As
filed with the Securities and Exchange Commission on November 6, 2015
Registration No. 333-207037
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
AMENDMENT
NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT
OF 1933
__________________
ANDINA ACQUISITION CORP. II
(Exact name of registrant as specified in its constitutional
documents)
|
|
|
|
|
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
(I.R.S. Employer
Identification Number)
|
250 West
57
th
St
Suite 2223
New York, NY 10107
(646)
565-3861
(Address, including zip code, and telephone number, including area
code, of registrant’s principal executive offices)
__________________
Julio A.
Torres
Chief Executive
Officer
250 West
57
th
St
Suite 2223
New York, NY
10107
(646)
565-3861
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
__________________
Copies to:
|
David
Alan Miller, Esq.
Jeffrey M. Gallant,
Esq.
Graubard
Miller
The Chrysler
Building
405 Lexington
Avenue
New York, New York
10174
(212)
818-8800
(212) 818-8881 —
Facsimile
|
|
Robert J. Mittman, Esq.
Brad
L. Shiffman, Esq.
Blank
Rome LLP
The
Chrysler Building
405 Lexington Avenue
New York, New York 10174
Telephone: (212) 885-5555
Telecopy: (212) 885-5001
|
__________________
Approximate date of
commencement of proposed sale to the public:
As soon as
practicable after the effective date of this registration
statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box.
x
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
¨
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
|
Large accelerated filer
¨
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
x
|
(Do not check if a smaller reporting company)
CALCULATION OF
REGISTRATION FEE
Title
of each Class of Security being registered
|
|
Proposed
Maximum
Aggregate
Offering Price
(1)
|
|
Amount
of
Registration Fee
|
|
Units,
each consisting of one Ordinary Share, $.0001 par value, one Right and one Redeemable Warrant
(2)
|
|
$
|
46,000,000
|
|
$
|
5,345.20
|
|
|
Ordinary
Shares included as part of the Units
(2)
|
|
|
—
|
|
|
—
|
|
|
Rights
included as part of the Units
(2)
|
|
|
—
|
|
|
—
|
|
|
Redeemable
Warrants included as part of the Units
Shares underlying Rights included as part of Units
(2)
|
|
|
—
|
|
|
—
|
|
|
Representative’s
Unit Purchase Option
|
|
$
|
100
|
|
$
|
0.01
|
|
|
Units
underlying the Representative’s Unit Purchase Option (“Representative’s Units”)
|
|
$
|
4,000,000
|
|
$
|
464.80
|
|
|
Ordinary
Shares included as part of the Representative’s Units
|
|
|
—
|
|
|
—
|
|
|
Rights
included as part of the Representative’s Units
|
|
|
—
|
|
|
—
|
|
|
Redeemable
Warrants included as part of the Representative’s Units
Shares underlying Rights included as part of Representative’s Units
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
50,000,100
|
|
$
|
5,810.01
|
(3)
|
The registrant hereby
amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this
registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until
the registration statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.
The
information in this preliminary prospectus is not complete and may
be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities
and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
|
PRELIMINARY
PROSPECTUS
|
|
SUBJECT
TO COMPLETION, DATED
NOVEMBER
6, 2015
|
$40,000,000
Andina Acquisition Corp
. II
4,000,000
Units
Andina Acquisition Corp. II is a
Cayman Islands exempted company incorporated as a blank check
company for the purpose of entering into a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization
or similar business combination with one or more businesses or
entities. Our efforts to identify a prospective target business
will not be limited to a particular industry or geographic region,
although we intend to focus our search for target businesses in the
Andean region of South America and in Central America.
This
is an initial public offering of our securities. Each unit that we are offering has a price of $10.00 and consists of one ordinary
share,
one right and one redeemable warrant. Each right entitles
the holder thereof to receive one-seventh (1/7) of an ordinary share on the consummation of an initial business combination. Each
redeemable warrant entitles the holder thereof to purchase one-half of one ordinary share. We will not issue fractional shares.
As a result, you must exercise warrants in multiples of two warrants, at a price of $11.50 per full share, subject to adjustment
as described in this prospectus, to validly exercise your warrants. Each warrant will become exercisable on the later of the completion
of an initial business combination and 12 months from the date of this prospectus, and will expire five years after the completion
of an initial business combination, or earlier upon redemption.
We have granted EarlyBirdCapital,
Inc., the representative of the underwriters, a 45-day option to
purchase up to 600,000 units (over and above the 4,000,000 units
referred to above) solely to cover over-allotments, if
any.
Our
initial shareholders and EarlyBirdCapital (and/or their respective designees) have committed to purchase from us an aggregate
of 310,000 units (265,000 units by our initial shareholders and 45,000 units by EarlyBirdCapital), or “private units,”
at $10.00 per private unit (for a total purchase price of $3,100,000). These purchases will take place on a private placement
basis simultaneously with the consummation of this offering. All of the proceeds we receive from these purchases will be placed
in the trust account described below. Our initial shareholders and EarlyBirdCapital have also agreed that if the over-allotment
option is exercised by the underwriters, they and/or their respective designees will purchase from us at a price of $10.00 per
unit an additional number of private units (up to a maximum of
28,500
private units) pro rata with the amount of the over-allotment
option exercised so that at least $10.15 per share sold to the public in this offering is held in the trust account. These additional
private units will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from
the exercise of the over-allotment option.
There
is presently no public market for our units, ordinary shares, rights or warrants. We have applied to have our units listed on
the Nasdaq Capital Market, or Nasdaq, under the symbol “ANDAU” on or promptly after the date of this prospectus. We
cannot guarantee that our securities will be approved for listing on Nasdaq. The ordinary shares, rights and warrants comprising
the units will begin separate trading on the 90
th
day after the date of this prospectus unless EarlyBirdCapital determines that an earlier date is acceptable, subject to our filing
a Current Report on Form 8-K with the Securities and Exchange Commission, or SEC, containing an audited balance sheet reflecting
our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin.
Once the securities comprising the units begin separate trading, the ordinary shares, rights and warrants will be traded on Nasdaq
under the symbols “ANDA,” “ANDAR” and “ANDAW,” respectively. We cannot assure you that our
securities will continue to be listed on Nasdaq after this offering.
We are an “emerging growth
company” as defined in the Jumpstart Our Business Startups
Act of 2012 and have elected to comply with certain reduced public
company reporting requirements.
Investing in our securities involves a high
degree of risk. See “Risk Factors” beginning on page 17
of this prospectus for a discussion of information that should be
considered in connection with an investment in our
securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
No offer or invitation to subscribe for units
may be made to the public in the Cayman Islands.
|
|
|
|
|
Underwriting
Discount
and Commissions
(1)
|
|
Proceeds, Before
Expenses, to
us
|
|
Per unit
|
|
$
|
10.00
|
|
$
|
0.325
|
|
$
|
9.675
|
|
Total
|
|
$
|
40,000,000
|
|
$
|
1,300,000
|
|
$
|
38,700,000
|
Upon
consummation of the offering, $10.15 per unit sold to the public in this offering (whether or not the over-allotment option has
been exercised in full or part) will be deposited into a United States-based account at UBS Financial Services maintained by Continental
Stock Transfer & Trust Company, acting as trustee. Pursuant to the investment management trust agreement that will govern
the investment of such funds, the trustee, upon our written instructions, will direct UBS Financial Services to invest the funds
as set forth in such written instructions and to custody the funds while invested and until otherwise instructed in accordance
with the investment management trust agreement. Except as described in this prospectus, these funds will not be released to us
until the earlier of the completion of our initial business combination and our liquidation upon our failure to consummate a business
combination within the required time period.
We are offering the units for sale
on a firm-commitment basis. EarlyBirdCapital, Inc., acting as
representative of the underwriters, expects to deliver our
securities to investors in the offering on or about __________,
2015.
Sole Book-Running Manager
EarlyBirdCapital, Inc.
_______________,
2015
ANDINA ACQUISITION CORP.
II
TABLE OF
CONTENTS
i
PROSPECTUS
SUMMARY
This summary
highlights certain information appearing elsewhere in this
prospectus. For a more complete understanding of this offering, you
should read the entire prospectus carefully, including the risk
factors and the financial statements. Unless otherwise stated in
this prospectus:
•
“we,”
“us” or “our company” refers to Andina
Acquisition Corp. II;
•
“initial
shareholders” refers to all of our shareholders immediately
prior to the date of this prospectus, including all of our officers
and directors to the extent they hold such shares;
•
“insider
shares” refers to the 1,150,000 ordinary shares held by our
initial shareholders prior to this offering (including up to an
aggregate of 150,000 ordinary shares subject to compulsory
repurchase by us to the extent that the underwriters’
over-allotment option is not exercised in full or in
part);
•
“private units” refer to the units we are selling privately to our initial shareholders and EarlyBirdCapital
and their respective designees upon consummation of this offering and “private shares” and “private rights”
and “private warrants” refer to the shares and rights and warrants included within the private units;
•
“US
Dollars” and “$” refer to the legal currency of
the United States;
•
“Companies
Law” refers to the Companies Law (2013 Revision) of the
Cayman Islands as the same may be amended from time to
time;
•
the term
“public shareholders” means the holders of the ordinary
shares which are being sold as part of the units in this public
offering, or “public shares,” whether they are
purchased in the public offering or in the aftermarket, including
any of our initial shareholders to the extent that they purchase
such public shares (except that our initial shareholders will not
have conversion or tender rights with respect to any public shares
they own); and
•
the information in
this prospectus assumes that the underwriters will not exercise
their over-allotment option.
You should rely only
on the information contained in this prospectus. We have not
authorized anyone to provide you with different information. We are
not making an offer of these securities in any jurisdiction where
the offer is not permitted.
We are a Cayman Islands company incorporated on July 1, 2015 as an
exempted company with limited liability. Exempted companies are
Cayman Islands companies wishing to conduct business outside the
Cayman Islands and, as such, are exempted from complying with
certain provisions of the Companies Law. As an exempted company, we
have applied for and received a tax exemption undertaking from the
Cayman Islands government that, in accordance with section 6 of the
Tax Concessions Law (2011 Revision) of the Cayman Islands, for a
period of 20 years from the date of the undertaking, no law which
is enacted in the Cayman Islands imposing any tax to be levied on
profits, income, gains or appreciations shall apply to us or our
operations and, in addition, that no tax to be levied on profits,
income, gains or appreciations or which is in the nature of estate
duty or inheritance tax shall be payable (i) on or in respect of
our shares, debentures or other obligations or (ii) by way of the
withholding in whole or in part of a payment of dividend or other
distribution of income or capital by us to our shareholders or a
payment of principal or interest or other sums due under a
debenture or other obligation of us.
