv)
Setting forth, at a date not later than five days prior to the Effective Date,
the amount of liabilities of the Company (including a break-down of commercial
papers and notes payable to banks);
(v)
Stating that they have compared specific dollar amounts, numbers of shares,
percentages of revenues and earnings, statements and other financial information
pertaining to the Company set forth in the Registration Statement and the Sale
Preliminary Prospectus and Prospectus, in each case to the extent that such
amounts, numbers, percentages, statements and information may be derived from
the general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel, with
the
results obtained from the application of specified readings, inquiries and
other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi)
Stating that they have not, since the Company's incorporation, provided the
Company's management with any written communication in accordance with PCAOB
Interim Auditing Standards AU Section 325, “Communications About Control
Deficiencies in an Audit of Financial Statements”; and
(vii)
Statements as to such other matters incident to the transaction contemplated
hereby as you may reasonably request.
4.4
Officers'
Certificates
.
4.4.1
Officers'
Certificate
.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the Chief Executive Officer and the Secretary or Assistant Secretary
of
the Company (in their capacities as such), dated the Closing Date or the Option
Closing Date, as the case may be, respectively, to the effect that the Company
has performed all covenants and complied with all conditions required by this
Agreement to be performed or complied with by the Company prior to and as of
the
Closing Date, or the Option Closing Date, as the case may be, and that the
conditions set forth in Section 4.5 hereof have been satisfied as of such date
and that, as of Closing Date and the Option Closing Date, as the case may be,
the representations and warranties of the Company set forth in Section 2 hereof
are true and correct. In addition, the Representative will have received such
other and further certificates of officers of the Company (in their capacities
as such) as the Representative may reasonably request.
4.4.2
Secretary's
Certificate
.
At each
of the Closing Date and the Option Date, if any, the Representative shall have
received a certificate of the Company signed by the Secretary or Assistant
Secretary of the Company, dated the Closing Date or the Option Date, as the
case
may be, respectively, certifying (i) that the Certificate of Incorporation
is
true and complete, has not been modified and is in full force and effect, (ii)
that the resolutions relating to the public offering contemplated by this
Agreement are in full force and effect and have not been modified, (iii) all
correspondence between the Company or its counsel and the Commission, and (iv)
as to the incumbency of the officers of the Company. The documents referred
to
in such certificate shall be attached to such certificate.
4.5
No
Material Changes
.
Prior
to and on each of the Closing Date and the Option Closing Date, if any, (i)
there shall have been no material adverse change or development involving a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement,
the
Sale Preliminary Prospectus and Prospectus, (ii) no action suit or proceeding,
at law or in equity, shall have been pending or threatened against the Company
or any Existing Stockholder before or by any court or federal or state
commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except
as
set forth in the Registration Statement, the Sale Preliminary Prospectus and
Prospectus, (iii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission,
and (iv) the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration
Statement, the Sale Preliminary Prospectus nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a material fact
or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
4.6
Delivery
of Agreements
.
4.6.1
Effective
Date Deliveries
.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreement,
the
Services Agreement, the Subscription Agreement and all of the Insider Letters.
4.6.2
Closing
Date Deliveries
.
On the
Closing Date, the Company shall have delivered to the Representative executed
copies of the Representative's Purchase Option.
4.7
Opinion
of Counsel for the Underwriters
.
All
proceedings taken in connection with the authorization, issuance or sale of
the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to you and to Kramer Levin and you shall have received from such
counsel a favorable opinion, dated the Closing Date and the Option Closing
Date,
if any, with respect to such matters as you and Kramer Levin may reasonably
require. On or prior to the Effective Date, the Closing Date and the Option
Closing Date, as the case may be, counsel for the Underwriters shall have been
furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Section 4.7, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
5.
Indemnification
.
5.1
Indemnification
Of Underwriters
.
5.1.1
General
.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by you that
participates in the offer and sale of the Securities (each a "Selected Dealer")
and each of their respective directors, officers and employees and each person,
if any, who controls any such Underwriter ("Controlling Person") within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any and all loss, liability, claim, damage and expense whatsoever (including
but
not limited to any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriters and the Company or between any of the Underwriters
and
any third party or otherwise) to which they or any of them may become subject
under the Act, the Exchange Act or any other statute or at common law or
otherwise or under the laws of foreign countries, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in
(i) any Preliminary Prospectus, the Registration Statement, Sale Preliminary
Prospectus or the Prospectus (as from time to time each may be amended and
supplemented); (ii) any materials or information provided to investors by,
or
with the approval of, the Company in connection with the marketing of the
offering of the Securities, including any "road show" or investor presentations
made to investors by the Company (whether in person or electronically); (iii)
any application or other document or written communication (in this Section
5,
collectively called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify
the
Units under the securities laws thereof or filed with the Commission, any state
securities commission or the OTC Bulletin Board; or (iv) any post effective
amendments to the Registration Statement or Prospectus or new Registration
Statement or Prospectus filed by the Company with the Commission, any state
securities commission or agency, the OTC Bulletin Board or any other securities
exchange in which is included any of the Representative's Securities, or the
omission or alleged omission from any Preliminary Prospectus, the Registration
Statement, Sale Preliminary Prospectus or the Prospectus or subsequent filing
by
the Company under clause (iv) above of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless (x) such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to an Underwriter by or on
behalf of such Underwriter expressly for use in any Preliminary Prospectus,
the
Registration Statement, Sale Preliminary Prospectus or Prospectus, or any
amendment or supplement thereof, or in any application, as the case may be,
or
(y)
the
use
of the Sale Preliminary Prospectus or Prospectus in violation of any stop order
or other notice received by any Underwriter indicating the then-current
Prospectus is not to be used in connection with the sale of any
Securities
.
With
respect to any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Prospectus, the indemnity agreement contained
in this paragraph shall not inure to the benefit of any Underwriter to the
extent that any loss, liability, claim, damage or expense of such Underwriter
results from the fact that a copy of the Prospectus was not given or sent to
the
person asserting any such loss, liability, claim or damage at or prior to the
written confirmation of sale of the Securities to such person as required by
the
Act and the Regulations, and if the untrue statement or omission has been
corrected in the Prospectus, unless such failure to deliver the Prospectus
was a
result of non-compliance by the Company with its obligations under Section
3.4
hereof. The Company agrees promptly to notify the Representative of the
commencement of any litigation or proceedings against the Company or any of
its
officers, directors or controlling persons in connection with the issue and
sale
of the Securities or in connection with the Registration Statement, Sale
Preliminary Prospectus or Prospectus.
5.1.2
Procedure
.
If any
action is brought against an Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1, such Underwriter or Selected Dealer shall promptly notify
the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and fees of counsel
(subject to the reasonable approval of such Underwriter or Selected Dealer,
as
the case may be) and payment of actual expenses. Such Underwriter, Selected
Dealer or controlling person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be
at
the expense of such Underwriter, Selected Dealer or controlling person unless
(i) the employment of such counsel at the expense of the Company shall have
been
authorized in writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel to have charge
of
the defense of such action, or (iii) such indemnified party or parties shall
have
reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action on behalf of
the
indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the
Underwriter, Selected Dealer and/or controlling person shall be borne by the
Company. Notwithstanding anything to the contrary contained herein, if the
Underwriter, Selected Dealer or controlling person shall assume the defense
of
such action as provided above, the Company shall have the right to approve
the
terms of any settlement of such action which approval shall not be unreasonably
withheld.
5.2
Indemnification
of the Company
.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement, Sale Preliminary Prospectus or
Prospectus or any amendment or supplement thereto or in any application, in
reliance upon, and in strict conformity with, written information furnished
to
the Company with respect to such Underwriter by or on behalf of the Underwriter
expressly for use in such Preliminary Prospectus, the Registration Statement,
Sale Preliminary Prospectus or Prospectus or any amendment or supplement thereto
or in any such application. In case any action shall be brought against the
Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement, Sale Preliminary Prospectus or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
5.3
Contribution
.
5.3.1
Contribution
Rights
.
In
order to provide for just and equitable contribution under the Act in any case
in which (i) any person entitled to indemnification under this Section 5 makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required on
the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company
is responsible for the balance; provided, that, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters shall
contribute in such proportion as is appropriate to reflect the relative fault
of
the Company and the Underwriters 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 the Company
and
the Underwriters 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 or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the provisions of this Section 5.3.1,
no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages that such Underwriter has otherwise been required to pay in respect
of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Underwriters or the Company, as
applicable.
5.3.2
Contribution
Procedure
.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party ("contributing party"), notify the contributing party
of
the commencement thereof, but the omission to so notify the contributing party
will not relieve it from any liability which it may have to any other party
other than for contribution hereunder. In case any such action, suit or
proceeding is brought against any party, and such party notifies a contributing
party or its representative of the commencement thereof within the aforesaid
fifteen days, the contributing party will be entitled to participate therein
with the notifying party and any other contributing party similarly notified.
Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party seeking contribution on account of any settlement of
any
claim, action or proceeding effected by such party seeking contribution without
the written consent of such contributing party. The contribution provisions
contained in this Section are intended to supersede, to the extent permitted
by
law, any right to contribution under the Act, the Exchange Act or otherwise
available. The Underwriters' obligations to contribute pursuant to this Section
5.3 are several and not joint.
6.
Default
by an Underwriter
.
6.1
Default
Not Exceeding 10% of Firm Units or Option Units
.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the Over-Allotment Option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
6.2
Default
Exceeding 10% of Firm Units or Option Units
.
In the
event that the default addressed in Section 6.1 above relates to more than
10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within
one
Business Day after such default relating to more than 10% of the Firm Units
or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one Business
Day within which to procure another party or parties satisfactory to you to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
will be terminated by you or the Company without liability on the part of the
Company (except as provided in Sections 3.11.1 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that
if such default occurs with respect to the Option Units, this Agreement will
not
terminate as to the Firm Units; and provided further that nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default
hereunder.
6.3
Postponement
of Closing Date
.
In the
event that the Firm Units or Option Units to which the default relates are
to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or option Closing Date for a reasonable period, but
not in any event exceeding five (5) business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Sale
Preliminary Prospectus or Prospectus or in any other documents and arrangements,
and the Company agrees to file promptly any amendment to the Registration
Statement or the Prospectus that in the opinion of counsel for the Underwriters
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any party substituted under this Section 6 with like effect as
if
it had originally been a party to this Agreement with respect to such
securities.
7.
Intentionally
Omitted
.
8.
Additional
Covenants
.
8.1
Additional
Shares or Options
.
The
Company hereby agrees that until the consummation of a Business Combination,
it
shall not issue any Common Stock (except with respect to any exercise of
Warrants) or any options or other securities convertible into Common Stock,
or
any shares of preferred stock or other securities of the Company which
participate or may participate in any manner in the Trust Account or which
vote
as a class with the Common Stock on a Business Combination.
8.2
Amendments
to Insider Letters, Subscription Agreement and Trust Account
.
The
Company shall not take any action or omit to take any action which would cause
a
breach of any of the Insider Letters executed between each existing stockholder
and Pali Capital or the Subscription Agreement executed between FMGI and the
Company and will not allow any amendments to, or waivers of, such Insider
Letters, Subscription Agreement or the Trust Account without the prior written
consent of the Representative.
8.3
Prohibition
on Amendment of Certificate of Incorporation
.
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.
Except as set forth in Section 3.23, prior to the consummation of a Business
Combination, the Company will not, other than pursuant to the terms of the
Amended and Restated Certificate of Incorporation, amend its Amended and
Restated Certificate of Incorporation without the prior written consent of
the
holders holding not less than 95% of the Public Securities.
8.4
Acquisition/Liquidation
Procedure
.
The
Company agrees: (i) prior to the consummation of any Business Combination,
it
will submit such transaction to the Company's stockholders for their approval
("Business Combination Vote") even if the nature of the acquisition is such
as
would not ordinarily require stockholder approval under the laws of the state
of
Delaware; and (ii) in the event that the Company does not effect a Business
Combination within twenty-four (24) months from the consummation of the offering
(the "Termination Date"), this shall trigger an automatic winding-up of the
Company and the trust account will be liquidated to holders of IPO shares in
the
manner described in the Sale Preliminary Prospectus and the Prospectus as soon
as reasonably practicable, and subject to the requirements of the laws of the
state of Delaware. For purposes of this Section 8.4, the term "IPO shares"
means
the Common Stock contained in the public securities.