We were formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization,
reorganization or similar business combination with one or more
businesses or entities, which we refer to as a “target
business.” Our efforts to identify a prospective target
business will not be limited to a particular industry or geographic
location, although we intend to focus our search for target
businesses in the Andean region of South America and in Central
America. We do not have any specific business combination under
consideration and we have not (nor has anyone on our behalf),
directly or indirectly, contacted any prospective target business
or had any substantive discussions, formal or otherwise, with
respect to such a transaction.
The
Andean region is comprised of Colombia, Chile, Peru, Ecuador and Venezuela. Within this group, we are focusing on Colombia, Chile
and Peru, which offer growth rates that are above average in South America as well as stable political and macro-economic frameworks.
We intend to capitalize on opportunities presented by high growth rates within these countries, as well as in neighboring Panama
and other countries in Central America.
1
Local capital markets have been maturing in tandem with the
stabilization of domestic economic conditions, but still lack the
depth and liquidity seen in developed markets. While Andean
regional capital markets have begun to mature in recent years,
regulatory hurdles and the still-limited size of the local stock
exchanges limit the ability of local companies to gain access to
the public equity capital markets. We believe this creates
opportunities for us to connect attractive and growing companies in
the Andean region seeking capital from the U.S. capital
markets.
We will either (1) seek shareholder approval of our initial
business combination at a meeting called for such purpose at which
public shareholders may seek to convert their public shares,
regardless of whether they vote for or against the proposed
business combination, into their pro rata share of the aggregate
amount then on deposit in the trust account (net of taxes payable)
or (2) provide our public shareholders with the opportunity to sell
their public shares to us by means of a tender offer (and thereby
avoid the need for a shareholder vote) for an amount equal to their
pro rata share of the aggregate amount then on deposit in the trust
account (net of taxes payable), in each case subject to the
limitations described herein. Notwithstanding the foregoing, our
initial shareholders have agreed, pursuant to written letter
agreements with us, not to convert any public shares held by them
into their pro rata share of the aggregate amount then on deposit
in the trust account. The decision as to whether we will seek
shareholder approval of our proposed business combination or allow
shareholders to sell their shares to us in a tender offer will be
made by us, solely in our discretion, and will be based on a
variety of factors such as the timing of the transaction and
whether the terms of the transaction would otherwise require us to
seek shareholder approval. Unlike other blank check companies which
require shareholder votes and conduct proxy solicitations in
conjunction with their initial business combinations and related
conversions of public shares for cash upon consummation of such
initial business combinations even when a vote is not required by
law, we will have the flexibility to avoid such shareholder vote
and allow our shareholders to sell their shares pursuant to the
tender offer rules of the Securities and Exchange Commission, or
SEC. In that case, we will file tender offer documents with the SEC
which will contain substantially the same financial and other
information about the initial business combination as is required
under the SEC’s proxy rules. We will consummate our initial
business combination only if we have net tangible assets of at
least $5,000,001 upon such consummation and, solely if we seek
shareholder approval, a majority of the outstanding ordinary shares
voted are voted in favor of the business combination.
We
will have until 18 months from the consummation of this offering (or 21 months from the consummation of this offering if we have
entered into a letter of intent, memorandum of understanding or definitive agreement with a target business for a business combination
within 18 months from the consummation of this offering and a business combination has not yet been consummated within such 18-month
period) to consummate our initial business combination. If we are unable to consummate our initial business combination within
this time period, we will liquidate the trust account and distribute the proceeds held therein to our public shareholders and
dissolve. If we are forced to liquidate, we anticipate that we would distribute to our public shareholders the amount in the trust
account calculated as of the date that is two days prior to the distribution date (including any accrued interest). Prior to such
distribution, we would be required to assess all claims that may be potentially brought against us by our creditors for amounts
they are actually owed and make provision for such amounts, as creditors take priority over our public shareholders with respect
to amounts that are owed to them. We cannot assure you that we will properly assess all claims that may be potentially brought
against us. As such, our shareholders could potentially be liable for any claims of creditors to the extent of distributions received
by them as an unlawful payment in the event we enter an insolvent liquidation.
Pursuant to the Nasdaq listing rules, our initial business
combination must be with a target business or businesses whose
collective fair market value is at least equal to 80% of the
balance in the trust account at the time of the execution of a
definitive agreement for such business combination, although this
may entail simultaneous acquisitions of several target businesses.
The fair market value of the target will be determined by our board
of directors based upon one or more standards generally accepted by
the financial community (such as actual and potential sales,
earnings, cash flow and/or book value). Our board of directors will
have broad discretion in choosing the standard used to establish
the fair market value of any prospective target business. The
target business or businesses that we acquire may have a collective
fair market value substantially in excess of 80% of the trust
account balance.
We are not required to obtain an opinion from an unaffiliated third
party that the target business we select has a fair market value in
excess of at least 80% of the balance of the trust account unless
our board of directors cannot make such determination on its own.
We are also not required to obtain an opinion from an unaffiliated
third party indicating that the price we are paying is fair to our
shareholders from a financial point of view unless the target is
affiliated with our officers, directors, initial shareholders or
their affiliates.
We currently anticipate structuring our initial business
combination to acquire 100% of the equity interests or assets of
the target business or businesses. We may, however, structure our
initial business combination where we merge directly with
2
the target business or where we acquire less than 100% of such
interests or assets of the target business in order to meet certain
objectives of the target management team or shareholders or for
other reasons, but we will only complete such business
combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to
register as an investment company under the Investment Company Act
of 1940, as amended, or the Investment Company Act. Even if the
post-transaction company owns or acquires 50% or more of the voting
securities of the target, our shareholders prior to the business
combination may collectively own a minority interest in the
post-transaction company, depending on valuations ascribed to the
target and us in the business combination transaction. For example,
we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital
stock of a target. In this case, we could acquire a 100%
controlling interest in
the target; however, as a result of
the issuance of a substantial number of new shares, our
shareholders immediately prior to our initial business combination
could own less than a majority of our outstanding shares subsequent
to our initial business combination. If less than 100% of the
equity interests or assets of a target business or businesses are
owned or acquired by the post-transaction company, only the portion
of such business or businesses that is owned or acquired is what
will be valued for purposes of the 80% of net assets test.
Management Operating and
Investing Experience
We believe that our executive officers possess the experience,
skills and contacts necessary to source, evaluate, and execute an
attractive business combination. Several of our officers and
directors were previously officers, directors or advisors and
consultants to Andina Acquisition Corp., or Andina I, a blank check
company similar to our company that completed a business
combination in December 2013 and changed its name to Tecnoglass
Inc. We intend to leverage the contacts and relationships of our
executive officers, as well as those of our other directors, to
source, evaluate and execute business combination opportunities.
See the sections titled “
Business —
Management Operating and Investment Experience
” and
“
Management
”
for complete information on the experience of our officers and
directors. Notwithstanding the foregoing, our officers and
directors are not required to commit their full time to our affairs
and will allocate their time to other businesses. We presently
expect each of our employees to devote such amount of time as they
reasonably believe is necessary to our business (which could range
from only a few hours a week while we are trying to locate a
potential target business to a majority of their time as we move
into serious negotiations with a target business for a business
combination). The past successes of our executive officers and
directors do not guarantee that we will successfully consummate an
initial business combination.
As more fully discussed in “
Management —
Conflicts of Interest
,” if any of our officers or
directors becomes aware of a business combination opportunity that
falls within the line of business of any entity to which he has
pre-existing fiduciary or contractual obligations, he may be
required to present such business combination opportunity to such
entity prior to presenting such business combination opportunity to
us. Certain of our officers and directors currently have
pre-existing fiduciary duties or contractual obligations.
Emerging Growth Company
Status
We are an emerging growth company as defined in the Jumpstart Our
Business Startups Act of 2012 (which we refer to herein as the JOBS
Act) and will remain such for up to five years. However, if our
non-convertible debt issued within a three-year period or our total
revenues exceed $1 billion or the market value of our ordinary
shares that are held by non-affiliates exceeds $700 million on the
last day of the second fiscal quarter of any given fiscal year, we
would cease to be an emerging growth company as of the following
fiscal year. As an emerging growth company, we have elected, under
Section 107(b) of the JOBS Act, to take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities
Act of 1933, as amended, or the Securities Act, for complying with
new or revised accounting standards.
Private
Placements
In July 2015, our initial shareholders purchased an aggregate of
1,150,000 ordinary shares, which we refer to throughout this
prospectus as the “insider shares,” for an aggregate
purchase price of $25,000, or approximately $0.02 per share. The
insider shares held by our initial shareholders include an
aggregate of up to 150,000 shares subject to compulsory repurchase
by us for an aggregate purchase price of $0.01 to the extent that
the underwriters’ over-allotment option is not exercised in
full or in part, so that our initial shareholders will collectively
own 20.0% of our issued and outstanding shares after this offering
(excluding the sale of the private units and assuming our initial
shareholders do not purchase units in this offering). None of our
initial shareholders has indicated any intention to purchase units
in this offering.
3
The insider shares are identical to the ordinary shares included in
the units being sold in this offering. However, our initial
shareholders have agreed, pursuant to written letter agreements
with us, (A) to vote their insider shares (as well as any public
shares acquired in or after this offering) in favor of any proposed
business combination, (B) not to propose, or vote in favor of, an
amendment to our amended and restated memorandum and articles of
association with respect to our pre-business combination activities
prior to the consummation of such a business combination unless we
provide dissenting public shareholders with the opportunity to
convert their public shares into the right to receive cash from the
trust account in connection with any such vote, (C) not to convert
any insider shares (as well as any other shares acquired in or
after this offering) into the right to receive cash from the trust
account in connection with a shareholder vote to approve our
proposed initial business combination (or sell any shares they hold
to us in a tender offer in connection with a proposed initial
business combination) or a vote to amend the provisions of our
amended and restated memorandum and articles of association
relating to shareholders’ rights or pre-business combination
activity and (D) that the insider shares shall not participate in
any liquidating distribution upon winding up if a business
combination is not consummated. Additionally, our initial
shareholders have agreed not to transfer, assign or sell any of the
insider shares (except to certain permitted transferees) until (1)
with respect to 50% of the insider shares, the earlier of one year
after the date of the consummation of our initial business
combination and the date on which the closing price of our ordinary
shares equals or exceeds $12.50 per share (as adjusted for share
splits, share dividends, reorganizations and recapitalizations) for
any 20 trading days within any 30-trading day period commencing
after our initial business combination and (2) with respect to the
remaining 50% of the insider shares, one year after the date of the
consummation of our initial business combination, or earlier, in
either case, if, subsequent to our initial business combination, we
consummate a liquidation, merger, stock exchange or other similar
transaction which results in all of our shareholders having the
right to exchange their ordinary shares for cash, securities or
other property.
In
addition, our initial shareholders and EarlyBirdCapital have committed, pursuant to written subscription agreements with us, that
they or their respective designees will purchase from us an aggregate of 310,000 units, or “private units,” at $10.00
per unit (for a total purchase price of $3,100,000). These purchases will take place on a private placement basis simultaneously
with the consummation of this offering. Our initial shareholders and EarlyBirdCapital have also agreed that if the over-allotment
option is exercised by the underwriters, they will purchase from us at a price of $10.00 per unit an additional number of private
units (up to a maximum of 28,500 private units) pro rata with the amount of the over-allotment option exercised so that at least
$10.15 per share sold to the public in this offering is held in trust regardless of whether the over-allotment option is exercised
in full or part. These additional private units will be purchased in a private placement that will occur simultaneously with the
purchase of units resulting from the exercise of the over-allotment option. The proceeds from the private placement of the private
units will be added to the proceeds of this offering and placed in an account in the United States maintained by Continental Stock
Transfer & Trust Company, as trustee. The foregoing purchases will only be made by the purchasers if they are able to do so
in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act.
The
private units are identical to the units sold in this offering except the private warrants will be non-redeemable and may be exercised
on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees.
Additionally, because the private warrants will be issued in a private transaction, the holders and their transferees will be
allowed to exercise such warrants for cash even if a registration statement covering the ordinary shares issuable upon exercise
of such warrants is not effective and receive unregistered ordinary shares. Furthermore, the purchasers have agreed (A) to vote
the private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our
amended and restated memorandum and articles of association with respect to our pre-business combination activities prior to the
consummation of such a business combination unless we provide dissenting public shareholders with the opportunity to convert their
public shares in connection with any such vote, (C) not to convert any private shares for cash from the trust account in connection
with a shareholder vote to approve our proposed initial business combination or a vote to amend the provisions of our amended
and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity
and (D) that the private shares shall not participate in any liquidating distribution upon winding up if a business combination
is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the private units or underlying securities
(except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions
as the permitted transferees of the insider shares must agree to, each as described above) until the completion of our initial
business combination.
We
have also agreed to sell to EarlyBirdCapital (and/or its designees), for $100, an option to purchase up to a total of 400,000
units exercisable at $10.00 per unit (or an aggregate exercise price of $4,000,000) commencing on the later of the consummation
of a business combination and one year from the date of this prospectus. Since the option is not exercisable until at the earliest
the consummation of a business combination, and the rights included in the units will entitle the holder to receive ordinary
4
shares
upon consummation of a business combination, the option will effectively represent the right to purchase 457,142 ordinary shares
(which includes the 57,142 ordinary shares that will be issued for the rights included in the units) and 400,000 redeemable warrants
to purchase 200,000 ordinary shares at $11.50 per share, for $4,000,000.
Our principal executive offices are located at 250 West
57
th
Street, Suite 2223, New York, New York 10107 and our telephone
number is (646) 565-3861.
5
The Offering
In making your decision on whether to invest in our securities, you
should take into account not only the backgrounds of the members of
our management team, but also the special risks we face as a blank
check company and the fact that this offering is not being
conducted in compliance with Rule 419 promulgated under the
Securities Act. You will not be entitled to protections normally
afforded to investors in Rule 419 blank check offerings. You should
carefully consider these and the other risks set forth in the
section below entitled “Risk Factors” beginning on page
17 of this prospectus.
|
Securities
offered
|
|
4,000,000
units, at $10.00 per unit, each unit consisting of one ordinary share, one right and one redeemable warrant.
|
|
|
|
|
|
Listing
of our securities and proposed symbols
|
|
We anticipate the units, and the ordinary shares and rights once they begin separate trading, will be listed on Nasdaq under the
symbols “ANDAU,” “ANDA,” “ANDAR” and “ANDAW,” respectively.
|
|
|
|
|
|
|
|
Each
of the ordinary shares, rights and warrants may trade separately on the 90
th
day
after the date of this prospectus unless EarlyBirdCapital determines that an earlier date is acceptable (based upon, among other
things, its assessment of the relative strengths of the securities markets and small capitalization and blank check companies
in general, and the trading pattern of, and demand for, our securities in particular). In no event will EarlyBirdCapital allow
separate trading of the ordinary shares, rights and warrants until we file an audited balance sheet reflecting our receipt of
the gross proceeds of this offering.
|
|
|
|
|
|
|
|
Once
the ordinary shares, rights and warrants commence separate trading, holders will have the option to continue to hold units or
separate their units into the component pieces. Holders will need to have their brokers contact our transfer agent in order to
separate the units into separately trading ordinary shares, rights and warrants.
|
|
|
|
|
|
|
|
We
will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly upon the consummation of this
offering, which is anticipated to take place three business days from the date the units commence trading. The audited balance
sheet will reflect our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is
exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will
file an amendment to the Form 8-K or a new Form 8-K to provide updated financial information to reflect the exercise of the over-allotment
option. We will also include in the Form 8-K, or amendment thereto, or in a subsequent Form 8-K, information indicating if EarlyBirdCapital
has allowed separate trading of the ordinary shares, rights and warrants prior to the 90
th
day after the date of this prospectus.
|
|
|
|
|
|
Ordinary shares:
|
|
|
|
|
|
|
|
Number outstanding before this offering
|
|
1,150,000 shares
1
|
|
|
|
|
|
Number
to be outstanding after this offering and sale of private units
|
|
5,310,000 shares
2
|
6
|
|
|
|
|
Rights:
|
|
|
|
|
|
|
|
Number outstanding before this offering
|
|
0 rights
|
|
|
|
|
|
Number
to be outstanding after this offering and sale of private rights
|
|
4,310,000 rights
3
|
|
|
|
|
|
Terms
of the Rights
|
|
Each holder of a right will receive one-seventh
(1/7) of a share upon consummation of our initial business
combination. In the event we will not be the surviving company upon
completion of our initial business combination, each holder of a
right will be required to affirmatively convert his, her or its
rights in order to receive the 1/7 of a share underlying each right
(without paying any additional consideration) upon consummation of
the business combination. More specifically, each holder will be
required to indicate his, her or its election to convert the rights
into their underlying shares as well as to return the original
rights certificates to us. There is no length of time within which
an investor must affirmatively elect to convert the rights.
However, until a holder affirmatively elects to convert its rights,
the right certificates held by such holder will not represent the
ordinary shares they are convertible for but instead will simply
represent the right to receive such ordinary shares.
|
|
|
|
|
|
|
|
If we are unable
to complete an initial business combination within the required
time period and we redeem the public shares for the funds held in
the trust account, holders of rights will not receive any of such
funds for their rights and the rights will expire worthless.
Because we will only issue a whole number of shares, you will not
receive any fractional shares to the extent the number of rights
held by you upon consummation of our initial business combination
is not divisible by seven.
|
|
|
|
|
|
Redeemable
Warrants:
|
|
|
|
|
|
|
|
Number
outstanding before this offering
|
|
0 warrants
|
|
|
|
|
|
Number
to be outstanding after this offering and sale of private units
|
|
4,310,000 warrants
4
|
|
|
|
|
|
Exercisability
|
|
Each
warrant is exercisable for one-half of one ordinary share. Because the warrants may only be exercised for whole numbers of shares,
only an even number of warrants may be exercised at any given time.
|
|
|
|
|
7
|
Exercise
price
|
|
$11.50
per whole share. No public warrants will be exercisable for cash unless we have an effective and current registration statement
covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares.
It is our current intention to have an effective and current registration statement covering the ordinary shares issuable upon
exercise of the warrants and a current prospectus relating to such ordinary shares in effect promptly following consummation of
an initial business combination. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable
upon exercise of the public warrants is not effective within 90 days following the consummation of our initial business combination,
public warrant holders may, until such time as there is an effective registration statement and during any period when we shall
have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption
from registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering the warrants
for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares
underlying the warrants, multiplied by the difference between the exercise price of the warrants 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 ordinary shares for the 10 trading days ending on the day prior to the date of exercise. For example, if a holder held
300 warrants to purchase 150 shares and the fair market value on the date prior to exercise was $15.00, that holder would receive
35 shares without the payment of any additional cash consideration. If an exemption from registration is not available, holders
will not be able to exercise their warrants on a cashless basis.
|
|
|
|
|
|
Exercise
period
|
|
The
warrants will become exercisable on the later of the completion of an initial business combination and 12 months from the date
of this prospectus. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an
initial business combination, or earlier upon redemption.
|
|
|
|
|
|
Redemption
|
|
We
may redeem the outstanding warrants (excluding the private warrants but including any outstanding warrants issued upon exercise
of the unit purchase option issued to EarlyBirdCapital), in whole and not in part, at a price of $0.01 per warrant:
•
at any time while the warrants are exercisable,
•
upon a minimum of 30 days’ prior written notice of redemption,
•
if, and only if, the last sales price of our ordinary shares equals or exceeds $24.00 per share for any 20 trading days within
a 30 trading day period ending three business days before we send the notice of redemption, and
•
if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants
at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until
the date of redemption.
|
|
|
|
|
|
|
|
If
the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant
prior to the scheduled redemption date. However, the price of the ordinary shares may fall below the $24.00 trigger price as well
as the $11.50 warrant exercise price after the redemption notice is issued.
|
|
|
|
|
8
|
|
|
The
redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable
premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant
exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share
price to drop below the exercise price of the warrants.
|
|
|
|
|
|
|
|
If
we call the warrants for redemption as described above, our management will have the option to require all holders that wish to
exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering
the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary
shares underlying the warrants, multiplied by the difference between the exercise price of the warrants 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 ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the
notice of redemption is sent to the holders of warrants. Whether we will exercise our option to require all holders to exercise
their warrants on a “cashless basis” will depend on a variety of factors including the price of our ordinary shares
at the time the warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.
|
|
|
|
|
|
Offering
proceeds to be held in trust
|
|
$37,500,000
of the net proceeds of this offering (or $43,305,000 if the over-allotment option is exercised in full), plus the $3,100,000 we
will receive from the sale of the private units (or $3,385,000 if the over-allotment option is exercised in full), for an aggregate
of $40,600,000 (or an aggregate of $46,690,000 if the over-allotment option is exercised in full), or $10.15 per unit sold to
the public in this offering (regardless of whether or not the over-allotment option is exercised in full or part) will be placed
in a trust account at UBS Financial Services in the United States, maintained by Continental Stock Transfer & Trust Company,
acting as trustee pursuant to an agreement to be signed on the date of this prospectus. Pursuant to the investment management
trust agreement that will govern the investment of such funds, the trustee, upon our written instructions, will direct UBS Financial
Services to invest the funds as set forth in such written instructions and to custody the funds while invested and until otherwise
instructed in accordance with the investment management trust agreement. The remaining $750,000 of net proceeds of this offering
will not be held in the trust account.