8.4.1
Upon
liquidation of the Trust Account, subject to the requirements of the laws of
the
State of Delaware, the Company will distribute only to the holders of IPO Shares
an aggregate sum equal to the Company's Liquidation Value, which sum shall
be
distributed Pro Rata among the holders of the IPO Shares. The Company's
"Liquidation Value" means: (i) all of the all principal and accrued interest
contained within the Trust Account, less any amounts previously distributed
to
the Company out of the interest earned on the Trust Account pursuant to the
terms of the Trust Agreement (after payment of, or provision for, applicable
taxes and claims of creditors) PLUS (ii) all cash and other liquid assets (which
shall be reduced to cash as part of the Company's winding up) then held by
the
Company outside of the Trust Account, all as distributed in amounts to the
holders as determined by CST, as trustee of the Trust Account. Only holders
of
IPO Shares as of the record date for the distribution shall be entitled to
receive liquidating distributions with respect to the IPO Shares they
beneficially own and the Company shall pay no liquidating distributions with
respect to any other shares of capital stock of the Company, including the
shares of Common Stock held by the Existing Stockholders prior to the Offering
(but shall include Common Stock underlying the Placement Warrants and Common
Stock purchased by Existing Stockholders after the Offering).
8.4.2
With
respect to the Business Combination Vote, the Company shall use its commercially
reasonable efforts to cause the Existing Stockholders to vote all Common Stock
owned by them immediately prior to the Offering in accordance with the vote
of
holders of a majority of the IPO Shares present, in person or by proxy, at
a
meeting of the Company's stockholders in connection with the Business
Combination Vote.
8.4.3
At
the
time the Company seeks approval of any potential Business Combination (prior
to
the confirmation of its initial Business Combination), the Company will offer
each of the holders of the IPO Shares the right to convert their IPO Shares
into
a pro rata share of the Trust Account (the "Conversion Price"). If holders
of
less than 30% in interest of the Common Stock vote against such approval of
a
Business Combination, the Company may, but will not be required to, proceed
with
such Business Combination. If the Company elects to so proceed, it will convert
shares of Common Stock, based upon the Conversion Price, from those holders
of
Common Stock who affirmatively requested such conversion and who voted against
the Business Combination as provided under the laws of the State of Delaware.
If
holders of 30% or more in interest of the Common Stock vote against approval
of
any potential Business Combination, the Company will not proceed with such
Business Combination and may seek another Business Combination or
liquidate.
8.5
Rule
419
.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including but not limited to using its best efforts to
prevent any of the Company's outstanding securities from being deemed to be
a
"Penny Stock" as defined in Rule 3a-51-1 under the Exchange Act during such
period.
8.7
Target
Net Assets
.
The
Company agrees that the initial target business that it acquires must have
a
fair market value equal to at least 80% of the Company's net assets held in
trust, net of taxes (all of the Company's assets, including the funds held
in
the Trust Account, less the Company's liabilities and deferred fees) at the
time
of such Business Combination. The fair market value of such business must be
determined by the board of directors of the Company based upon standards
generally accepted by the financial community, such as actual and potential
sales, earnings and cash flow and book value. If the board of directors of
the
Company is not able to independently determine that the target business has
a
fair market value of at least 80% of the Company's net assets held in trust,
net
of taxes, at the time of such acquisition, or if the target business is
affiliated with any of the existing stockholders, the Company will obtain an
opinion from an unaffiliated, independent investment banking firm which is
a
member of FINRA with respect to the satisfaction of such criteria. The Company
is not required to obtain an opinion from an investment banking firm as to
the
fair market value if the Company's board of directors independently determines
that the target business does have sufficient fair market value.
8.8
Trust
Account Waiver Acknowledgments
.
The
Company hereby agrees it will use best efforts, prior to commencing its due
diligence investigation of any operating business or businesses which the
Company seeks to acquire (each, a "Target Business") or obtaining the services
of any vendor, to obtain from such Target Business or vendor an acknowledgment
in writing, whether through a letter of intent, memorandum of understanding
or
other similar document (and subsequently acknowledges the same in any definitive
document replacing any of the foregoing), that (a) it has read the Prospectus
and understands that the Company has established the Trust Account, initially
in
an amount of $35,640,000
(without
giving effect to any exercise of the Over-allotment Option) for the benefit
of
the Public Stockholders and that, except for a portion of the interest earned
on
the amounts held in the Trust Account, the Company may disburse monies from
the
Trust Account only: (i) to the Public Stockholders in the event of the
conversion of their shares or the dissolution and liquidation of the Trust
Account as part of the Company's plan of dissolution and liquidation or (ii)
to
the Company after it consummates a Business Combination and (b) for and in
consideration of the Company (1) agreeing to evaluate such target business
for
purposes of consummating a Business Combination with it or (2) agreeing to
engage the services of the vendor, as the case may be, such target business
or
vendor agrees that it does not have any right, title, interest or claim of
any
kind in or to any monies of the Trust Account ("claim") and waives any claim
it
may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with the Company and will not seek recourse against
the
Trust Account for any reason whatsoever. The foregoing letters shall
substantially be in the form attached hereto as
E
xhibits
A and B
,
respectively.
8.9
Proxy
and Other Information
.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
9.
Representations
and Agreements to Survive Delivery
.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements as of the Closing Dates and such representations,
warranties and agreements of the Underwriters and the Company, including the
indemnity agreements contained in Section 5 hereof, shall remain operative
and
in full force and effect regardless of any investigation made by or on behalf
of
any Underwriter, the Company or any controlling person, and shall survive
termination of this Agreement or the issuance and delivery of the Securities
to
the several Underwriters until the earlier of the expiration of any applicable
statute of limitations and the seventh anniversary of the later of the Closing
Date or the Option Closing Date, if any, at which time the representations,
warranties and agreements shall terminate and be of no further force and effect.
10.
Effective
Date of This Agreement and Termination Thereof
.
10.1
Effective
Date
.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
10.2
Termination
.
You
shall have the right to terminate this Agreement at any time prior to the
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the NASDAQ
Stock Market or on the NASD OTC Bulletin Board (or successor trading market)
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the
New
York Stock Exchange, the American Stock Exchange, NASDAQ Stock Market or on
the
NASD OTC Bulletin Board (or successor trading market) or by order of the
Commission or any other government authority having jurisdiction, or (iii)
if
the United States shall have become involved in a new war or an increase in
major hostilities, or (iv) if a banking moratorium has been declared by a New
York State or federal authority, or (v) if a moratorium on foreign exchange
trading has been declared which materially adversely impacts the United States
securities market, or (vi) if the Company shall have sustained a material loss
by fire, flood, accident, hurricane, earthquake, theft, sabotage or other
calamity or malicious act which, whether or not such loss shall have been
insured, will, in your opinion, make it inadvisable to proceed with the delivery
of the Public Securities, or (vii) upon the suspension of trading of the
Company’s securities by the NASD OTC Bulletin Board, the Commission, or any
other governmental authority, or (viii) if any of the Company's representations,
warranties or covenants hereunder are breached and are not cured within five
(5)
Business Days of receipt of written notice of such breach, or (ix) if the
Representative shall have become aware after the date hereof of such a material
adverse change in the conditions or prospects of the Company, or such adverse
material change in general market conditions, including without limitation
as a
result of terrorist activities after the date hereof, as in the Representative's
judgment would make it impracticable to proceed with the offering, sale and/or
delivery of the Public Securities or to enforce contracts made by the
Underwriters for the sale of the Public Securities.
10.3
Expenses
.
In the
event that this Agreement shall not be carried out for any reason whatsoever,
other than as a result of the Representative’s or any Underwriters’ material
breach or default with respect to any of its material obligations, within the
time specified herein or any extensions thereof pursuant to the terms herein,
the obligations of the Company to pay the out of pocket expenses related to
the
transactions contemplated herein shall be governed by Section 3.11
hereof.
10.4
Indemnification
.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be
in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
11.
Miscellaneous
.
11.1
Notices
.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed by U.S. first class mail or delivered
by
courier and shall be deemed given five business days after deposited in the
mail
or when delivered if sent by courier to the following addresses:
|
If
to the Representative:
|
|
|
|
Pali
Capital, Inc.
|
|
650
Fifth Avenue, 6
th
Floor
|
|
New
York, New York 10019
|
|
Attn:
Michael Powell
|
|
Facsimile:
(212) 259-2093
|
|
|
|
Copy
to:
|
|
|
|
Kramer
Levin Naftalis & Frankel LLP
|
|
1177
Avenue of the Americas
|
|
New
York, New York 10036
|
|
Attn:
Christopher Auguste, Esq.
|
|
Facsimile:
(212) 715-8000
|
|
|
|
If
to the Company:
|
|
|
|
FMG
Acquisition Corp.
|
|
Four
Forest Park, Second Floor
|
|
Farmington,
Connecticut 06032
|
|
Attn:
Gordon G. Pratt, Chairman, President and Chief Executive
Officer
|
|
Facsimile:
(860) 677-2701
|
|
|
|
Copy
to:
|
|
|
|
Ellenoff
Grossman & Schole LLP
|
|
370
Lexington Avenue
|
|
New
York, New York 10017
|
|
Attn:
Douglas S. Ellenoff, Esq.
|
|
Facsimile:
(212) 370-7889
|
11.2
Headings
.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
11.3
Amendment
.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
11.4
Entire
Agreement
.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
11.5
Binding
Effect
.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or
be construed to have any legal or equitable right, remedy or claim under or
in
respect of or by virtue of this Agreement or any provisions herein contained.
This agreement and all conditions and provisions hereof are intended to be
for
the sole and exclusive benefit of the parties hereto and said controlling
persons and their respective successors, officers, directors, heirs and legal
representatives, and it is not for the benefit of any other person. The term
"successors and assigns" shall not include a purchaser, in its capacity as
such,
of securities from any of the Underwriters. The Company acknowledges and agrees
that: (i) the sale and issuance of the securities pursuant to this Agreement
is
an arm's-length commercial transaction between the Company and the Underwriters;
(ii) in connection therewith and with the process leading to the offering,
the
Underwriters are acting solely as a principal and not the agent or fiduciary
of
the Company; (iii) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto, including any negotiation related to
the
pricing of the securities; and (iv) the Company
has
consulted its own legal and financial advisors to the extent it has deemed
appropriate in connection with this Agreement and the offering.
11.6
Governing
Law
.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction. The Company 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 for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to
such
exclusive jurisdiction and that such courts represent an inconvenient forum.
Any
such process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
11.1 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
agrees that the prevailing party(ies) in any such action shall be entitled
to
recover from the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
11.7
Execution
In Counterparts
.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement via fax or email/.pdf
transmission shall constitute valid and sufficient delivery hereof.
11.8
Waiver,
Etc
.
The
Failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
11.9
No
Fiduciary Relationship
.
The
Company hereby acknowledges that the Underwriters are acting solely as
Underwriters in connection with the offering of the Company's securities. The
Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an
arm's length basis and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company, its management,
stockholders, creditors or any other person in connection with any activity
that
the Underwriters may undertake or have undertaken in furtherance of the offering
of the Company's securities, either before or after the date hereof. The
Underwriters hereby expressly disclaim any fiduciary or similar obligations
to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Company's securities, do not constitute advice
or
recommendations to the Company. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions.
[signature
page follows]
If
the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
Very
truly yours,
|
|
FMG
ACQUISITION CORP.
|
|
By:
|
/s/
Gordon G. Pratt
|
Name:
|
Gordon
G. Pratt
|
Title:
|
President
and CEO
|
|
|
Accepted
on the date first
above
written.
|
|
PALI
CAPITAL, INC.
|
|
|
By:
|
/s/
Hilary Bergman
|
Name:
|
Hilary
Bergman
|
Title:
|
Chief
Administrative Officer
|
|
|
For
themselves and the other several
|
Underwriters
named in Schedule I
|
to
the foregoing Agreement
|
FMG
ACQUISITION CORP.