|
|
|
|
|
|
|
|
Except as set forth below, the proceeds in the
trust account will not be released until the earlier of the
completion of an initial business combination within the required
time period or our entry into liquidation if we have not completed
a business combination in the required time period. Therefore,
unless and until an initial business combination is consummated,
the proceeds held in the trust account will not be available for
our use for any expenses related to this offering or expenses which
we may incur related to the investigation and selection of a target
business and the negotiation of an agreement to acquire a target
business.
|
|
|
|
|
9
|
|
|
Notwithstanding
the foregoing, there can be released to us from the trust account (i) any interest earned on the funds in the trust account that
we need to pay our income or other tax obligations and (ii) any remaining interest earned on the funds in the trust account that
we need for our working capital requirements. With these exceptions, expenses incurred by us may be paid prior to a business combination
only from the net proceeds of this offering not held in the trust account (estimated to initially be $ 750,000); provided, however,
that in order to meet our working capital needs following the consummation of this offering if the funds not held in the trust
account and interest earned on the funds held in the trust account available to us are insufficient, our initial shareholders,
officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in
whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would
either be paid upon consummation of our initial business combination, without interest, or, at the lender’s discretion,
up to $500,000 of the notes may be converted upon consummation of our business combination into additional private units at a
price of $10.00 per unit (which, for example, would result in the holders being issued 57,142 ordinary shares if $500,000 of notes
were so converted as the rights included in the units would result in an additional 7,142 shares being issued, as well as 50,000
warrants to purchase 25,000 shares). Our shareholders have approved the issuance of the private rights (and underlying ordinary
shares) upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our
initial business combination. If we do not complete a business combination, the loans would not be repaid.
|
|
|
|
|
|
Limited payments to insiders
|
|
Prior to the consummation of a business
combination, there will be no fees, reimbursements or other cash
payments paid to our initial shareholders, officers, directors or
their affiliates prior to, or for any services they render in order
to effectuate, the consummation of a business combination
(regardless of the type of transaction that it is) other
than:
•
repayment at the closing of this offering of an aggregate of $___
of advances made by B. Luke Weil, one of our directors;
•
payment of consulting fees to our officers, directors, shareholders
or their affiliates for assisting us in consummating our initial
business combination in an amount not to exceed an aggregate of
$_____; and
•
reimbursement of out-of-pocket expenses incurred by them in
connection with certain activities on our behalf, such as
identifying and investigating possible business targets and
business combinations.
|
|
|
|
|
|
|
|
There is no limit on the amount of out-of-pocket
expenses reimbursable by us; provided, however, that to the extent
such expenses exceed the available proceeds not deposited in the
trust account and the interest income earned on the amounts held in
the trust account available to us, such expenses would not be
reimbursed by us unless we consummate an initial business
combination. Our audit committee will review and approve all
reimbursements and payments made to any initial shareholder or
member of our management team, or our or their respective
affiliates, and any reimbursements and payments made to members of
our audit committee will be reviewed and approved by our Board of
Directors, with any interested director abstaining from such review
and approval.
|
10
|
Shareholder approval of, or tender offer in connection
with, initial business combination
|
|
In connection with any proposed initial business combination, we
will either (1) seek shareholder approval of such initial business
combination at a meeting called for such purpose at which public
shareholders may seek to convert their public shares, regardless of
whether they vote for or against the proposed business combination,
into their pro rata share of the aggregate amount then on deposit
in the trust account (net of taxes payable) or (2) provide our
public shareholders with the opportunity to sell their public
shares to us by means of a tender offer (and thereby avoid the need
for a shareholder vote) for an amount equal to their pro rata share
of the aggregate amount then on deposit in the trust account (net
of taxes payable), in each case subject to the limitations
described herein. Notwithstanding the foregoing, our initial
shareholders have agreed, pursuant to written letter agreements
with us, not to convert any public shares held by them into their
pro rata share of the aggregate amount then on deposit in the trust
account. If we determine to engage in a tender offer, such tender
offer will be structured so that each public shareholder may tender
any or all of his, her or its public shares rather than some pro
rata portion of his, her or its shares. If enough shareholders
tender their shares so that we are unable to satisfy any applicable
closing condition set forth in the definitive agreement related to
our initial business combination, or we are unable to maintain net
tangible assets of at least $5,000,001, we will not consummate such
initial business combination. The decision as to whether we will
seek shareholder approval of a proposed business combination or
will allow shareholders to sell their shares to us in a tender
offer will be made by us based on a variety of factors such as the
timing of the transaction, whether the terms of the transaction
would otherwise require us to seek shareholder approval or whether
we were deemed to be a foreign private issuer (which would require
us to conduct a tender offer rather than seeking shareholder
approval under SEC rules). Unlike other blank check companies which
require shareholder votes and conduct proxy solicitations in
conjunction with their initial business combinations and related
conversions of public shares for cash upon consummation of such
initial business combinations even when a vote is not required by
law, we will have the flexibility to avoid such shareholder vote
and allow our shareholders to sell their shares pursuant to Rule
13e-4 and Regulation 14E of the Securities Exchange Act of 1934, as
amended, or Exchange Act, which regulate issuer tender offers. In
that case, we will file tender offer documents with the SEC which
will contain substantially the same financial and other information
about the initial business combination as is required under the
SEC’s proxy rules. We will consummate our initial business
combination only if we have net tangible assets of at least
$5,000,001 upon such consummation and, solely if we seek
shareholder approval, a majority of the outstanding ordinary shares
voted are voted in favor of the business combination.
|
|
|
|
|
|
|
|
We have determined not to consummate any
business combination unless we have net tangible assets of at least
$5,000,001 upon such consummation in order to avoid being subject
to Rule 419 promulgated under the Securities Act. The $5,000,001
net tangible asset value would be determined once a target business
is located and we can assess all of the assets and liabilities of
the combined company (which would include the fee payable to
EarlyBirdCapital in an amount equal to 4.0% of the total gross
proceeds raised in the offering as described elsewhere in this
prospectus, any out-of-pocket expenses incurred by our initial
shareholders, officers, directors or their affiliates in connection
with certain activities on our behalf, such as identifying and
investigating possible business targets and business combinations
that have not been repaid at that time, as well as any other
liabilities of ours and the liabilities of the target
business).
|
|
|
|
|
11
|
|
|
However, if we seek to consummate a business
combination with a target business that imposes any type of working
capital closing condition or requires us to have a minimum amount
of funds available from the trust account upon consummation of such
business combination, the net tangible asset requirement may limit
our ability to consummate such a business combination and may force
us to seek third party financing which may not be available on
terms acceptable to us or at all. As a result, we may not be able
to consummate such business combination and we may not be able to
locate another suitable target within the applicable time period,
if at all.
|
|
|
|
|
|
|
|
Our
initial shareholders have agreed (i) to vote their insider shares, private shares and any public shares purchased in or
after this offering in favor of any proposed business combination and (ii) not to convert any shares (including the insider
shares) in connection with a shareholder vote to approve, or sell their shares to us in any tender offer in connection with,
a proposed initial business combination; provided that Mendakota Casualty Company and Bob Goldstein, two initial shareholders, would be allowed to convert or sell to us any
public shares they purchase in this offering or in the aftermarket. EarlyBirdCapital has also agreed to vote their private
shares in favor of any proposed business combination. As a result, if we sought shareholder approval of a proposed
transaction, we would need only 1,345,001 (or approximately 33.6%) of the 4,000,000 public shares sold in this offering to be
voted in favor of the transaction in order to have such transaction approved (assuming the over-allotment option is not
exercised and the initial shareholders do not purchase any units in this offering or units or shares in the after market).
None of our officers, directors, initial shareholders or their affiliates has indicated any intention to purchase units in
this offering or any units or ordinary shares in the open market or in private transactions. However, if a significant number
of shareholders vote, or indicate an intention to vote, against a proposed business combination, our officers, directors,
initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to
influence the vote. There is no limit on the amount of shares that may be purchased by the insiders. Any purchases would be
made in compliance with federal securities laws, including the fact that all material information will be made public prior
to such purchase, and no purchases would be made if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the
Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
|
|
|
|
|
|
|
|
Public
shareholders who convert their public shares or sell their public shares to us in a tender offer will still retain one right to
receive one-seventh of a share for each right held (provided that we will not issue any fractional shares to the extent that the
number of rights held by a holder is not divisible by seven) and continue to have the right to exercise any warrants they may
hold if the business combination is consummated. If the business combination is not consummated, public shareholders will not
be entitled to convert their public shares.
|
|
|
|
|
|
Conversion rights
|
|
In connection with any shareholder meeting
called to approve a proposed initial business combination, each
public shareholder will have the right, regardless of whether he is
voting for or against such proposed business combination, to demand
that we convert his public shares into a pro rata share of the
trust account upon consummation of the business
combination.
|
|
|
|
|
12
|
|
|
Notwithstanding the foregoing, a public
shareholder, together with any affiliate of his or any other person
with whom he is acting in concert or as a “group” (as
defined in Section 13(d)(3) of the Exchange Act) will be restricted
from seeking conversion rights with respect to 20% or more of the
ordinary shares sold in this offering. Accordingly, all shares
purchased by a holder in excess of 20% of the shares sold in this
offering will not be converted to cash. We believe this restriction
will prevent an individual shareholder or “group” from
accumulating large blocks of shares before the vote held to approve
a proposed business combination and attempt to use the conversion
right as a means to force us or our management to purchase its
shares at a significant premium to the then current market price.