4,500,000
UNITS
Underwriter
|
|
Number
of Firm Units
To
be Purchased
|
|
Pali
Capital, Inc.
|
|
|
3,375,000
|
|
Maxim
Group LLC
|
|
|
1,125,000
|
|
Total
|
|
|
4,500,000
|
|
APPENDIX
A
|
1.
|
The
Company has been duly organized and, based solely on a certificate
of good
standing from the state of its incorporation, is validly existing
as a
corporation and is in good standing under the laws of its state of
incorporation. The Company is duly qualified and licensed and in
good
standing in the State of
Connecticut.
|
|
2.
|
All
issued and outstanding securities of the Company (including, without
limitation, the Placement Warrants) have been duly authorized and
validly
issued and are fully paid and non-assessable; the holders thereof
are not
subject to personal liability solely by reason of being such holders;
and
none of such securities were issued in violation of the preemptive
rights
of any stockholder of the Company arising by operation of law or
under the
Amended and Restated Certificate of Incorporation ("Certificate")
or
Bylaws of the Company. The offers and sales of the outstanding Common
Stock prior to the Offering were at all relevant times either registered
under the Act or exempt from such registration requirements.
|
|
3.
|
The
Securities have been duly authorized and, when issued and paid for,
will
be validly issued, fully paid and non-assessable; the holders thereof
are
not and will not be subject to personal liability by reason of being
such
holders. The Securities are not and will not be subject to the preemptive
rights of any holders of any security of the Company arising by operation
of law or under the Articles of the Company. When issued, the
Representative's Purchase Option, the Representative's Warrants and
the
Warrants will constitute valid and binding obligations of the Company
to
issue and sell, upon exercise thereof and payment therefor, the number
and
type of securities of the Company called for thereby and such Warrants,
the Representative's Purchase Option, and the Representative's Warrants,
when issued, in each case, are enforceable against the Company in
accordance with their respective terms, except (a) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting creditors' rights generally, (b) as enforceability of any
indemnification or contribution provision may be limited under the
federal
and state securities laws, and (c) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to the
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought. The certificates representing
the
Securities are in due and proper
form.
|
|
4.
|
The
Placement Warrants constitute valid and binding obligations of the
Company
to issue and sell, upon exercise thereof and payment therefor, the
number
and type of securities of the Company called for thereby, and such
Placement Warrants are enforceable against the Company in accordance
with
their respective terms, except: (i) as such enforceability may be
limited
by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under federal and state
securities laws; and (iii) that the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject to
the
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought. A sufficient number of shares
of
Common Stock have been reserved for issuance upon exercise of the
Placement Warrants. The Common Stock underlying the Placement Warrants
will, upon exercise of the Warrants and payment of the exercise price
thereof, be duly and validly issued, fully paid, and non-assessable
and to
such counsel's knowledge, will not have been issued in violation
of or
subject to preemptive rights.
|
|
5.
|
This
Agreement, the Warrant Agreement, the Services Agreement, the Trust
Agreement, the Escrow Agreement and the Subscription Agreement have
each
been duly and validly authorized and, when executed and delivered
by the
Company, constitute, and the Representative's
Purchase Option has been duly and validly authorized by the Company
and,
when executed and delivered, will constitute, the valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except (a) as such enforceability may
be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, (b) as enforceability of any
indemnification or contribution provisions may be limited under the
federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may
be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be
brought.
|
|
6.
|
The
execution, delivery and performance of this Agreement, the Warrant
Agreement, the Representative's Purchase Option, the Escrow Agreement,
the
Trust Agreement, the Services Agreement and the Subscription Agreement
and
compliance by the Company with the terms and provisions thereof and
the
consummation of the transactions contemplated thereby, and the issuance
and sale of the Securities, do not and will not, with or without
the
giving of notice or the lapse of time, or both, (a) result in any
violation of the provisions of the Certificate of Incorporation or
the
Bylaws of the Company, or (b) to such counsel's knowledge, violate
any
United States statute, rule or regulation applicable to the Company,
or
with respect to any United States federal, state or other regulatory
authority or other governmental body having jurisdiction over the
Company,
its properties or assets.
|
|
7.
|
The
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
and any post-effective amendments or supplements thereto (other than
the
financial statements included therein, as to which no opinion need
be
rendered) each as of their respective dates appeared on their face
to
comply as to form in all material respects with the requirements
of the
Act and Regulations. The Securities and all other securities issued
or
issuable by the Company conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus. The descriptions in the Registration Statement, the Sale
Preliminary Prospectus and in the Prospectus, insofar as such statements
constitute a summary of statutes, legal matters, contracts, documents
or
proceedings referred to therein, fairly present in all material respects
the information required to be shown with respect to such statutes,
legal
matters, contracts, documents and
proceedings.
|
|
8.
|
Based
solely on a notice of effectiveness received from the Securities
and
Exchange Commission, the Registration Statement is effective under
the
Act. To such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending
or
threatened under the Act or applicable state securities
laws.
|
|
9.
|
The
opinion of counsel shall further include a statement to the effect
that
such counsel has participated in conferences with officers and other
representatives of the Company, the Underwriters and the independent
registered public accounting firm of the Company, at which conferences
the
contents of the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
contained therein and related matters were discussed and, although
such
counsel is not passing upon and does not assume any responsibility
for the
accuracy, completeness or fairness of the statements contained in
the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
contained therein (except as otherwise set forth in the foregoing
opinion), solely on the basis of the foregoing without independent
check
and verification, no facts have come to the attention of such counsel
which lead them to believe that the Registration Statement or any
amendment thereto, at the time the Registration Statement or amendment
became effective, 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 or the Prospectus
or any amendment or supplement thereto, at the time they were filed
pursuant to Rule 424(b) or at the date of such counsel's opinion,
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
statement therein, in light of the circumstances under which they
were
made, not misleading (except that such counsel need express no opinion
with respect to the financial information and statistical data and
information included in the Registration Statement, the Sale Preliminary
Prospectus or the Prospectus).
|
EXHIBIT
A
FORM
OF TARGET BUSINESS LETTER
FMG
Acquisition Corp.
Gentlemen:
Reference
is made to the Final Prospectus of FMG Acquisition Corp. (the "COMPANY"), dated
__________, 2007 (the "PROSPECTUS"). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in
Prospectus.
We
have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $____________ for the benefit of
the
Public Stockholders and the Underwriters of the Company's initial public
offering (the “UNDERWRITERS”) and that, except for a portion of the interest
earned on the amounts held in the Trust Account, the Company may disburse monies
from the Trust Account only: (i) to the Public Stockholders in the event of
(A)
the conversion of their shares and the consummation of a Business Combination
or
(B) upon the dissolution and liquidation of the Company or (ii) to the Company
and the Underwriters after it consummates a Business Combination.
For
and
in consideration of the Company agreeing to evaluate the undersigned for
purposes of consummating a 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 (each, a “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 the Company and will not seek
recourse against the Trust Account for any reason whatsoever.
|
|
|
|
|
|
|
|
Authorized
Signature of Target Business
|
|
EXHIBIT
B
FORM
OF VENDOR LETTER
FMG
Acquisition Corp.
Gentlemen:
Reference
is made to the Final Prospectus of FMG Acquisition Corp. (the "COMPANY"), dated
___________, 2007 (the "PROSPECTUS"). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in
Prospectus.
We
have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $____________ for the benefit of
the
Public Stockholders and the Underwriters of the Company's initial public
offering (the "UNDERWRITERS") and that, except for a portion of the interest
earned on the amounts held in the Trust Account, the Company may disburse monies
from the Trust Account only: (i) to the Public Stockholders in the event of
(A)
the conversion of their shares and the consummation of a Business Combination
or
(B) upon the dissolution and liquidation of the Company or (ii) to the Company
and the Underwriters after it consummates a Business Combination.
For
and
in consideration of the Company agreeing to use 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 (each, a "CLAIM")
and hereby waives any Claim it may have in the future as a result of, or arising
out of, any services provided to the Company and will not seek recourse against
the Trust Account for any reason whatsoever.
|
|
|
|
|
|
|
|
Authorized
Signature of Vendor
|
|
Exhibit
10.2
INVESTMENT
MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of October 4, 2007 by and between FMG Acquisition Corp.
(the “Company”) and Continental Stock Transfer & Trust Company
(“Trustee”).
WHEREAS,
the Company’s Registration Statement on Form S-1, File No. 333-143466
(“Registration Statement”), for its initial public offering of securities
(“IPO”) has been declared effective on October 4, 2007 by the Securities and
Exchange Commission (“Effective Date”); and
WHEREAS,
the Company has completed a private placement of 1,250,000 Warrants (the
“Private Warrants”) prior to the completion of the IPO for a purchase price of
$1,250,000; and
WHEREAS,
Pali Capital, Inc. (“Pali”) is acting as the representative of the underwriters
in the IPO (the “Underwriters”); and
WHEREAS,
as described in the Company’s Registration Statement, in accordance with the
Company’s Amended and Restated Certificate of Incorporation, $35,640,000 of the
net proceeds of the IPO and the sale of the Private Warrants ($40,878,000 if
the
Underwriters’ over-allotment option is exercised in full), will be delivered to
the Trustee as of October 11, 2007 to be deposited and held in a trust account
for the benefit of the Company, the holders of the common stock, par value
$.0001 per share, of the Company (“Common Stock”), included in the units of the
Company’s securities issued in the IPO (the “Units”), and Pali and in the event
the securities offered in the IPO are registered in Colorado, pursuant to
Section 11-51-302 (6) of the Colorado Revised Statutes (“CRS”), a copy of which
is attached hereto, and made a part hereof. 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, the Company and Pali and the
Underwriters will be referred to together as the “Beneficiaries”;
WHEREAS,
a portion of the Property consists of $1,440,000 (or $1,656,000 if the
Underwriters’ over-allotment is exercised in full) attributable to the
Underwriters’ discount (the “Deferred Discount”) which the Underwriters have
agreed to deposit in the Trust Account (as 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.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1.
Agreements
and Covenants of Trustee
.
The
Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the Beneficiaries in accordance with
the terms of this Agreement, including, without limitation, with respect to
the
Public Stockholders, the terms of Section 11-51-302(6) of the CRS in segregated
trust accounts (the “Trust Account”) established by the Trustee with JP Morgan
Chase, N.A. and at a brokerage institution selected by the Trustee;
(b)
Manage, supervise and administer the Trust Account subject to the
terms and conditions set forth herein;
(c)
In
a
timely manner, upon the written instruction of the Company, to invest and
reinvest the Property in any “Government Security” or in money market funds
selected by the Company meeting the conditions specified in Rule 2a-7
promulgated under the Investment Company Act of 1940, as amended, as determined
by the Company. As used herein, “Government Security” means any Treasury Bill
issued by the United States, having a maturity of one hundred and eighty days
or
less
;
(d)
Collect and receive, when due, all principal and income arising
from the Property, which shall become part of the “Property,” as such term is
used herein;
(e)
Promptly notify the Company and Pali of all communications received by it with
respect to any Property requiring action by the Company;
(f)
Supply any necessary information or documents as may be requested
by the Company in connection with the Company’s preparation of the tax returns
for the Trust Account or the Company;
(g)
Participate in any plan or proceeding for protecting or enforcing
any right or interest arising from the Property if, as and when instructed
by
the Company and/or Pali to do so;
(h)
Render to the Company and to such other person as the Company may
instruct, monthly written statements of the activities of and amounts in the
Trust Account reflecting all receipts and disbursements of the Trust
Account;
(i)
If there is any income or other tax obligation relating to the
income from the Property in the Trust Account, then, from time to time, at
the
written instruction of the Company, the Trustee shall promptly to the extent
there is not sufficient cash in the Trust Account to pay such tax obligation,
liquidate such assets held in the Trust Account as shall be designated by the
Company in writing; and
(j)
Commence
liquidation of the Trust Account only after and promptly after receipt of,
and
only in accordance with, the terms of a letter (“Termination Letter”), in a form
substantially similar to that attached hereto as either
Exhibit
A
or
Exhibit
B
hereto,
signed on behalf of the Company by its President or Chairman of the Board and
Secretary or Assistant Secretary, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account only as directed in
the
Termination Letter and the other documents referred to therein; provided,
however, that in the event that a Termination Letter has not been received
by
the Trustee by the 24-month anniversary of the effective date of the
Registration Statement (“Last Date”), the Trust Account shall be liquidated in
accordance with the procedures set forth in the Termination Letter attached
as
Exhibit B hereto and distributed to the stockholders of record on the Last
Date.
The provisions of this Section 1(j) may not be modified, amended or deleted
under any circumstances.
2.
Limited
Distributions of Income on Property
.
(a)
If there is any income tax obligation relating to the income from
the Property in the Trust Account, or if there is any franchise or other tax
obligation to which the Company is subject, then, at the written instruction
of
the Company, the Trustee shall disburse to the Company, out of the Property
in
the Trust Account, the amount indicated by the Company as required to pay
income, franchise or other taxes and disburse to the Company by wire transfer
out of the Property in the Trust Account, the amount indicated by the Company
as
owing in respect of such taxes.
(b)
Upon
written request from the Company containing certification that such distribution
pursuant to this Section 2(b) shall only be used to fund the working capital
requirements of the Company and the costs related to identifying, researching
and acquiring a prospective target business, including, without limitation,
the
expenses incurred in connection with the Company’s dissolution, the Trustee
shall distribute to the Company an amount up to $1,200,000 of the interest
earned and collected on the Property in the Trust Account, net of taxes payable,
through the last day of the month immediately preceding the date of receipt
of
the Company’s written request.
(c)
Upon
receipt of the Termination Letter, the Trustee shall liquidate the Trust Account
in accordance with Section 1(j).
(d)
Except
as
provided in this Section 2, no other distributions from the Trust Account shall
be permitted.
3.
Agreements
and Covenants of the Company
.
The
Company hereby agrees and covenants:
(a)
To provide all instructions to the Trustee hereunder in writing,
signed by the Company’s Chief Executive Officer and Chief Financial Officer. In
addition, except with respect to its duties under paragraphs 1(i) and 1(j),
the
Trustee shall be entitled to rely on, and shall be protected in relying on,
any
verbal or telephonic advice or instruction which it in good faith believes
to be
given by any one of the persons authorized above to give written instructions,
provided that the Company and/or Pali shall promptly confirm such instructions
in writing;
(b)
To
provide Pali with a copy of any Termination Letters and/or any other
correspondence it transmits to the Trustee with respect to any proposed
withdrawal from the Trust Account promptly after it issues
same;
(c)
Subject to the provisions of Section 5 hereof, to hold the Trustee
harmless and indemnify the Trustee from and against any and all expenses,
including reasonable counsel fees and disbursements, or loss suffered by the
Trustee in connection with any action, suit or other proceeding brought against
the Trustee involving any claim, or in connection with any claim or demand
which
in any way arises out of or relates to this Agreement, the services of the
Trustee hereunder, or the Property or any income earned from investment of
the
Property, except for expenses and losses resulting from the Trustee’s gross
negligence or willful misconduct. Promptly after the receipt by the Trustee
of
notice of demand or claim or the commencement of any action, suit or proceeding,
pursuant to which the Trustee intends to seek indemnification under this
paragraph, it shall notify the Company in writing of such claim (hereinafter
referred to as the “Indemnified Claim”). The Trustee shall have the right
to conduct and manage the defense against such Indemnified Claim, provided
that
the Trustee shall obtain the consent of the Company with respect to
the selection of counsel, which consent shall not be unreasonably withheld.
The Trustee may not agree to settle any Indemnified Claim without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. The Company may participate in such action with its own counsel
at its own expense;
(d)
Pay the Trustee an initial acceptance fee, an annual fee and a
transaction processing fee for each disbursement made pursuant to Sections
2(a)
and 2(b) as set forth on Schedule A hereto, which fees shall be subject to
modification by the parties from time to time. It is expressly understood that
the Property shall not be used to pay such fees and further agreed that said
transaction processing fees shall be deducted by the Trustee from the
disbursements made to the Company pursuant to Section 2(b). The Company shall
pay the Trustee the initial acceptance fee and first year’s fee at the
consummation of the IPO and thereafter on the anniversary of the Effective
Date.
The Trustee shall refund to the Company the annual fee (on a pro rata basis)
with respect to any period after the liquidation of the Trust Account. The
Company shall not be responsible for any other fees or charges of the Trustee
except as set forth in this Section 3(c) and as may be provided in Section
3(b)
hereof (it being expressly understood that the Property shall not be used to
make any payments to the Trustee under such Sections);
(e)
That, in the event the Company consummates a Business Combination
and the Trust Account is liquidated in accordance with Section 1(j) hereof,
an
independent party designated by Pali shall act as the inspector of election
to
certify the results of the stockholder vote. As used in this Agreement, the
term
“Business Combination” means the acquisition by the Company, through merger,
capital stock exchange, asset or stock acquisition of, or similar business
combination with, one or more operating businesses, as more fully described
in
the prospectus forming a part of the Registration Statement;
(f)
That the Company’s Chief Executive Officer and Chief Financial
Officer shall each certify the following (wherever applicable): (1) prior to
the
Last Date, the Company has entered into a Business Combination with a target
business, the terms of which are consistent with the requirements set forth
in
the Registration Statement; and (2) the Board of Directors (the “Board”)
pursuant to the unanimous written consent of the Board has approved the Business
Combination. A copy of such consent and the definitive agreement relating to
the
Business Combination so approved shall be attached as an exhibit to the
Officer’s Certificate;
(h)
Within five business days after the Underwriters’ over-allotment option (or any
unexercised portion thereof) expires or is exercised in full, to provide the
Trustee notice in writing (with a copy to the Underwriters) of the total amount
of the Deferred Discount, which shall in no event be less than $1,440,000;
and
4.
Limitations
of Liability
.
The
Trustee shall have no responsibility or liability to:
(a)
Take any action with respect to the Property, other than as
directed in Sections 1 and 2 hereof and the Trustee shall have no liability
to
any party except for liability arising out of its own gross negligence or
willful misconduct;
(b)
Institute any proceeding for the collection of any principal and
income arising from, or institute, appear in or defend any proceeding of any
kind with respect to, any of the Property unless and until it shall have
received written instructions from the Company given as provided herein to
do so
and the Company shall have advanced or guaranteed to it funds sufficient to
pay
any expenses incident thereto;
(c)
Change the investment of any Property, other than in compliance
with Section 1(c);
(d)
Refund any depreciation in principal of any
Property;
(e)
Assume that the authority of any person designated by the Company
to give instructions hereunder shall not be continuing unless provided otherwise
in such designation, or unless the Company shall have delivered a written
revocation of such authority to the Trustee;
(f)
The other parties hereto or to anyone else for any action taken or
omitted by it, or any action suffered by it to be taken or omitted, in good
faith and in the exercise of its own best judgment, except for its gross
negligence or willful misconduct. The Trustee may rely conclusively and shall
be
protected in acting upon any order, notice, demand, certificate, opinion or
advice of counsel (including counsel chosen by the Trustee), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is believed by
the
Trustee, in good faith, to be genuine and to be signed or presented by the
proper person or persons. The Trustee shall not be bound by any notice or
demand, or any waiver, modification, termination or rescission of this Agreement
or any of the terms hereof, unless evidenced by a written instrument delivered
to the Trustee signed by the proper party or parties and, if the duties or
rights of the Trustee are affected, unless it shall give its prior written
consent thereto;
(g)
Verify the correctness of the information set forth in the
Registration Statement or to confirm or assure that any acquisition made by
the
Company or any other action taken by it is as contemplated by the Registration
Statement, unless an officer of the Trustee has actual knowledge thereof,
written notice of such event is sent to the Trustee or as otherwise required
under Section 1(j) hereof;
(h)
Prepare, execute and file tax reports, income or other tax returns,
pay any taxes on behalf of the Trust Account and pay any taxes with respect
to
income and activities relating to the Trust Account, regardless of whether
such
tax is payable by the Trust Account or the Company (including but not limited
to
income tax obligations), (it being expressly understood that the Trustee’s sole
obligation with respect to taxes shall be to issue the checks with respect
thereto provided for by Section 2(a) hereof. If there is any income or other
tax
obligation relating to the Trust Account or the Property in the Trust Account,
as determined from time to time by the Company and regardless of whether such
tax is payable by the Company or the Trust, at the written instruction of the
Company, the Trustee shall make funds available in cash from the Property in
the
Trust Account an amount specified by the Company as owing to the applicable
taxing authority, which amount shall be paid directly to the Company by
electronic funds transfer, account debit or other method of payment, and the
Company shall forward such payment to the taxing authority; and
(i)
Verify
calculations, qualify or otherwise approve Company requests for distributions
pursuant to Section 1(i), 2(a) or 2(b) above.
5.
No
Right of Set-Off
.
The
Trustee waives any right of set-off or any right, title, interest or claim
of
any kind that the Trustee may have against the Property held in the Trust
Account. In the event the Trustee has a claim against the Company under this
Agreement, including, without limitation, under Section 3(b), the Trustee will
pursue such claim solely against the Company and not against the Property held
in the Trust Account.
6.
Termination
.
This
Agreement shall terminate as follows:
(a)
If the Trustee gives written notice to the Company that it desires
to resign under this Agreement, the Company shall use its reasonable efforts
to
locate a successor trustee during which time the Trustee shall continue to
act
in accordance with the terms of this Agreement. At such time the Company
notifies the Trustee that a successor trustee has been appointed by the Company
and has agreed to become subject to the terms of this Agreement, the Trustee
shall transfer the management of the Trust Account to the successor trustee,
including, but not limited to, the transfer of copies of the reports and
statements relating to the Trust Account, whereupon this Agreement shall
terminate; provided, however, that, in the event the Company does not locate
a
successor trustee within ninety days of receipt of the resignation notice from
the Trustee, the Trustee may, but shall not be obligated to, submit an
application to have the Property deposited with the United States District
Court
for the Southern District of New York and upon such deposit, the Trustee shall
be immune from any liability whatsoever that arises due to any actions or
omissions to act by any party after such deposit; or
(b)
At such time that the Trustee has completed the liquidation of the
Trust Account in accordance with the provisions of Section 1(j) hereof, and
distributed the Property in accordance with the provisions of the Termination
Letter, this Agreement shall terminate except with respect to Section
3(b).
7.
Miscellaneous
.
(a)
The Company and the Trustee each acknowledge that the Trustee will
follow the security procedures set forth below with respect to funds transferred
from the Trust Account. The Company and the Trustee will each restrict access
to
confidential information relating to such security procedures to authorized
persons. Each party must notify the other party immediately if it has reason
to
believe unauthorized persons may have obtained access to such information,
or of
any change in its authorized personnel. In executing funds transfers, the
Trustee will rely upon account numbers or other identifying numbers of a
beneficiary, beneficiary’s bank or intermediary bank, rather than names. The
Trustee shall not be liable for any loss, liability or expense resulting from
any error in an account number or other identifying number, provided it has
accurately transmitted the numbers provided.
(b)
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws principles that would result in the application of the
substantive laws of another jurisdiction. It may be executed in several
counterparts, each one of which shall constitute an original, and together
shall
constitute but one instrument. Facsimile signatures shall constitute original
signatures for all purposes of this Agreement.
(c)
This Agreement contains the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof. This Agreement
or
any provision hereof may only be changed, amended or modified by a writing
signed by each of the parties hereto; provided, however, that no such change,
amendment or modification may be made without the prior written consent of
Pali,
who, along with each other Underwriter, the parties specifically
agree, is and shall be a third party beneficiary for purposes of this
Agreement; and provided further, any amendment to Section 1(j) shall require
the
vote or consent of holders of 95% of the shares of Common Stock sold in the
IPO
(the “Public Stockholders”), it being the specific intention of the parties
hereto that each Public Stockholder is and shall be a third-party beneficiary
of
this Section 6(c) with the same right and power to enforce this Section 6(c)
as
either of the parties hereto. For purposes of this Section 6(c), the “consent of
95% of the Public Stockholders” shall mean receipt by the Trustee of a
certificate from an entity certifying that (i) such entity regularly engages
in
the business of serving as inspector of elections for companies whose securities
are publicly traded, and (ii) either (a) 95% of the Public Stockholders of
record as of the record date established in accordance with Section 213(a)
of
the Delaware General Corporation Law, as amended (the “DGCL”), have voted in
favor of such amendment or modification or (b) 95% of the Public Stockholders
of
record as of the record date established in accordance with Section 213(b)
of
the DGCL has delivered to such entity a signed writing approving such amendment
or modification. As to any claim, cross-claim or counterclaim in any way
relating to this Agreement, each party waives the right to trial by jury.
(d)
The parties hereto consent to the jurisdiction and venue of any
state or federal court located in the State and County of New York for purposes
of resolving any disputes hereunder. The parties hereto irrevocably submit
to
such jurisdiction, which jurisdiction shall be exclusive, and hereby waive
any
objection to such exclusive jurisdiction and accept such venue, and waive any
objection that such courts represent an inconvenient forum.