By limiting a shareholder’s ability to convert no more than
20% of the ordinary shares sold in this offering, we believe we
have limited the ability of a small group of shareholders to
unreasonably attempt to block a transaction which is favored by our
other public shareholders.
|
|
|
|
|
|
|
|
We may also require public shareholders wishing
to exercise conversion rights, whether they are a record holder or
hold their shares in “street name,” to either tender
the certificates they are seeking to convert to our transfer agent
or to deliver the shares they are seeking to convert to the
transfer agent electronically using Depository Trust
Company’s DWAC (Deposit/Withdrawal At Custodian) System, at
the holder’s option, at any time at or prior to the vote on
the business combination. There is a nominal cost associated with
this tendering process and the act of certificating the shares or
delivering them through the DWAC System. The transfer agent will
typically charge the tendering broker $45 and it would be up to the
broker whether or not to pass this cost on to the converting
holder. The foregoing is different from the procedures used by
traditional blank check companies. In order to perfect conversion
rights in connection with their business combinations, many
traditional blank check companies would distribute proxy materials
for the shareholders’ vote on an initial business
combination, and a holder could simply vote against a proposed
business combination and check a box on the proxy card indicating
such holder was seeking to exercise its conversion rights. After
the business combination was approved, the company would contact
such shareholder to arrange for it to deliver its certificate to
verify ownership. As a result, the shareholder then had an
“option window” after the consummation of the business
combination during which it could monitor the price of the
company’s stock in the market. If the price rose above the
conversion price, it could sell its shares in the open market
before actually delivering his shares to the company for
cancellation. As a result, the conversion rights, to which
shareholders were aware they needed to commit before the
shareholder meeting, would become an “option” right
surviving past the consummation of the business combination until
the converting holder delivered its certificate. The requirement
for physical or electronic delivery prior to the closing of the
shareholder meeting ensures that a holder’s election to
convert is irrevocable once the business combination is
completed.
|
|
|
|
|
|
|
|
Pursuant to our amended and restated memorandum
and articles of association, we are required to give a minimum of
only ten days’ notice for each general meeting. As a result,
if we require public shareholders who wish to convert their
ordinary shares into the right to receive a pro rata portion of the
funds in the trust account to comply with the foregoing delivery
requirements, holders may not have sufficient time to receive the
notice and deliver their shares for conversion. Accordingly,
investors may not be able to exercise their conversion rights and
may be forced to retain our securities when they otherwise would
not want to.
|
|
|
|
|
13
|
|
|
If we require public shareholders who wish to
convert their ordinary shares to comply with specific delivery
requirements for conversion described above and such proposed
business combination is not consummated, we will promptly return
such certificates to the tendering public shareholders.
|
|
|
|
|
|
|
|
Please see the risk factors titled
“
In connection with
any shareholder meeting called to approve a proposed initial
business combination, we may require shareholders who wish to
convert their shares in connection with a proposed business
combination to comply with specific requirements for conversion
that may make it more difficult for them to exercise their
conversion rights prior to the deadline for exercising their
rights
” and “
If we require public
shareholders who wish to convert their ordinary shares to comply
with the delivery requirements for conversion, such converting
shareholders may be unable to sell their securities when they wish
to in the event that the proposed business combination is not
approved
.”
|
|
|
|
|
|
|
|
Once the shares are converted by the beneficial
holder, and effectively repurchased by us under Cayman Islands law,
the transfer agent will then update our Register of Shareholders to
reflect all conversions.
|
|
|
|
|
|
Automatic
liquidation if no business combination
|
|
As described above, if we fail to consummate a business combination within 18 months from the consummation of this offering (or
21 months if the extension criteria described elsewhere in this prospectus has been met), it will trigger our automatic winding
up, dissolution and liquidation pursuant to the terms of our amended and restated memorandum and articles of association. As a
result, this has the same effect as if we had formally gone through a voluntary liquidation procedure under the Companies Law.
Accordingly, no vote would be required from our shareholders to commence such a voluntary winding up, dissolution and liquidation.
|
|
|
|
|
|
|
|
The amount in the trust account (less $400
representing the aggregate nominal par value of the shares of our
public shareholders) under the Companies Law will be treated as
share premium which is distributable under the Companies Law
provided that immediately following the date on which the proposed
distribution is to be made, we are able to pay our debts as they
fall due in the ordinary course of business. If we are forced to
liquidate, we anticipate that we would distribute to our public
shareholders the amount in the trust account calculated as of the
date that is two days prior to the distribution date (including any
accrued interest).
|
14
|
|
|
Prior to such distribution, we would be required
to assess all claims that may be potentially brought against us by
our creditors for amounts they are actually owed and make provision
for such amounts, as creditors take priority over our public
shareholders with respect to amounts that are owed to them. We
cannot assure you that we will properly assess all claims that may
be potentially brought against us. As such, our shareholders could
potentially be liable for any claims of creditors to the extent of
distributions received by them as an unlawful payment in the event
we enter an insolvent liquidation. Furthermore, while we will seek
to have all vendors and service providers (which would include any
third parties we engaged to assist us in any way in connection with
our search for a target business) and prospective target businesses
execute agreements with us waiving any right, title, interest or
claim of any kind they may have in or to any monies held in the
trust account, there is no guarantee that they will execute such
agreements. Nor is there any guarantee that, even if such entities
execute such agreements with us, they will not seek recourse
against the trust account or that a court would conclude that such
agreements are legally enforceable.
|
|
|
|
|
|
|
|
The holders of the insider shares, private
shares and private rights will not participate in any liquidation
distribution with respect to such securities.
|
|
|
|
|
|
|
|
B.
Luke Weil has contractually agreed pursuant to a written agreement with us that, if we liquidate the trust account prior to the
consummation of a business combination, he will be personally liable to ensure that the proceeds in the trust account are not
reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered
or contracted for or products sold to us. Accordingly, if a claim brought by a target business or vendor did not exceed the amount
of funds available to us outside of the trust account or available to be released to us from interest earned on the trust account
balance, Luke Weil would not have any obligation to indemnify such claims as they would be paid from such available funds. However,
if a claim exceeded such amounts, the only exceptions to Luke’s obligations to pay such claim would be if the party executed
an agreement waiving any right, title, interest or claim of any kind they have in or to any monies held in the trust account.
We cannot assure you that Luke Weil will be able to satisfy these obligations if he is required to do so. Therefore, we cannot
assure you that the per-share distribution from the trust account, if we liquidate the trust account because we have not completed
a business combination within the required time period, will not be less than $10.15.
|
|
|
|
|
|
|
|
We will pay the costs of liquidating the trust
account from our remaining assets outside of the trust account. If
such funds are insufficient, Mr. Weil has contractually agreed to
advance us the funds necessary to complete such liquidation
(currently anticipated to be no more than approximately $15,000)
and has contractually agreed not to seek repayment for such
expenses.
|
R
isks
In making your decision on whether to invest in our securities, you
should take into account the special risks we face as a blank check
company, as well as the fact that this offering is not being
conducted in compliance with Rule 419 promulgated under the
Securities Act and, therefore, you will not be entitled to
protections normally afforded to investors in Rule 419 blank check
offerings. For additional information concerning how Rule 419 blank
check offerings differ from this offering, please see
“
Proposed Business
— Comparison to offerings of blank check companies subject to
Rule 419
.” You should carefully consider these and the
other risks set forth in the section entitled “
Risk
Factors
” beginning on page 17 of this prospectus.
15
SUMMARY FINANCIAL
DATA
The following table summarizes the relevant financial data for our
business and should be read with our financial statements, which
are included in this prospectus. We have not had any significant
operations to date, so only balance sheet data are presented.
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
Working
capital (deficiency)
|
|
$
|
(34,077
|
)
|
|
$
|
41,366,023
|
|
Total
assets
|
|
|
50,000
|
|
|
|
41,366,023
|
|
Total
liabilities
|
|
|
34,077
|
|
|
|
—
|
|
Value
of ordinary shares subject to possible conversion/tender
|
|
|
—
|
|
|
|
36,366,019
|
|
Shareholders’
equity
|
|
$
|
15,923
|
|
|
$
|
5,000,004
|
The “as adjusted” information gives effect to the sale
of the units we are offering, including the application of the
related gross proceeds and the payment of the estimated remaining
costs from such sale and the repayment of the accrued and other
liabilities required to be repaid.
The
“as adjusted” working capital and total assets amounts include the $40,600,000 to be held in the trust account, which,
except for limited situations described in this prospectus, will be available to us only upon the consummation of a business combination
within the time period described in this prospectus. If a business combination is not so consummated, the trust account, less
amounts we are permitted to withdraw as described in this prospectus, will be distributed solely to our public shareholders (subject
to our obligations under Cayman Islands law to provide for claims of creditors).
We will consummate our initial business combination only if we have
net tangible assets of at least $5,000,001 upon such consummation
and, solely if we seek shareholder approval, a majority of the
outstanding ordinary shares voted are voted in favor of the
business combination.
16
R
ISK
FACTORS
An investment in our securities involves a high degree of risk. You
should consider carefully the material risks described below, which
we believe represent the material risks related to the offering,
together with the other information contained in this prospectus,
before making a decision to invest in our units. This prospectus
also contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from
those anticipated in the forward-looking statements as a result of
specific factors, including the risks described below.
Risks Associated with
Our Business
We have no operating history and, accordingly, you will not have
any basis on which to evaluate our ability to achieve our business
objective.
We have no operating results to date. Therefore, our ability to
commence operations is dependent upon obtaining financing through
the public offering of our securities. Since we do not have an
operating history, you will have no basis upon which to evaluate
our ability to achieve our business objective, which is to acquire
an operating business. We have not conducted any discussions and we
have no plans, arrangements or understandings with any prospective
acquisition candidates. We will not generate any revenues until, at
the earliest, after the consummation of a business combination.
Our independent registered public accounting firm’s report
contains an explanatory paragraph that expresses substantial doubt
about our ability to continue as a “going
concern.”
The report of our independent registered public accountants on our
financial statements includes an explanatory paragraph stating that
our ability to continue as a going concern is dependent on the
consummation of this offering. The financial statements do not
include any adjustments that might result from our inability to
consummate this offering or our ability to continue as a going
concern. Moreover, there is no assurance that we will consummate
our initial business combination. These factors raise substantial
doubt about our ability to continue as a going concern.
If
we are unable to consummate a business combination, our public shareholders may be forced to wait more than 21 months before receiving
liquidation distributions.
We
have 18 months from the consummation of this offering in which to complete a business combination (or 21 months from the consummation
of this offering if we have entered into a letter of intent, memorandum of understanding or definitive agreement with a target
business for a business combination within 18 months from the consummation of this offering and a business combination has not
yet been consummated within such 18-month period). We have no obligation to return funds to investors prior to such date unless
we consummate a business combination prior thereto and only then in cases where investors have sought to convert their shares.
Only after the expiration of this full time period will public shareholders be entitled to liquidation distributions if we are
unable to complete a business combination. Accordingly, investors’ funds may be unavailable to them until after such date
and to liquidate your investment, you may be forced to sell your securities potentially at a loss.
The
requirement that we complete an initial business combination within a specific period of time may give potential target businesses
leverage over us in negotiating a business transaction.
We
have 18 months from the consummation of this offering to complete an initial business combination (or 21 months from the consummation
of this offering if we have entered into a letter of intent, memorandum of understanding or definitive agreement with a target
business for a business combination within 18 months from the consummation of this offering and a business combination has not
yet been consummated within such 18-month period). Any potential target business with which we enter into negotiations concerning
a business combination will be aware of this requirement. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete a business combination with that particular target business, we may
be unable to complete a business combination with any other target business. This risk will increase as we get closer to the time
limits referenced above.
You will not be entitled to protections normally afforded to
investors of blank check companies.