(e)
Any notice, consent or request to be given in connection with any
of the terms or provisions of this Agreement shall be in writing and shall
be
sent by express mail or similar private courier service, by certified mail
(return receipt requested), by hand delivery or by facsimile
transmission:
if
to the
Trustee, to:
Continental
Stock Transfer & Trust Company
17
Battery Place
New
York,
New York 10004
Attn:
Steve Nelson and Frank DiPaolo
Fax
No.:
(212) 509-5150
if
to the
Company, to:
FMG
Acquisition Corp.
Four
Forest Park Drive
Farmington,
CT 06032
Attn:
Gordon Pratt, Chief Executive Officer
Fax
No.:
(860) 674-1163
in
either
case with a copy to:
Pali
Capital, Inc.
650
Fifth
Avenue, 6
th
floor
New
York,
New York 10019
Attn:
R.
Michael Powell, Managing Director
Fax
No.:
(212) 259-2092
and
Ellenoff,
Grossman & Schole LLP
370
Lexington Avenue
New
York,
New York 10017
Attn:
Douglas S. Ellenoff, Esq.
Fax
No.:
(212) 370-7889
and
Kramer
Levin Naftalis & Frankel LLP
1177
Avenue of the Americas
New
York,
New York 10036
Attn:
Christopher S. Auguste, Esq.
Fax
No.:
(212) 715-8000
(f)
This Agreement may not be assigned by the Trustee without the prior
written consent of the Company and Pali.
(g)
Each of the Trustee and the Company hereby represents that it has
the full right and power and has been duly authorized to enter into this
Agreement and to perform its respective obligations as contemplated hereunder.
The Trustee acknowledges and agrees that it shall not make any claims or proceed
against the Trust Account, including by way of set-off, and shall not be
entitled to any funds in the Trust Account under any circumstance. The Trustee
hereby consents to the inclusion of Continental Stock Transfer & Trust
Company in the Registration Statement and other materials relating to the
IPO.
IN
WITNESS WHEREOF, the parties have duly executed this Investment Management
Trust
Agreement as of the date first written above.
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, as Trustee
|
|
|
By:
|
/s/
Frank DiPaolo
|
Name:
|
Frank
DiPaolo
|
Title:
|
Chief
Financial Officer
|
FMG
ACQUISITION CORP.
|
|
|
By:
|
/s/
Gordon Pratt
|
Name:
|
Gordon
Pratt
|
Title:
|
Chief
Executive Officer and President
|
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
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
FMG
Acquisition Corp.
(“Company”) and Continental Stock Transfer & Trust Company (“Trustee”),
dated as of October 4, 2007 (“Trust Agreement”), this is to advise you that the
Company has entered into an agreement (“Business Agreement”) with
__________________ (“Target Business”) to consummate a business combination with
Target Business (“Business Combination”) on or about [_______]. The Company
shall notify you at least 48 hours in advance of the actual date of the
consummation of the Business Combination (“Consummation Date”). Capitalized
words used herein and not otherwise defined shall have the meanings ascribed
to
them in the Trust Agreement.
In
accordance with paragraph 2 of Article 6 of the Amended and Restated Certificate
of Incorporation of the Company, the Business Combination has been approved
by
the stockholders of the Company and by the Public Stockholders holding a
majority of the IPO Shares cast at the meeting relating to the Business
Combination, and Public Stockholders holding less than 30% of the IPO Shares
have voted against the Business Combination and given notice of exercise of
their redemption rights described in paragraph 3 of Article 6 of the Amended
and
Restated Certificate of Incorporation of the Company. Pursuant to Section 3(f)
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 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 (a) the Business Combination has been consummated or will,
concurrently with your transfer of funds to the accounts as directed by the
Company, be consummated, and (b) the provisions of Section 11-51-302(6) and
Rule
51-3.4 of the CRS have been met, to the extent applicable, and (ii) the Company
shall deliver to you written instructions with respect to the transfer of the
funds held in the Trust Account (“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 be distributed
immediately and the penalty incurred. Upon the distribution of all the funds
in
the Trust Account pursuant to the terms hereof, the Trust Agreement shall be
terminated.
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 upon receipt by
the
Trustee of written instructions, 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.
|
Very
truly yours,
|
|
|
|
|
FMG
ACQUISITION CORP.
|
|
|
|
|
By:
|
|
|
Gordon
Pratt
Chief
Executive Officer and President
|
cc:
Pali
Capital, Inc.
EXHIBIT
B
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
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
FMG
Acquisition Corp.
(“Company”) and Continental Stock Transfer & Trust Company (“Trustee”),
dated as of October 4, 2007 (“Trust Agreement”), this is to advise you that the
Company has been unable to effect a Business Combination (as defined in the
Trust Agreement) with a target company within the time frame specified in the
Amended and Restated Certificate of Incorporation of the Company, as described
in the Company’s prospectus relating to its initial public
offering.
In
accordance with the terms of the Trust Agreement, we hereby (a) certify to
you
that the provisions of Section 11-51-302(6) and Rule 51-3.4 of the CRS have
been
met, and (b) authorize you to commence liquidation of the Trust Account as
promptly as practicable to the stockholders of record on the Last Date (as
defined in the Trust Agreement). The Company has appointed [ ] to serve as
its
Designated Paying Agent; accordingly, 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
terminated in accordance with the terms thereof.
|
Very
truly yours,
|
|
|
|
|
FMG
ACQUISITION CORP.
|
|
|
|
|
By:
|
|
|
Gordon
Pratt
|
|
Chief
Executive Officer and President
|
cc:
Pali
Capital, Inc.
Schedule
of fees pursuant to Section 3(c) of Investment Management Trust
Agreement
between
FMG Acquisition Corp. and
Continental
Stock Transfer & Trust Company
Fee
Item
|
|
Time
and method of payment
|
|
Amount
|
|
Initial
acceptance fee
|
|
Initial
closing of IPO by wire transfer
|
|
$
|
1,000
|
|
Annual
fee
|
|
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
|
|
$
|
3,000
|
|
Transaction
processing fee for disbursements to Company under Sections 2(a) and
2(b)
|
|
Deduction
by Trustee from disbursement made to Company under Section
2(b)
|
|
$
|
250
|
|
|
Agreed:
|
Dated:
October 4, 2007
|
|
|
|
FMG
Acquisition Corp.
|
|
|
|
|
By:
|
/s/
Gordon Pratt
|
|
|
Gordon
Pratt
|
|
|
Chief
Executive Officer and President
|
|
|
|
|
Continental
Stock Transfer & Trust Co.
|
|
|
|
|
By:
|
/s/
Frank Di Paolo
|
|
|
Authorized
Officer
|
Exhibit
10.3
SECURITIES
ESCROW AGREEMENT
SECURITIES
ESCROW AGREEMENT, dated as of October 4, 2007 (the “Agreement”) by and among FMG
Acquisition Corp., a Delaware corporation (the “Company”), the undersigned
parties listed as Initial Stockholders on the signature page hereto
(collectively, the “Initial Stockholders”) and Continental Stock Transfer &
Trust Company, a New York corporation (the “Escrow Agent”).
WHEREAS,
the Company has entered into an Underwriting Agreement, dated October 4, 2007
(“Underwriting Agreement”) with Pali Capital, Inc. (“Pali”) acting as
representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to
purchase 4,500,000 units (not including the underwriters’ over-allotment
option) (“Units”) of the Company. Each Unit consists of one share of the
Company’s common stock, par value $.0001 per share (the “Common Stock”), and one
warrant (“Warrant”), each Warrant to purchase one share of Common Stock, all as
more fully described in the Company’s definitive Prospectus, dated October 4,
2007 (“Prospectus”) comprising part of the Company’s Registration Statement on
Form S-1 (File No. 333-143466) under the Securities Act of 1933, as amended
(the
“Registration Statement”), declared effective on October 4, 2007 (the “Effective
Date”);
WHEREAS,
the Initial Stockholders have agreed, as a condition of the Underwriters’
obligation to purchase the Units pursuant to the Underwriting Agreement and
to
offer them to the public, to deposit all of their shares of Common Stock, as
set
forth opposite their respective names in Exhibit A attached hereto (collectively
the “Escrow Shares”), in escrow as hereinafter provided;
WHEREAS,
the Company has entered into a Subscription Agreement with one of the Initial
Stockholders (the “Initial Warrantholder”, and together with the Initial
Stockholders, the “Initial Holders”), dated May 22, 2007 (the “Subscription
Agreement”), pursuant to which the Initial Warrantholder has agreed to purchase
1,250,000 warrants (the “Private Warrants”) in a private placement
transaction;
WHEREAS,
the Initial Warrantholder has agreed as a condition of the sale of the Private
Warrants to deposit the Private Warrants (together with the Escrow Shares,
the
“Escrow Securities”), with the Escrow Agent as hereinafter provided;
and
WHEREAS,
the Company and the Initial Holders desire that the Escrow Agent accept the
Escrow Securities, in escrow, to be held and disbursed as hereinafter
provided.
IT
IS
AGREED:
1.
Appointment
of Escrow Agent
.
The
Company and the Initial Holders 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, each of the Initial Holders shall deliver to the
Escrow Agent certificates representing his, her or its respective Escrow
Securities, to be held and disbursed subject to the terms and conditions of
this
Agreement. Each Initial Holder acknowledges and agrees that the certificates
representing his or her Escrow Securities will bear a legend to reflect the
deposit of such Escrow Securities under this Agreement.
3.
Disbursement
of the Escrow Securities
.
3.1
The
Escrow Agent shall hold the Escrow Shares and the Private Warrants until the
termination of their respective Escrow Period (as defined below). In the case
of
the Escrow Shares, the “Escrow Period” shall be the period beginning on the date
the certificates representing the Shares are deposited with the Escrow Agent
and
ending on the date that is twelve (12) months following the consummation of
the
initial Business Combination (as such term is defined in the Registration
Statement). In the case of the Private Warrants, the “Escrow Period” shall be
the period beginning on the date the certificates representing the Private
Warrants are deposited with the Escrow Agent and ending on the 90th day after
the date of the consummation of the initial Business Combination. On the
termination date of the applicable Escrow Period, the Escrow Agent shall, upon
written instructions from the Company or Company counsel, disburse each of
the
Initial Holders’ Escrow Securities to such Initial Holder; provided, however,
that if the Escrow Agent is notified by the Company pursuant to Section 6.7
hereof that the Company is being liquidated at any time during the Escrow
Period, then the Escrow Agent shall promptly destroy the certificates
representing the Escrow Securities; provided further, that if, after the Company
consummates a Business Combination (as such term
is
defined in the Registration Statement), it (or the surviving entity)
subsequently consummates a liquidation, merger, stock exchange or other similar
transaction which results in all of its stockholders of such entity having
the
right to exchange their shares of Common Stock for cash, securities or other
property, then the Escrow Agent will, upon receipt of a notice, executed by
the
Chairman, Chief Executive Officer or Chief Financial Officer of the Company,
in
form reasonably acceptable to the Escrow Agent, certifying that such transaction
is then being consummated, release the Escrow Securities to the Initial Holders
so that they can similarly participate. The Escrow Agent shall have no further
duties hereunder after the disbursement or destruction of the Escrow Securities
in accordance with this Section 3.
4.
Rights
of Initial Holders in Escrow Securities
.
4.1
Voting
Rights as a Stockholder
.
Subject
to the terms of the Insider Letters described in Section 4.4 hereof and except
as herein provided, the Initial Stockholders shall retain all of their rights
as
stockholders of the Company during the Escrow Period, including, without
limitation, the right to vote such shares.
4.2
Dividends
and Other Distributions in Respect of the Escrow Securities
.
During
the Escrow Period, all dividends payable in cash with respect to the Escrow
Securities shall be paid to the Initial Stockholders, but all dividends payable
in stock or other non-cash property (“Non-Cash Dividends”) shall be delivered to
the Escrow Agent to hold in accordance with the terms hereof. As used herein,
the term “Escrow Securities” shall be deemed to include the Non-Cash Dividends
distributed thereon, if any.
4.3
Restrictions
on Transfer
.
During
the Escrow Period, no sale, transfer or other disposition may be made of any
or
all of the Escrow Securities except (i) by gift to a member of Initial Holders’
immediate family or to a trust or other entity, the beneficiary of which is
an
Initial Holder or a member of an Initial Holder’s immediate family, (ii) by
virtue of the laws of descent and distribution upon death of any Initial Holder,
(iii) pursuant to a qualified domestic relations order, (iv) to an entity that
is an Initial Holder, (v) to any person or entity controlling, controlled by,
or
under common control with, an Initial Holder or (vi) with respect to an Initial
Holder who is an individual, to an entity controlled by such Initial Holder;
provided, however, that such permitted transfers may be implemented only upon
the respective transferee’s written agreement to be bound by the terms and
conditions of this Agreement and of the Insider Letter signed by the Initial
Holder transferring the Escrow Securities. During the Escrow Period, the Initial
Holders shall not pledge or grant a security interest in the Escrow Securities
or grant a security interest in their rights under this
Agreement.
5.
Concerning
the Escrow Agent
.
5.1
Good
Faith Reliance
.
The
Escrow Agent shall not be liable for any action taken or omitted by it in good
faith and in the exercise of its own best judgment, and may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent),
statement, instrument, report or other paper or document (not only as to its
due
execution and the validity and effectiveness of its provisions, but also as
to
the truth and acceptability of any information therein contained) which is
believed by the Escrow Agent to be genuine and to be signed or presented by
the
proper person or persons. The Escrow Agent shall not be bound by any notice
or
demand, or any waiver, modification, termination or rescission of this Agreement
unless evidenced by a writing delivered to the Escrow Agent signed by the proper
party or parties and, if the duties or rights of the Escrow Agent are affected,
unless it shall have given its prior written consent thereto.
5.2
Indemnification
.
The
Escrow Agent shall be indemnified and held harmless by the Company from and
against any expenses, including counsel fees and disbursements, or loss suffered
by the Escrow Agent in connection with any action, suit or other proceeding
involving any claim which in any way, directly or indirectly, arises out of
or
relates to this Agreement, the services of the Escrow Agent hereunder, or the
Escrow Securities held by it hereunder, other than expenses or losses arising
from the gross negligence or willful misconduct of the Escrow Agent. Promptly
after the receipt by the Escrow Agent of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall notify
the other parties hereto in writing. In the event of the receipt of such notice,
the Escrow Agent, in its sole discretion, may commence an action in the nature
of interpleader in an appropriate court to determine ownership or disposition
of
the Escrow Securities or it may deposit the Escrow Securities with the clerk
of
any appropriate court or it may retain the Escrow Securities pending receipt
of
a final, non appealable order of a court having jurisdiction over all of the
parties hereto directing to whom and under what circumstances the Escrow
Securities are to be disbursed and delivered. The provisions of this Section
5.2
shall survive in the event the Escrow Agent resigns or is discharged pursuant
to
Sections 5.5 or 5.6 below.
5.3
Compensation
.
The
Escrow Agent shall be entitled to reasonable compensation from the Company
for
all services rendered by it hereunder, as set forth on Exhibit B hereto.
The Escrow Agent shall also be entitled to reimbursement from the Company for
all expenses paid or incurred by it in the administration of its duties
hereunder including, but not limited to, all counsel, advisors’ and agents’ fees
and disbursements and all taxes or other governmental charges.
5.5
Resignation
.
The
Escrow Agent may resign at any time and be discharged from its duties as escrow
agent hereunder by its giving the other parties hereto written notice and such
resignation shall become effective as hereinafter provided. Such resignation
shall become effective at such time that the Escrow Agent shall turn over to
a
successor escrow agent appointed by the Company and approved by Pali, the Escrow
Securities held hereunder. If no new escrow agent is so appointed within the
60
day period following the giving of such notice of resignation, the Escrow Agent
may deposit the Escrow Securities with any court it deems
appropriate.
5.6
Discharge
of Escrow Agent
.
The
Escrow Agent shall resign and be discharged from its duties as escrow agent
hereunder if so requested in writing at any time by the other parties hereto,
jointly, provided, however, that such resignation shall become effective only
upon acceptance of appointment by a successor escrow agent as provided in
Section 5.5.
5.7
Liability
.
Notwithstanding anything herein to the contrary, the Escrow Agent shall not
be
relieved from liability hereunder for its own gross negligence or its own
willful misconduct.
6.
Miscellaneous
.
6.1
Governing
Law
.
This
Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York. Each of the
parties 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. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
6.2
Third
Party Beneficiaries
.
Each of
the Initial Holders hereby acknowledges that the Underwriters, including,
without limitation, Pali, are third party beneficiaries of this Agreement and
this Agreement may not be modified or changed without the prior written consent
of Pali.
6.3
Entire
Agreement
.
This
Agreement contains the entire agreement of the parties hereto with respect
to
the subject matter hereof and, except as expressly provided herein, may not
be
changed or modified except by an instrument in writing signed by the party
to
the charged.
6.5
Binding
Effect
.
This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their legal representatives, successors and
assigns.
6.6
Notices
.
Any
notice or other communication required or which may be given hereunder shall
be
in writing and either be delivered personally or by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or,
if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two business days after the date of
mailing, as follows:
If
to the
Company, to:
FMG
Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, Chief Executive Officer and President
If
to a
Stockholder, to his address set forth in Exhibit A.
and
if to
the Escrow Agent, to:
Continental
Stock Transfer & Trust Company
17
Battery Place
New
York,
New York 10004
Attn:
Frank A. Di Paolo
Fax
No.:
(212) 616-7620
A
copy of
any notice sent hereunder shall be sent to:
Kramer
Levin Naftalis & Frankel LLP
1177
Avenue of the Americas
New
York,
New York 10036
Attn:
Christopher Auguste, Esq.
and:
Pali
Capital, Inc.
650
Fifth
Avenue, 6
th
floor
New
York,
New York 10019
Attn:
R.
Michael Powell, Managing Director
Ellenoff,
Grossman & Schole LLP
370
Lexington Avenue
New
York,
New York 10017
Attn:
Douglas S. Ellenoff, Esq.
The
parties may change the persons and addresses 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.
6.7
Liquidation
of Company
.
The
Company shall give the Escrow Agent written notification of the liquidation
and
dissolution of the Company in the event that the Company fails to consummate
a
Business Combination within the time period(s) specified in the
Prospectus.
6.8
Waiver
.
Notwithstanding anything herein to the contrary, the Escrow Agent hereby waives
any and all right, title, interest or claim of any kind (“Claim”) in or to any
distribution of the Trust Account, and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account
for any reason whatsoever.
6.9
Counterparts
.
This
Agreement may be executed in several counterparts each one of which shall
constitute an original and may be delivered by facsimile transmission and
together shall constitute one instrument.
[remainder
of page intentionally left blank]
WITNESS
the execution of this Agreement as of the date first above written.
FMG
ACQUISITION CORP.
|
|
|
By:
|
/s/
Gordon Pratt
|
|
Gordon
Pratt, Chief Executive Officer and President
|
|
|
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
|
|
By:
|
/s/
Gregory P. Denman
|
|
Name:
Gregory P. Denman
|
|
Title:
Vice President
|
|
|
FMG
INVESTORS LLC
|
|
|
|
|
By:
|
/s/
Larry G. Swets. Jr.
|
|
Larry
G. Swets, Jr.
|
|
Managing
Member
|
Address:Four
Forest Park
Farmington,
CT 06032
|
|
/s/
John Petry
|
John
Petry
|
|
/s/
David E. Sturgess
|
David
E. Sturgess
|
|
/s/
Thomas D. Argent
|
Thomas
D. Sargent
|
|
/s/
James R. Zuhlke
|
James
R. Zuhlke
|
EXHIBIT
A
Investor
|
|
Investors
Address
and
Facsimile Number
|
|
|
|
FMG
Investors LLC
Number
of Shares: 1,099,266
Number
of Warrants: 1,250,000
|
|
Four
Forest Park
Farmington,
CT 06032
Attn:
Larry G. Swets, Jr.
Facsimile
Number: (
860)
674-1163
|
|
|
|
John
Petry
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
David
E. Sturgess
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
F
our
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
Thomas
D. Sargent
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
James
R. Zuhlke
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
EXHIBIT B
Escrow
Agent Fees
$1,800
annually for acting agent escrow fee.
Initial
acceptance fee and first year agent fee to be paid at closing.
Exhibit
10.4
REGISTRATION
RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 4th
day of October, 2007, by and among FMG Acquisition Corp., a Delaware corporation
(the “Company”), and the undersigned parties listed under Investors 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;
WHEREAS,
the Investors currently hold an aggregate of 1,250,000 warrants (“Warrants”),
exercisable into an aggregate of 1,250,000 shares of the Common Stock (as
defined below) (“Warrant Shares”), each of the Warrants and the Warrant Shares
shall be referred to herein as the “Warrant Securities”;
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 and Warrant Securities 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.
“
Business
Combination
”
means
the acquisition of direct or indirect ownership through a merger, capital stock
exchange, asset or stock acquisition or other similar type of transaction,
of an
operating business or businesses having collectively, a fair market value of
at
least 80% of the Company’s net assets at the time of such transaction; provided,
however, that, any acquisition of multiple operating businesses shall occur
contemporaneously with one another.
“
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 $0.0001 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 2.2.4.
“
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.
“
Maximum
Number of Shares
”
is
defined in Section 2.1.4.
“
Notices
”
is
defined in Section 6.3.
“
Piggy-Back
Registration
”
is
defined in Section 2.2.1.
“
Purchase
Option
”
means
the option to purchase 450,000 units, each unit consisting of one share of
Common Stock and one Common Stock purchase warrant, issued to Pali Capital,
Inc.
or its registered assignees in connection with the Company’s initial public
offering or securities (as may be transferred from time to time in accordance
with its terms).
“
Purchase
Option Securities
”
means
the securities underlying the Purchase Option that have been granted
registration rights by the Company pursuant to the Purchase Option.
“
Register
,”
“
registered
”
and
“
registration
”
mean
a
registration with respect to the Registrable Securities 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
the 1,125,000 shares of Common Stock, 1,250,000 Warrants and 1,250,000
Warrant Shares owned or held by Investors prior to the effective date of the
Company’s initial public offering of securities, in each case that are eligible
for registration under the Securities Act and the terms of the Securities Escrow
Agreement. 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 shares of Common
Stock. 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 Securities and Exchange Commission makes a definitive determination to
the
Company that the Registrable Securities are saleable under Rule
144(k).
“
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 (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 I
”
means
the date on which shares of Common Stock are disbursed from escrow pursuant
to
Section 3 of the Securities Escrow Agreement.
“
Release
Date II
”
means
the date on which the Warrants are disbursed from escrow pursuant to Section
3
of the Securities Escrow Agreement.
“
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.
“
Securities
Escrow Agreement
”
means
that certain Securities Escrow Agreement dated as of October 4, 2007 by and
among the parties hereto and Continental Stock Transfer & Trust
Company.
“
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.
2.
REGISTRATION
RIGHTS.
2.1
Demand
Registration
.
2.1.1.
Request
for Registration
.
At any
time and from time to time on or after each of Release Date I as it relates
to
the 1,125,000 shares of Common Stock and Release Date II as it relates to the
Warrant Securities, as applicable, the holders of a majority-in-interest of
the
1,125,000 shares of Common Stock or the 1,250,000 Warrant Securities, as the
case may be, 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 and type 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 within ten (10) days from the receipt of the Demand
Registration, 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 with respect to the 1,125,000 shares of Common
Stock and two (2) Demand Registrations with respect to the Warrant Securities
under this Section 2.1.1 in respect of Registrable Securities. In no event
shall
a registration statement that has been filed with respect to the Warrant
Securities be declared effective until the Company has completed its initial
Business Combination.
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
has
been declared effective and the Company has complied with all of its obligations
under this Agreement or otherwise with respect thereto;
provided
,
however
,
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
,
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 registration rights set forth in the Purchase Option, which rights in
no
way shall be limited by the Maximum Number of Shares 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 shares 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, if any, as to which registration has been requested pursuant
to
written contractual piggy-back registration rights held by other shareholders
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 (
pro
rata
in
accordance with the number of shares of Registrable Securities which such
Demanding Holders have requested be included in such registration, regardless
of
the number of shares of Registrable Securities held by each Demanding Holder)
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 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;
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 that other shareholders desire to sell that can be sold without exceeding
the Maximum Number of Shares.
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 withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. In such event, the Company need not seek
effectiveness of such Registration Statement for the benefit of other Investors.
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 2.1.1.
2.2
Piggy-Back
Registration
.
2.2.1.
Piggy-Back
Rights
.