Since
the net proceeds of this offering are intended to be used to complete a business combination with a target business that has not
been identified, we may be deemed to be a “blank check” company under the United States securities laws. However,
since we will have net tangible assets in excess of $5,000,000 upon the successful consummation of this offering and will file
a
17
Current
Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC
to protect investors of blank check companies such as Rule 419. Accordingly, investors will not be afforded the benefits or protections
of those rules which would, for example, completely restrict the transferability of our securities, restrict the use of interest
earned on the funds held in the trust account and require us to complete a business combination within 18 months from the closing
of the offering. Because we are not subject to Rule 419, our units will be immediately tradable, we will be entitled to withdraw
amounts from the funds held in the trust account prior to the completion of a business combination and we may have more time to
complete an initial business combination.
We may issue ordinary or preferred shares or debt securities to
complete a business combination, which would reduce the equity
interest of our shareholders and likely cause a change in control
of our ownership.
Our
memorandum and articles of association currently authorize the issuance of up to 100,000,000 ordinary shares, par value $.0001
per share, and 1,000,000 preferred shares, par value $.0001 per share. Immediately after this offering and the purchase of the
private units (assuming no exercise of the underwriters’ over-allotment option), there will be 91,262,145 authorized but
unissued ordinary shares available for issuance (after appropriate reservation for the issuance of the shares underlying the private
units and public and private rights and public and private warrants and the issuance of the securities underlying the underwriters’
purchase option). Although we have no commitment as of the date of this offering, we may issue a substantial number of additional
ordinary shares or preferred shares, or a combination of ordinary shares and preferred shares, to complete a business combination.
The issuance of additional ordinary shares or preferred shares:
•
may significantly reduce the equity interest of investors in this
offering;
•
may subordinate the rights of holders of ordinary shares if we
issue preferred shares with rights senior to those afforded to our
ordinary shares;
•
may cause a change in control if a substantial number of ordinary
shares are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and
could result in the resignation or removal of our present officers
and directors; and
•
may adversely affect prevailing market prices for our ordinary
shares.
Similarly, if we issue debt securities, it could result in:
•
default and foreclosure on our assets if our operating revenues
after a business combination are insufficient to repay our debt
obligations;
•
acceleration of our obligations to repay the indebtedness even if
we make all principal and interest payments when due if we breach
certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that
covenant;
•
our immediate payment of all principal and accrued interest, if
any, if the debt security is payable on demand; and
•
our inability to obtain necessary additional financing if the debt
security contains covenants restricting our ability to obtain such
financing while the debt security is outstanding.
The funds held in the trust account may not earn significant
interest and, as a result, we may be limited to the funds held
outside of the trust account to fund our search for target
businesses, to pay our tax obligations and to complete our initial
business combination.
Of the net proceeds of this offering, approximately $750,000 will
be available to us initially outside the trust account to fund our
working capital requirements (of which $250,000 will be paid to B.
Riley & Co. LLC (“B, Riley & Co.”) upon
consummation of this offering as described elsewhere herein). We
will depend on sufficient interest being earned on the proceeds
held in the trust account to provide us with additional working
capital we will need to identify one or more target businesses and
to complete our initial business combination, as well as to pay any
tax obligations that we may owe. Interest rates on permissible
investments for us have been less than 1% over the last several
years. Accordingly, if we do not earn a sufficient amount of
interest on the funds held in the trust account and use all of the
funds held outside of the trust account, we may not have sufficient
funds available with which to structure, negotiate or close an
initial business combination. In such event, we may be forced to
cease searching for a target business.
18
We may be unable to obtain additional financing, if required, to
complete a business combination or to fund the operations and
growth of the target business, which could compel us to restructure
or abandon a particular business combination.
Since we have not yet identified any prospective target business,
we cannot ascertain the capital requirements for any particular
transaction. If the net proceeds of this offering prove to be
insufficient, either because of the size of the business
combination, the depletion of the available net proceeds in search
of a target business, or the obligation to convert into cash (or
purchase in any tender offer) a significant number of shares from
dissenting shareholders, we will be required to seek additional
financing. Such financing may not be available on acceptable terms,
if at all. To the extent that additional financing proves to be
unavailable when needed to consummate a particular business
combination, we would be compelled to either restructure the
transaction or abandon that particular business combination and
seek an alternative target business candidate. In addition, if we
consummate a business combination, we may require additional
financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target
business. None of our officers, directors or shareholders is
required to provide any financing to us in connection with or after
a business combination.
If
third parties bring claims against us, the proceeds held in trust could be reduced and the per-share liquidation price received
by shareholders may be less than $10.15.
Our
placing of funds in trust may not protect those funds from third party claims against us. Although we will seek to have all vendors
and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders,
they may not execute such agreements. Furthermore, even if such entities execute such agreements with us, they may seek recourse
against the monies held in the trust account. A court may not uphold the validity of such agreements. Accordingly, the proceeds
held in trust could be subject to claims which could take priority over those of our public shareholders. If we liquidate the
trust account before the completion of a business combination, B. Luke Weil has agreed that he will be personally liable to ensure
that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities
that are owed money by us for services rendered or contracted for or products sold to us and which have not executed a waiver
agreement. However, he may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in
such a situation may be less than $10.15, plus interest, due to such claims.
Additionally,
if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if
we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our
public shareholders at least $10.15 per share.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them.
Our
amended and restated memorandum and articles of association provide that we will continue in existence only until 18 (or 21) months
from the consummation of this offering if a business combination has not been consummated by such time. If we are unable to complete
an initial business combination during such time period, it will trigger our automatic winding up, dissolution and liquidation.
As such, our shareholders could potentially be liable for any claims to the extent of distributions received by them pursuant
to such process and any liability of our shareholders may extend beyond the date of such distribution. Accordingly, we cannot
assure you that third parties, or us under the control of an official liquidator, will not seek to recover from our shareholders
amounts owed to them by us.
If we are unable to consummate a transaction within the required
time period, upon notice from us, the trustee of the trust account
will distribute the amount in our trust account to our public
shareholders. Concurrently, we shall pay, or reserve for payment,
from funds not held in trust, our liabilities and obligations,
although we cannot assure you that there will be sufficient funds
for such purpose. If there are insufficient funds held outside the
trust account for such purpose, B. Luke Weil has agreed that he
will be personally liable to ensure that the proceeds in the trust
account are not reduced by the claims of target businesses or
claims of vendors or other entities that are owed money by us for
services rendered or contracted for or products sold to us and
which have not executed a waiver agreement.
If we are forced to enter into an insolvent liquidation, any
distributions received by shareholders could be viewed as an
unlawful payment if it was proved that immediately following the
date on which the distribution was made, we were unable to pay our
debts as they fall due in the ordinary course of business. As a
result, a liquidator could seek to recover all amounts received
19
by our shareholders. Furthermore, our directors may be viewed as
having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, thereby exposing themselves and
our company to claims, by paying public shareholders from the trust
account prior to addressing the claims of creditors. We cannot
assure you that claims will not be brought against us for these
reasons. We and our directors and officers who knowingly and
willfully authorized or permitted any distribution to be paid out
of our share premium account while we were unable to pay our debts
as they fall due in the ordinary course of business would be guilty
of an offense and may be liable to pay a fine of US$15,000 and
subject to imprisonment for five years in the Cayman Islands.
Holders
of rights and warrants will not have redemption rights if we are unable to complete an initial business combination within the
required time period.
If
we are unable to complete an initial business combination within the required time period and we redeem the funds held in the
trust account, the rights and warrants will expire and holders will not receive any of such proceeds with respect to such rights.
We
have no obligation to net cash settle the rights and warrants.
In
no event will we have any obligation to net cash settle the rights and warrants. Furthermore, there are no contractual penalties
for failure to deliver securities to the holders of the rights upon consummation of an initial business combination. Accordingly,
the rights and warrants may expire worthless.
We may amend the terms of the rights in a way that may be adverse
to holders with the approval by the holders of a majority of the
then outstanding rights.
Our rights will be issued in registered form under a rights
agreement between Continental Stock Transfer & Trust Company,
as rights agent, and us. The rights agreement provides that the
terms of the rights may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision.
The rights agreement requires the approval by the holders of a
majority of the then outstanding rights (including the private
rights) in order to make any change that adversely affects the
interests of the registered holders.
If
we do not maintain a current and effective prospectus relating to the ordinary shares issuable upon exercise of the redeemable
warrants, public holders will only be able to exercise such redeemable warrants on a “cashless basis” which would
result in a fewer number of shares being issued to the holder had such holder exercised the redeemable warrants for cash.
Except
as set forth below, if we do not maintain a current and effective prospectus relating to the ordinary shares issuable upon exercise
of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless
basis” provided that an exemption from registration is available. As a result, the number of ordinary shares that a holder
will receive upon exercise of its warrants will be fewer than it would have been had such holder exercised its warrant for cash.
Further, if an exemption from registration is not available, holders would not be able to exercise their warrants on a cashless
basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the ordinary
shares issuable upon exercise of the warrants is available. Under the terms of the warrant agreement, we have agreed to use our
best efforts to meet these conditions and to maintain a current and effective prospectus relating to the ordinary shares issuable
upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so.
If we are unable to do so, the potential “upside” of the holder’s investment in our company may be reduced or
the warrants may expire worthless. Notwithstanding the foregoing, the private warrants may be exercisable for unregistered ordinary
shares for cash even if the prospectus relating to the ordinary shares issuable upon exercise of the warrants is not current and
effective.
An
investor will only be able to exercise a warrant if the issuance of ordinary shares upon such exercise has been registered or
qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.
No
warrants will be exercisable for cash and we will not be obligated to issue ordinary shares unless the ordinary shares issuable
upon such exercise have been registered or qualified or deemed to be exempt under the securities laws of the state of residence
of the holder of the warrants. At the time that the warrants become exercisable, we expect to continue to be listed on a national
securities exchange, which would provide an exemption from registration in every state. However, we cannot assure you of this
fact. If the ordinary shares issuable upon exercise of the warrants are not qualified or exempt from qualification in the jurisdictions
in which the holders of the warrants reside, the warrants may be deprived of any value, the market for the warrants may be limited
and they may expire worthless if they cannot be sold.
20
Our
management’s ability to require holders of our redeemable warrants to exercise such redeemable warrants on a cashless basis
will cause holders to receive fewer ordinary shares upon their exercise of the redeemable warrants than they would have received
had they been able to exercise their redeemable warrants for cash.
If
we call our warrants for redemption after the redemption criteria described elsewhere in this prospectus have been satisfied,
our management will have the option to require any holder that wishes to exercise his warrants (including any warrants held by
our initial shareholders or their permitted transferees) to do so on a “cashless basis.” If our management chooses
to require holders to exercise their warrants on a cashless basis, the number of ordinary shares received by a holder upon exercise
will be fewer than it would have been had such holder exercised his warrants for cash. This will have the effect of reducing the
potential “upside” of the holder’s investment in our company.
We
may amend the terms of the warrants in a way that may be adverse to holders with the approval by the holders of a majority of
the then outstanding warrants.
Our
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as
warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision. The warrant agreement requires the approval by the holders of
a majority of the then outstanding warrants (including the private warrants) in order to make any change that adversely affects
the interests of the registered holders.
Since we have not yet selected a particular industry or target
business with which to complete a business combination, we are
unable to currently ascertain the merits or risks of the industry
or business in which we may ultimately operate.
While we intend to focus our search for target businesses on
specific locations as described in this prospectus, we are not
limited to those locations and may consummate a business
combination with a company in any location or industry we choose.
Accordingly, there is no current basis for you to evaluate the
possible merits or risks of the particular industry in which we may
ultimately operate or the target business which we may ultimately
acquire. To the extent we complete a business combination with a
financially unstable company or an entity in its development stage,
we may be affected by numerous risks inherent in the business
operations of those entities. If we complete a business combination
with an entity in an industry characterized by a high level of
risk, we may be affected by the currently unascertainable risks of
that industry. Although our management will endeavor to evaluate
the risks inherent in a particular industry or target business, we
cannot assure you that we will properly ascertain or assess all of
the significant risk factors. We also cannot assure you that an
investment in our units will not ultimately prove to be less
favorable to investors in this offering than a direct investment,
if an opportunity were available, in a target business.
The requirement that the target business or businesses that we
acquire must collectively have a fair market value equal to at
least 80% of the balance of the funds in the trust account at the
time of the execution of a definitive agreement for our initial
business combination may limit the type and number of companies
that we may complete such a business combination with.
Pursuant to the Nasdaq listing rules, the target business or
businesses that we acquire must collectively have a fair market
value equal to at least 80% of the balance of the funds in the
trust account at the time of the execution of a definitive
agreement for our initial business combination. This restriction
may limit the type and number of companies with which we may
complete a business combination. If we are unable to locate a
target business or businesses that satisfy this fair market value
test, we may be forced to liquidate and you will only be entitled
to receive your pro rata portion of the funds in the trust
account.
If Nasdaq delists our
securities from trading on its exchange after this offering, we
would not be required to satisfy the fair market value requirement
described above and could complete a business combination with a
target business having a fair market value substantially below 80%
of the balance in the trust account.
Our ability to successfully effect a business combination and to be
successful thereafter will be totally dependent upon the efforts of
our key personnel, some of whom may join us following a business
combination. While we intend to closely scrutinize any individuals
we engage after a business combination, we cannot assure you that
our assessment of these individuals will prove to be
correct.
Our ability to successfully effect a business combination is
dependent upon the efforts of our key personnel. We believe that
our success depends on the continued service of our key personnel,
at least until we have consummated our initial business
combination. We cannot assure you that any of our key personnel
will remain with us for the immediate or foreseeable future. In
addition, none of our officers are required to commit any specified
amount of time to our affairs and, accordingly, they will have
21
conflicts of interest in allocating management time among various
business activities, including identifying potential business
combinations and monitoring the related due diligence. We do not
have employment agreements with, or key-man insurance on the life
of, any of our officers. The unexpected loss of the services of our
key personnel could have a detrimental effect on us.
The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel
may remain with the target business in senior management or
advisory positions following a business combination, it is likely
that some or all of the management of the target business will
remain in place or be hired after consummation of the business
combination. While we intend to closely scrutinize any individuals
we engage after a business combination, we cannot assure you that
our assessment of these individuals will prove to be correct. These
individuals may be unfamiliar with the requirements of operating a
public company which could cause us to have to expend time and
resources helping them become familiar with such requirements. This
could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
Our officers and directors may not have significant experience or
knowledge regarding the jurisdiction or industry of the target
business we may seek to acquire.
While
we intend to focus our search for target businesses within the locations and industries as described in this prospectus, we may
consummate a business combination with a target business in any geographic location or industry we choose. We cannot assure you
that our officers and directors will have enough experience or have sufficient knowledge relating to the jurisdiction of the target
or its industry to make an informed decision regarding a business combination. If we become aware of a potential business combination
outside of the geographic location or industry where our officers and directors have the most experience, our management may retain
consultants and advisors with experience in such industries to assist in the evaluation of such business combination and in our
determination of whether or not to proceed with such a business combination. However, our management is not required to engage
consultants or advisors in any situation. If they do not engage any consultants or advisors to assist them in the evaluation of
a particular target business or business combination, our management may not properly analyze the risks attendant with such target
business or business combination. Even if our management does engage consultants or advisors to assist in the evaluation of a
particular target business or business combination, we cannot assure you that such consultants or advisors will properly analyze
the risks attendant with such target business or business combination. As a result, we may enter into a business combination that
is not in our shareholders’ best interests.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business
combination. These agreements may provide for them to receive
compensation following a business combination and as a result, may
cause them to have conflicts of interest in determining whether a
particular business combination is the most
advantageous.
Our key personnel will be able to remain with the company after the
consummation of a business combination only if they are able to
negotiate employment or consulting agreements or other arrangements
in connection with the business combination. Such negotiations
would take place simultaneously with the negotiation of the
business combination and could provide for such individuals to
receive compensation in the form of cash payments and/or our
securities for services they would render to the company after the
consummation of the business combination. The personal and
financial interests of such individuals may influence their
motivation in identifying and selecting a target business.
Our officers and directors will allocate their time to other
businesses thereby potentially limiting the amount of time they
devote to our affairs. This conflict of interest could have a
negative impact on our ability to consummate our initial business
combination.
Our officers and directors are not required to commit their full
time to our affairs, which could create a conflict of interest when
allocating their time between our operations and their other
commitments. We presently expect each of our employees to devote
such amount of time as they reasonably believe is necessary to our
business (which could range from only a few hours a week while we
are trying to locate a potential target business to a majority of
their time as we move into serious negotiations with a target
business for a business combination). We do not intend to have any
full time employees prior to the consummation of our initial
business combination. All of our officers and directors are engaged
in several other business endeavors and are not obligated to devote
any specific number of hours to our affairs. If our officers’
and directors’ other business affairs require them to devote
more substantial amounts of time to such affairs, it could limit
their ability to devote time to our affairs and could have a
negative impact on our ability to consummate our initial business
combination. We cannot assure you these conflicts will be resolved
in our favor.
22
Our officers and directors have pre-existing fiduciary and
contractual obligations and accordingly, may have conflicts of
interest in determining to which entity a particular business
opportunity should be presented.
Our officers and directors have pre-existing fiduciary and
contractual obligations to other companies, including other
companies that are engaged in business activities similar to those
intended to be conducted by us. Accordingly, they may participate
in transactions and have obligations that may be in conflict or
competition with our consummation of our initial business
combination. As a result, a potential target business may be
presented by our management team to another entity prior to its
presentation to us and we may not be afforded the opportunity to
engage in a transaction with such target business. For a more
detailed description of the pre-existing fiduciary and contractual
obligations of our management team, and the potential conflicts of
interest that such obligations may present, see the section titled
“
Management —
Conflicts of Interest
.”
Our officers’ and directors’ personal and financial
interests may influence their motivation in determining whether a
particular target business is appropriate for a business
combination.
Our
officers and directors have waived their right to convert (or sell to us in any tender offer) their insider shares, private shares
or any other ordinary shares acquired in this offering or thereafter (although none of these insiders have indicated any intention
to purchase units in this offering or thereafter), or to receive distributions with respect to their insider shares or private
shares upon our liquidation if we are unable to consummate our initial business combination. Accordingly, these securities will
be worthless if we do not consummate our initial business combination. The private rights, private warrants any other rights or
warrants they acquire will also be worthless if we do not consummate an initial business combination. In addition, our officers
and directors may loan funds to us after this offering and may be owed reimbursement for expenses incurred in connection with
certain activities on our behalf which would only be repaid if we complete an initial business combination. The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and
completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting
a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a
particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would
be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we might have a claim against such individuals.
However, we might not ultimately be successful in any claim we may make against them for such reason.
Nasdaq may delist our securities from trading on its exchange which
could limit investors’ ability to make transactions in our
securities and subject us to additional trading
restrictions.
We anticipate that our securities will be listed on the NASDAQ
Capital Market, a national securities exchange, upon consummation
of this offering. Although, after giving effect to this offering,
we meet on a pro forma basis the minimum initial listing standards
of Nasdaq, which generally only requires that we meet certain
requirements relating to shareholders’ equity, market
capitalization, aggregate market value of publicly held shares and
distribution requirements, we cannot assure you that our securities
will continue to be listed on Nasdaq in the future prior to an
initial business combination. Additionally, in connection with our
initial business combination, it is likely that Nasdaq will require
us to file a new initial listing application and meet its initial
listing requirements as opposed to its more lenient continued
listing requirements. We cannot assure you that we will be able to
meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on its exchange, we
could face significant material adverse consequences,
including:
•
a
limited availability of market quotations for our securities;
•
reduced liquidity with respect to our securities;
•
a
determination that our ordinary shares are “penny
stock” which will require brokers trading in our ordinary
shares to adhere to more stringent rules, possibly resulting in a
reduced level of trading activity in the secondary trading market
for our ordinary shares;
•
a
limited amount of news and analyst coverage for our company;
and
•
a
decreased ability to issue additional securities or obtain
additional financing in the future.
23
We may only be able to complete one business combination with the
proceeds of this offering, which will cause us to be solely
dependent on a single business which may have a limited number of
products or services.
We may only be able to complete one business combination with the
proceeds of this offering. By consummating a business combination
with only a single entity, our lack of diversification may subject
us to numerous economic, competitive and regulatory developments.
Further, we would not be able to diversify our operations or
benefit from the possible spreading of risks or offsetting of
losses, unlike other entities which may have the resources to
complete several business combinations in different industries or
different areas of a single industry. Accordingly, the prospects
for our success may be:
•
solely dependent upon the performance of a single business, or
•
dependent upon the development or market acceptance of a single or
limited number of products, processes or services.
This lack of diversification may subject us to numerous economic,
competitive and regulatory developments, any or all of which may
have a substantial adverse impact upon the particular industry in
which we may operate subsequent to a business combination.
Alternatively, if we determine to simultaneously acquire several
businesses and such businesses are owned by different sellers, we
will need for each of such sellers to agree that our purchase of
its business is contingent on the simultaneous closings of the
other business combinations, which may make it more difficult for
us, and delay our ability, to complete the business combination.
With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to
possible multiple negotiations and due diligence investigations (if
there are multiple sellers) and the additional risks associated
with the subsequent assimilation of the operations and services or
products of the acquired companies in a single operating business.
If we are unable to adequately address these risks, it could
negatively impact our profitability and results of operations.