If at
any time on or after Release Date I as it relates to the 1,125,000 shares of
Common Stock and Release Date II as it relates to the Warrant Securities, 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 shareholders of the Company for their account
(or by the Company and by shareholders 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
shareholders, (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 shares 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 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 to be included
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 registration rights set forth in the Purchase Option, which rights in
no
way shall be limited by the Maximum Number of Shares 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 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 2.2, 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 shareholders of the Company, exceeds
the
Maximum Number of Shares, 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 Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock or other securities, if any, including
the Registrable Securities, and Purchase Option Securities as to which
registration has been requested pursuant to the applicable written contractual
piggy-back registration rights of such security holders (
pro
rata
in
accordance with the number of shares of Common Stock which each such person
has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right
to
request such inclusion) that can be sold without exceeding the Maximum Number
of
Shares; and (C) third, to the extent that the Maximum Number of shares has
not
been reached under the foregoing clauses (A) and (B), 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 piggy-back registration
rights with such persons (
pro
rata
in
accordance with the number of shares of Common Stock which each such person
has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right
to
request such inclusion) that can be sold without exceeding the Maximum Number
of
Shares; and
(ii)
If
the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities or pursuant to contractual
arrangements with such persons, (A) first, the shares of Common Stock for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
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 Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the Registrable Securities and Purchase Option Securities as to which
registration has been requested under this Section 2.2 (
pro
rata
in
accordance with the number of shares of Registrable Securities or Purchase
Options Securities held by each such holder); and (D) fourth, to the extent
that
the Maximum Number of Shares 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, if any, as to which
registration has been requested pursuant to written contractual arrangements
with such persons that can be sold without exceeding the Maximum Number of
Shares.
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 also elect to 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.
2.2.4.
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 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 2.2: (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 2.2 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
2.3
No
Net
Cash Settlement Value
.
In
connection with the exercise of the Warrants, the Company will not be obligated
to deliver securities, and there are no contractual penalties for failure to
deliver securities, if a registration statement is not effective at the time
of
exercise; however, the Company may satisfy its obligation by delivering
unregistered shares of Common Stock. In no event will the Company be
required to net cash settle an exercise of a Warrant
.
3.
REGISTRATION
PROCEDURES.
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 best efforts to
effect 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 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 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 shareholders 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 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 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
,
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
Section 3.1.5 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. Holders of Registrable Securities shall agree to such
covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that type. Further,
such holders shall cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include
securities pursuant to Section 2 hereof. Each holder shall also furnish to
the
Company such information regarding itself, the Registrable Securities held
by
such holder and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Registrable
Securities.
3.1.7.
Cooperation
.
The
principal executive officer of the Company, the principal financial officer
of
the Company, the principal accounting 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.
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 shareholders, 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 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 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 or whether any or all Holders of Registrable Securities withdraw
from
any Registration Statement, 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 be borne by such holders. Additionally, in an underwritten
offering, all selling shareholders 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.
3.5
Holder
Obligations
.
No
holder of Registrable Securities may participate in any underwritten offering
pursuant to this Section 3 unless such holder (i) agrees to sell only such
holder’s Registrable Securities on the basis reasonably provided in any
underwriting agreement, and (ii) completes, executes and delivers any and
all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required by or under
the
terms of any underwriting agreement or as reasonably requested by the
Company.
4.
INDEMNIFICATION
AND CONTRIBUTION.
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
(a) 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 (i)
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 or (ii) for the use by any selling
holder of a prospectus in violation of any stop order or other suspension of
the
Registration Statement of which the Company made the selling holder aware;
and
(b) the foregoing indemnity shall not inure to the benefit of any Investor
Indemnified Party if a copy of the Prospectus (as then amended or supplemented
if the Company shall have furnished any amendments or supplements thereto)
was
not sent or given by or on behalf of the applicable selling holder to the person
asserting such expense, loss, claim, damage or liability who purchased the
Registrable Securities from such selling holder, if required by law so to have
been delivered at or prior to the written confirmation of the sale of the
Registrable Securities to such person, and if the Prospectus (as so amended
or
supplemented) would have cured the defect giving rise to such expense, loss,
claim, damage or liability, unless such failure is the result of noncompliance
by the Company with Section 3.1.3 hereof. The Company also shall indemnify
any
Underwriter of the Registrable Securities or Purchase Option Securities, their
officers, employees, 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 person, if any, who controls another
selling holder or such Underwriter or the Company within the meaning of the
Securities Act or Section 20 of the Exchange 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, 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 or for the use by
any
Investor Indemnified Party of a prospectus in violation of any stop order or
other suspension of the Registration Statement, and shall reimburse the Company,
its directors and officers, and each other selling holder or such 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 in connection with the sale
of
the Registrable Securities by such selling holder pursuant to the Registration
Statement containing such untrue statement.
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.
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. 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.
UNDERWRITING
AND DISTRIBUTION.
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.
MISCELLANEOUS.
6.1
Other
Registration Rights
.
The
Company represents and warrants that except for the securities issued or
issuable upon exercise of the Purchase Option to be issued to Pali Capital,
Inc.
or its assigns, 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 in accordance with applicable law. This Agreement
and the provisions hereof shall be binding upon and shall inure to the benefit
of each of the parties, to Pali Capital, Inc. and their respective successors
and the permitted assigns of the Investor or holder of Registrable Securities
or
of any assignee of the Investor 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 following timely delivery of such
notice to a reputable air courier service with an order for next-day
delivery.
To
the Company:
|
|
FMG
Acquisition Corp.
Four
Forest Park
Second
Floor
Farmington,
CT 06032
Attn:
Gordon G. Pratt
|
;
or
|
|
|
|
|
with
a copy to:
|
|
Ellenoff
Grossman & Schole LLP
370 Lexington
Avenue
New
York, New York 10017
Attn:
Douglas S. Ellenoff, Esq.
|
;
or
|
|
|
|
|
To
an Investor, to:
|
|
[Name
of Investor]
c/o
FMG Acquisition Corp.
Four
Forest Park
Second
Floor
Farmington,
CT 06032
Attn:
Gordon G. Pratt
|
|
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 and be
valid
and enforceable.
6.5
Counterparts;
Facsimile Signatures
.
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. Facsimile signatures shall be deemed to be original signatures
for all purposes of this Agreement.
6.6
Entire
Agreement
.
This
Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitutes
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.
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, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of New York, without giving effect to
any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction. Each of the parties 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 (each, a “New York Court”), and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.
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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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.
FMG
ACQUISITION CORP.
|
|
|
By:
|
/s/
Gordon Pratt
|
|
Name:
Gordon Pratt
|
|
Title: Chief Executive Officer and President
|
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.
|
|
FMG
INVESTORS LLC
|
|
By:
|
/s/
Larry G. Swets, Jr.
|
|
Larry
G. Swets, Jr.
|
|
Managing
Member
|
|
|
|
Address:
Four Forest Park
|
|
Farmington,
CT 06032
|
|
|
/s/
John Petry
|
John
Petry
|
|
/s/
David E. Sturgess
|
David
E. Sturgess
|
|
/s/
Thomas D. Sargent
|
Thomas
D. Sargent
|
|
|
James
R. Zuhlke
|
SCHEDULE
OF BUYERS
Investor
|
|
Investors
Address
and
Facsimile Number
|
|
|
|
FMG
Investors LLC
Number
of Shares: 1,099,266
Number
of Warrants: 1,250,000
|
|
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
John
Petry
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
David
E. Sturgess
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
Updike, Kelly & Spellacy, P.C.
One
State Street
Hartford,
CT 06123
Attn:
David E. Sturgess
Facsimile
Number: (
860)
548-6067
|
|
|
|
Thomas
D. Sargent
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
|
|
|
James
R. Zuhlke
Number
of Shares: 21,035
Number
of Warrants: 0
|
|
c/o
FMG Acquisition Corp.
Four
Forest Park
Farmington,
CT 06032
Attn:
Gordon Pratt, CEO and President
Facsimile
Number: (
860)
674-1163
|
Exhibit
10.5
SUBORDINATED
REVOLVING
LINE
OF CREDIT AGREEMENT
This
Subordinated Revolving Line of Credit Agreement dated as of October 4, 2007
(this “
Agreement
”)
is
entered into by and between FMG Acquisition Corp., a Delaware corporation
(“
Borrower
”),
and
FMG Investors LLC, a Connecticut limited liability company (“
Lender
”),
with
reference to the following facts.
(a) Borrower
has been organized for the purpose of effecting a merger, capital stock
exchange, asset acquisition or other similar business combination with an
operating business (a “
Business
Combination
”).
(b) Borrower
proposes to: (a) make a public offering (the “
Public
Offering
”)
of its
securities pursuant to a registration statement (the “
Registration
Statement
”)
filed
with and to be declared effective by the Securities and Exchange Commission
(the
“
SEC
”);
(b) deposit the proceeds from the Public Offering into a trust account (the
“
Trust
Account
”)
for
the benefit of the purchasers of securities in the Public Offering, net of
offering costs, underwriting discounts and $1,200,000 of interest earned on
such
proceeds, together with $100,000 to be held outside of the Trust Account, to
be
used for general corporate purposes (such $1,300,000, the “Non-Trust Funds”), to
be held and disbursed in accordance with the terms of the Investment Management
Trust Agreement to be entered into between Borrower and Continental Stock
Transfer & Trust Company as trustee (the “
Trust
Agreement
”);
and
(c) utilize the funds in the Trust Account in connection with a Business
Combination.
(c)
Borrower may need funds (i) to pay costs and expenses prior to consummation
of a
Business Combination or (ii) to pay costs, expenses and claims in connection
with Borrower’s dissolution and the liquidation of Borrower and the Trust
Account to its public stockholders.
(d) On
the terms and subject to the conditions set forth in this Agreement, Lender
is
willing to make available to Borrower a revolving line of credit to pay certain
costs and expenses that may arise prior to a Business Combination or to pay
costs, expenses and claims in connection with Borrower’s dissolution and the
liquidation of the Trust Account to its public stockholders (the “
Loan
”).
1.
The
Loan
1.1 If
the Non-Trust Funds are insufficient for the Borrower’s working capital purposes
(including the payment of costs, expenses and claims in connection with
Borrower’s dissolution and the liquidation of Borrower and the distribution of
the Trust Account to its public stockholders), then Lender agrees to make
advances to Borrower, and Borrower agrees to repay such advances, from time
to
time in accordance with the terms and conditions of this Agreement and the
form
of revolving promissory note attached hereto as Exhibit A (the
“
Note
”);
provided, however, that notwithstanding anything to the contrary in this
Agreement, at no time shall the aggregate of all advances and readvances
outstanding under the Loan at any time exceed $250,000.
This
Agreement and the Note are each sometimes referred to in this Agreement
individually as a “
Loan
Document
,”
and
are sometimes collectively referred to as the “
Loan
Documents
.”
1.2 Lender’s
obligation to make advances shall expire upon the first to occur
of the
following:
|
|
1.2.1
|
Upon
a material breach or default of any representation, warranty or agreement
of Borrower that is not cured or corrected within 20 days of notice
of
such breach from Lender;
|
|
1.2.2
|
Upon
consummation of a Business
Combination;
|
1.2.3 If
no Business Combination is consummated, after the completion of the liquidation
of the Trust Account and Borrower’s completed and fully implemented dissolution
and distribution;
1.2.4
Thirty days after Borrower provides written notice to Lender of its termination
of this Agreement and the Loan facility, and the payment of all amounts due
hereunder to Lender.
2.
Conditions
of Advances
. Upon
reasonable advance request from Borrower, Lender shall make advances to or
as
directed by Borrower, provided that each and all of the following conditions
is
satisfied:
|
2.1
|
Borrower
shall have executed and delivered the Note to Lender, as
applicable;
|
|
2.2
|
The
aggregate amount of outstanding advances following such advance
shall not
exceed $250,000;
|
2.3
The
representations and warranties of Borrower in the Loan Documents shall be
true
and correct in all material respects;
|
2.4
|
Borrower
shall have complied in all material respects with each of its agreements
in the Loan Documents;
|
|
2.5
|
The
advances shall be used only for such purposes as are set forth
in
Section 4.1 of this Agreement;
and
|
|
2.6
|
Borrower
shall have completed the Public
Offering.
|
3.
Borrower
Representations
3.1 Borrower
represents and warrants as follows:
3.1.1 Borrower
has full power and authority to execute and deliver this Agreement and the
other
Loan Documents to be executed and delivered by it pursuant hereto and to perform
its obligations hereunder and thereunder. This Agreement and such Loan Documents
constitute the valid and legally binding obligations of the Borrower and are
enforceable against Borrower in accordance with their terms.
3.1.2 Neither
the execution and the delivery of the Loan Documents by Borrower, nor the
consummation of the transactions contemplated by the Loan Documents,
nor the borrowing by Borrower, will (a) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
Borrower is subject or any provision of the Amended and Restated Certificate
of
Incorporation or Bylaws of Borrower, or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create
in
any entity or natural person (each, a “
Person
”)
the
right to accelerate, terminate, modify, or cancel, any agreement, contract,
lease, license, instrument, or other arrangement to which Borrower is a party
or
by which it is bound or to which any of its assets are subject (or result in
the
imposition of any security interest upon any of its assets), in each case other
than where such violation, conflict, breach, default, acceleration or creation
of right would not reasonably be expected to have a material adverse effect
on
the ability of Borrower to repay amounts due under the Note in accordance with
the terms of the Loan Documents. (a “
Material
Adverse Effect
”).
3.1.3 Borrower
does not need to give any notice to, make any filing with, or obtain any
authorization, permit, certificate, registration, consent, approval or order
of
any government or governmental agency in order for the parties to consummate
the
transactions contemplated by this Agreement, except where the failure would
not
reasonably be expected to have a Material Adverse Effect.
3.1.4 The
conditions to the obligation of Lender to make the advance, as set forth in
Section 2, shall be satisfied.
3.2 Each
and every representation and warranty made by Borrower in this Agreement shall
be deemed renewed and remade upon the making of each and every advance or
readvance under the Note that Lender may make.
4.
Borrower
Covenants
. For
as long as Lender shall have a commitment to make advances or there shall be
any
outstanding balance on the Loan, without the prior consent of Lender, Borrower
shall:
4.1 use
the proceeds of any advance made hereunder only for (i) ordinary and reasonable
operating costs and expenses during the period Borrower seeks to identify,
investigate, negotiate and consummate a Business Combination, including
Borrower’s reporting obligations with the SEC, the audit and review of
Borrower’s financial statements, identifying and investigating potential targets
for a Business Combination, deposits, down payments or funding of “no-shop”
provisions in connection with a particular Business Combination, negotiating
and
closing the Business Combination, legal and other professional fees and
expenses, fees, salaries and compensation for directors, officers, employees,
consultants and advisors, and insurance premiums or (ii) to pay claims of
vendors, prospective target businesses or other entities related to 4.1(i)
and
any costs or expenses incurred in connection with Borrower’s dissolution and the
liquidation of Borrower and the distribution of the Trust Account to its public
stockholders;
4.2 not declare or pay any dividend or distribution with respect to,
or repurchase or redeem any shares of, the capital stock of Borrower, provided
that this shall not prohibit payments from the Trust Account to stockholders
of
Borrower in accordance with the Trust Agreement;
4.3 not
engage in any business other than identifying, investigating, negotiating and
closing a Business Combination;
4.4 not
make any material capital expenditure or purchase any material property or
asset
(other than office supplies and equipment); and
4.5 upon
request of Lender, provide to Lender copies of all filings with the Securities
and Exchange Commission.
5.
No
Recourse to Trust Account
Lender,
on behalf of itself and its successors and assigns, hereby acknowledges and
agrees that under no circumstance shall Lender have any right, title or interest
in or to any of the funds in the Trust Account, notwithstanding the fact that
such funds were received for the purchase and sale of securities of Borrower,
or
any funds distributed from the Trust Account other than in a Business
Combination Distribution (as defined below), and that their sole recourse for
repayment of any and all amounts due under the Note shall be against the assets
or properties of Borrower never deposited into the Trust Account or distributed
to Borrower from the Trust Account in a Business Combination Distribution.
Lender hereby irrevocably waives any claim it might have to funds in the Trust
Account, and any funds distributed from the Trust Account other than in a
Business Combination Distribution, at law or in equity, agree not to make any
such claim, and agree to indemnify and hold Borrower harmless from any such
claim made by or on behalf of Lender. For purposes of this Section 5, a
“
Business
Combination Distribution
”
means
a
distribution from the Trust Account in connection with the consummation of
a
Business Combination pursuant to the Trust Agreement.
6.
Events
of Default
. The
occurrence of any of the following shall constitute an event of default (an
“
Event
of Default
”)
hereunder and under each and every other Loan Document:
6.1 The
Borrower shall fail to pay any principal or any other amount as and when due
and
payable under any Loan Document;
6.2 Any
representation or warranty which is made or deemed made in any Loan Document
by
the Borrower shall prove to have been incorrect or misleading in any material
respect on or as of the date made or deemed made or remade;
6.3 The
Borrower shall fail to perform or observe any term, provision, covenant, or
agreement contained in any Loan Document to be performed or observed by the
Borrower (other than any payment obligation) and such failure shall continue
more than 20 days after notice thereof from Lender;
6.4 The
Borrower shall (a) generally not, or be unable to, or admit in writing its
inability to, pay its debts as such debts become due, only after the Company
has
borrowed the entire $250,000 pursuant hereto; or (b) make an assignment for
the benefit of creditors, or petition or apply to any tribunal for the
appointment of a custodian, receiver, or trustee for it or a substantial part
of
its assets; or (c) commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or
(d) have any such petition or application filed or any such proceeding
commenced against it in which an order for relief is entered or adjudication
or
appointment is made and which remains undismissed for a period of 30 days or
more; or (e) by any act or omission to act indicate consent to, approval
of, or acquiescence in any such petition, application, or proceeding, or order
for relief, or the appointment of a custodian, receiver or trustee for all
or
any such substantial part of its properties; or (f) suffer any such
custodianship, receivership, or trusteeship for all or any substantial part
of
its properties; or (g) suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of 30 days or more;
provided,
however
,
that
the adoption of a plan of dissolution and distribution and its implementation
by
the Borrower’s Board of Directors due to the failure of Borrower to complete a
Business Combination shall not in any instance be deemed an Event of Default
hereunder; or
6.5 At
any time after execution and delivery of this Agreement, and whether or not
due
to any fault of Lender, any Loan Document shall cease to be in full force and
effect and enforceable in accordance with its terms, or shall be declared null
and void.
7.
Consequences
of Default
. If
an Event of Default shall occur, Lender:
7.1 shall
have no further obligation to make advances under the Loan Documents;
and
7.2 may
declare the Note and all amounts payable under this Agreement and any other
Loan
Document to be forthwith due and payable, whereupon the Note and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by Borrower.
8.
Miscellaneous
Provisions
8.1
Notices
. All
notices, requests, demands and other communications (collectively, “
Notices
”)
given
pursuant to this Agreement shall be in writing, and shall be delivered by
personal service, courier, facsimile transmission or by United States first
class, registered or certified mail, addressed to the following addresses:
If
to Borrower:
|
|
FMG
Acquisition Corp.
|
|
|
Four
Forest Park
|
|
|
Famington,
CT 06032
|
|
|
Facsimile:
(
860)
674-1163
|
|
|
|
If
to Lender:
|
|
FMG
Investors LLC
|
|
|
Four
Forest Park
|
|
|
Famington,
CT 06032
|
|
|
Facsimile:
(
860)
674-1163
|
Any
Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails (or
on
the seventh day if sent to or from an address outside the United States). Any
party may from time to time change its address for further Notices hereunder
by
giving notice to the other party in the manner prescribed in this Section.
8.2
No
Waivers; Remedies Cumulative
.
No
failure or delay by a party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided herein
shall be cumulative and not exclusive of any rights or remedies provided by
law.
8.3
Amendments
and Waivers
.
Any
provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by Borrower and Lender.
8.4
Successors
and Assigns
.
Borrower may not assign its right or duties hereunder without the prior written
consent of Lender, which consent Lender may deny, withhold or delay in its
sole
and absolute discretion.
8.5
Governing
Law
.
This
Agreement has been made and entered into in the State of Delaware and shall
be
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
8.6
Prior
Understandings
.
This
Agreement supersedes all prior understandings and agreements (whether written,
oral or otherwise) pertaining to the subject matter hereof, and constitutes
the
entire agreement between the parties hereto relating to the subject matter
hereof and the transactions provided for herein.
8.7
Counterparts
.
This
Agreement may be executed in any number of counterparts each of which shall
be
deemed an original and all of which shall constitute one and the same agreement
with the same effect as if all parties had signed the same signature page.
The
parties shall accept facsimile signatures as the equivalent of original ones.
8.8
Severability
.
If any
provision of this Agreement or the application of such provision to any Person
or circumstance will be held invalid, the remainder of this Agreement or the
application of such provision to Persons or circumstances other than those
to
which it is held invalid will not be affected thereby.
8.9
Additional
Documents and Acts
.
Borrower shall execute and deliver such additional documents and instruments
and
shall perform such additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions, and conditions
of this Agreement and the transactions contemplated by this Agreement.
8.10
Survival
.
All
indemnities, rights, remedies, representations and warranties contained herein
shall survive the expiration or termination of this Agreement, and no
termination or expiration hereof shall relieve either party from liability
for
any breach of this Agreement.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement to
one
another as of the date first above written.
BORROWER:
|
|
FMG
ACQUISITION CORP.
|
|
|
|
|
By:
|
/s/
Gordon Pratt
|
|
|
Gordon
Pratt
|
|
|
Chief
Executive Officer
|
|
|
|
LENDER:
|
|
FMG
INVESTORS LLC
|
|
|
|
|
By:
|
/s/
Larry G. Swets, Jr.
|
|
|
Larry
G. Swets, Jr.
|
|
|
Managing
Member
|
EXHIBIT
A
REVOLVING
LINE OF CREDIT NOTE
Not
to Exceed $250,000 in Principal
|
|
___________,
2007
|
For
value
received, the undersigned
FMG
ACQUISITION CORP.
,
a
Delaware corporation (“
Borrower
”),
promises to pay, in lawful money of the United States, to the order of
FMG
INVESTORS LLC
,
together with its successors and assigns (“
Holder
”),
at
such address as Holder may direct, the principal sum of Two Hundred Fifty
Thousand Dollars ($250,000), without interest, or so much thereof as shall
have
been advanced and shall remain unpaid hereunder.
This
Note
is delivered pursuant to, and is subject to all of the terms and conditions
of,
that certain Amended and Restated Subordinated Revolving Line of Credit
Agreement dated as of ________, 2007 (the “
Loan
Agreement
”)
between Borrower and Holder. Unless otherwise defined in this Note, capitalized
terms used in this Note shall have the meanings ascribed to them in the Loan
Agreement, and in the event of any conflict between the terms of this Note
and
the terms of the Loan Agreement, the terms of the Loan Agreement shall govern.
1.
Maturity
. This
Note shall mature and become due and payable upon the earlier of an Event of
Default (after the expiration of any cure period), upon consummation of a
Business Combination or as described in Section 1 of the Loan Agreement.
2.
Prepayment
. This
Note may be repaid in whole or in part at any time without penalty or premium.
3.
Event
of Default
. Should
an Event of Default occur, Lenders shall have the rights set forth in
Section 7 of the Loan Agreement.
4.
Borrower’s
Acknowledgement
. Borrower
acknowledges that Holder is extending the credit contemplated hereby solely
as
an accommodation to Borrower, and is willing to do so in reliance upon
Borrower’s monetary and non-monetary covenants contained herein and in the Loan
Agreement.
5.
Holder’s
Acknowledgement
. The
Holder acknowledges and agrees that, as specified in Section 5 of the Loan
Agreement, the Holder has limited recourse against Borrower for repayment of
any
and all amounts due and owing under this Note.
6.
Miscellaneous
. If
this Note (or any payment due hereunder) is not paid when due, Borrower promises
to pay all costs and expenses of collection and reasonable attorneys’ fees
incurred by the Holder hereof on account of such collection whether or not
suit
is filed hereon. Borrower consents to renewals, replacements and extensions
of
time for payment hereof, before, at, or after maturity, consents to the
acceptance, release or substitution of security for this Note, and waives demand
and protest. The indebtedness evidenced hereby shall be payable in lawful money
of the United States. In any action brought under or arising out of this Note,
Borrower, including successor(s) or assign(s), hereby consents to the
application of Delaware law, to the jurisdiction of any competent court within
the State of Delaware, and to service of process by any means authorized by
Delaware law. No single or partial exercise of any power hereunder, or under
any
other Loan Document in connection herewith, shall preclude other or further
exercises thereof or the exercise of any other such power.
IN
WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date
first above written.
|
|
|
By :
|
/s/
|
Name:
|
Gordon
Pratt
|
|
|
Title:
|
Chief
Executive Officer and President
|