The ability of our public shareholders to exercise their conversion
rights or sell their public shares to us in a tender offer may not
allow us to effectuate the most desirable business combination or
optimize our capital structure.
If our business combination requires us to use substantially all of
our cash to pay the purchase price, because we will not know how
many public shareholders may exercise conversion rights or seek to
sell their public shares to us in a tender offer, we may either
need to reserve part of the trust account for possible payment upon
such conversion, or we may need to arrange third party financing to
help fund our business transaction. In the event that the business
combination involves the issuance of our shares as consideration,
we may be required to issue a higher percentage of our shares to
make up for a shortfall in funds. Raising additional funds to cover
any shortfall may involve dilutive equity financing or incurring
indebtedness at higher than desirable levels. This may limit our
ability to effectuate the most attractive business combination
available to us.
We may be unable to consummate a business combination if a target
business requires that we have cash in excess of the minimum amount
we are required to have at closing and public shareholders may have
to remain shareholders of our company and wait until our
liquidation to receive a pro rata share of the trust account or
attempt to sell their shares in the open market.
A
potential target may make it a closing condition to our business combination that we have a certain amount of cash in excess of
the $5,000,001 of net tangible assets we are required to have pursuant to our organizational documents available at the time of
closing. If the number of our shareholders electing to exercise their conversion rights or sell their shares to us in a tender
offer has the effect of reducing the amount of money available to us to consummate a business combination below such minimum amount
required by the target business and we are not able to locate an alternative source of funding, we will not be able to consummate
such business combination and we may not be able to locate another suitable target within the applicable time period, if at all.
In that case, public shareholders may have to remain shareholders of our company and wait the full 18 (or 21) months in order
to be able to receive a pro rata portion of the trust account, or attempt to sell their shares in the open market prior to such
time, in which case they may receive less than a pro rata share of the trust account for their shares.
24
Our public shareholders may not be afforded an opportunity to vote
on our proposed business combination, which means we may consummate
our initial business combination even though a majority of our
public shareholders do not support such a combination.
We intend to hold a shareholder vote before we consummate our
initial business combination. However, if a shareholder vote is not
required, for business or legal reasons, we may conduct conversions
via a tender offer and not offer our shareholders the opportunity
to vote on a proposed business combination. Accordingly, we may
consummate our initial business combination even if holders of a
majority of our public shares do not approve of the business
combination.
In connection with any meeting held to approve an initial business
combination, we will offer each public shareholder the option to
vote in favor of a proposed business combination and still seek
conversion of his, her or its public shares, which may make it more
likely that we will consummate a business combination.
In
connection with any meeting held to approve an initial business combination, we will offer each public shareholder (including
Mendakota Casualty Company and Bob Goldstein but not our other initial shareholders) the right to have his, her or its public shares converted to cash
(subject to the limitations described elsewhere in this prospectus) regardless of whether such shareholder votes for or against
such proposed business combination. Furthermore, we will consummate our initial business combination only if we have net tangible
assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares voted are voted in favor of the
business combination. Accordingly, public shareholders owning shares sold in this offering may exercise their conversion rights
and we could still consummate a proposed business combination so long as a majority of shares voted at the meeting are voted in
favor of the proposed business combination. This is different than other similarly structured blank check companies where shareholders
are offered the right to convert their shares only when they vote against a proposed business combination. This is also different
than other similarly structured blank check companies where there is a specific number of shares sold in the offering which must
not exercise conversion rights for the company to complete a business combination. The lack of such a threshold and the ability
to seek conversion while voting in favor of a proposed business combination may make it more likely that we will consummate our
initial business combination.
In connection with any meeting held to approve an initial business
combination, public shareholders, together with any affiliates of
theirs or any other person with whom they are acting in concert or
as a “group,” will be restricted from seeking
conversion rights with respect to more than 20% of the shares sold
in this offering.
In
connection with any meeting held to approve an initial business combination, we will offer each public shareholder (including
Mendakota Casualty Company and Bob Goldstein but not our other initial shareholders) the right to have his, her, or its public shares converted into
cash. Notwithstanding the foregoing, a public shareholder, together with any of its affiliates or any other person with whom it
is acting in concert or as a “group” will be restricted from seeking conversion rights with respect to more than 20%
of the shares sold in this offering. Accordingly, if you hold more than 20% of the shares sold in this offering and a proposed
business combination is approved, you will not be able to seek conversion rights with respect to the full amount of your shares
and may be forced to hold such shares over 20% following the business combination or sell them in the open market. We cannot assure
you that the value of such shares will appreciate over time following a business combination or that the market price of our ordinary
shares will exceed the per-share conversion price.
In connection with any shareholder meeting called to approve a
proposed initial business combination, we may require shareholders
who wish to convert their public shares to comply with specific
requirements for conversion that may make it more difficult for
them to exercise their conversion rights prior to the deadline for
exercising their rights.
In connection with any shareholder meeting called to approve a
proposed initial business combination, each public shareholder will
have the right, regardless of whether it is voting for or against
such proposed business combination, to demand that we convert its
public shares into a share of the trust account. Such conversion
will be effectuated under Cayman Islands law as a repurchase of the
shares, with the repurchase price to be paid being the applicable
pro rata portion of the monies held in the trust account. We may
require public shareholders who wish to convert their public shares
in connection with a proposed business combination to either tender
their certificates to our transfer agent or to deliver their shares
to the transfer agent electronically using the Depository Trust
Company’s (“DTC”) DWAC (Deposit/Withdrawal At
Custodian) System, at the holder’s option, at any time at or
prior to the vote taken at the shareholder meeting relating to such
business combination. In order to obtain a physical share
certificate, a shareholder’s broker and/or clearing broker,
DTC and our transfer agent will need to act to facilitate this
request. It is our understanding that shareholders should generally
allot at least two weeks to obtain physical certificates from the
transfer agent. However, because we do not have any control over
this process or over the brokers or DTC, it may
25
take significantly longer than two weeks to obtain a physical share
certificate. It is also our understanding that it takes a short
time to deliver shares through the DWAC System. However, this too
may not be the case. Accordingly, if it takes longer than we
anticipate for shareholders to deliver their shares, shareholders
who wish to convert may be unable to meet the deadline for
exercising their conversion rights and thus may be unable to
convert their shares.
Investors may not have sufficient time to comply with the delivery
requirements for conversion.
Pursuant to our memorandum and articles of association, we are
required to give a minimum of only ten days’ notice for each
general meeting. As a result, if we require public shareholders who
wish to convert their public shares into the right to receive a pro
rata portion of the funds in the trust account to comply with
specific delivery requirements for conversion, holders may not have
sufficient time to receive the notice and deliver their shares for
conversion. Accordingly, investors may not be able to exercise
their conversion rights and may be forced to retain our securities
when they otherwise would not want to.
If we require public shareholders who wish to convert their public
shares to comply with the delivery requirements for conversion,
such converting shareholders may be unable to sell their securities
when they wish to in the event that the proposed business
combination is not approved.
If we require public shareholders who wish to convert their public
shares to comply with specific delivery requirements for conversion
described above and such proposed business combination is not
consummated, we will promptly return such certificates to the
tendering public shareholders. Accordingly, investors who attempted
to convert their shares in such a circumstance will be unable to
sell their securities after the failed acquisition until we have
returned their securities to them. The market price for our shares
may decline during this time and you may not be able to sell your
securities when you wish to, even while other shareholders that did
not seek conversion may be able to sell their securities.
Because of our limited resources and structure, other companies may
have a competitive advantage and we may not be able to consummate
an attractive business combination.
We
expect to encounter intense competition from entities other than blank check companies having a business objective similar to
ours, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these
entities are well established and have extensive experience in identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources
will be relatively limited when contrasted with those of many of these competitors. While we believe that there are numerous potential
target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable
target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage
in pursuing the acquisition of certain target businesses. Furthermore, seeking shareholder approval of a business combination
may delay or prevent the consummation of a transaction, a risk a target business may not be willing to accept. Additionally, our
outstanding warrants and unit purchase options, and the future dilution they potentially represent, may not be viewed favorably
by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating a business
combination.
Our initial shareholders control a substantial interest in us and
thus may influence certain actions requiring a shareholder
vote.
Upon
consummation of our offering, our initial shareholders will collectively own approximately 23.8% of our issued and outstanding
ordinary shares (assuming they do not purchase any units in this offering). None of our officers, directors, initial shareholders
or their affiliates has indicated any intention to purchase units in this offering or any units or ordinary shares from persons
in the open market or in private transactions. However, our officers, directors, initial shareholders or their affiliates could
determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by law,
in order to assist us in consummating our initial business combination. In connection with any vote for a proposed business combination,
all of our initial shareholders, as well as all of our officers and directors, have agreed to vote the ordinary shares owned by
them immediately before this offering as well as any ordinary shares acquired in this offering or in the aftermarket in favor
of such proposed business combination.
Our
board of directors is and will be divided into three classes, each of which will generally serve for a term of three years with
only one class of directors being elected in each year. There is no requirement under the Companies Law for us to hold annual
or general meetings to elect directors. Accordingly, shareholders would not have the right to such a meeting or election of directors,
unless the holders of not less than 10% in par value capital of our company request such a meeting. As a result, it
26
is
unlikely that there will be an annual meeting of shareholders to elect new directors prior to the consummation of a business combination,
in which case all of the current directors will continue in office until at least the consummation of the business combination.
Accordingly, you may not be able to exercise your voting rights for up to 21 months. If there is an annual meeting, as a consequence
of our “staggered” board of directors, only a minority of the board of directors will be considered for election and
our initial shareholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly,
our initial shareholders will continue to exert control at least until the consummation of a business combination.
Our initial shareholders paid an aggregate of $25,000, or
approximately $0.02 per share, for the insider shares and,
accordingly, you will experience immediate and substantial dilution
from the purchase of our ordinary shares.
The
difference between the public offering price per share and the pro forma net tangible book value per share after this offering
constitutes the dilution to the investors in this offering. For the purposes of the dilution calculation, we have assumed the
issuance of 1/7 of a share for each right outstanding, as such issuance will occur upon an initial business combination without
the payment of additional consideration, but have assumed no exercise of the warrants. Accordingly, for the purposes of the dilution
calculation, the number of shares included in the units offered hereby will be deemed to be 4,571,428 and, the price per share
in this offering will be deemed to be approximately $8.75. Our initial shareholders acquired their insider shares at a nominal
price, significantly contributing to this dilution. Upon consummation of this offering, you and the other new investors will incur
an immediate and substantial dilution of approximately 75.6% or $6.62 per share (the difference between the pro forma net tangible
book value per share of $2.13, and the initial offering price of $8.75 per share as adjusted for the ordinary shares underlying
the rights included in the units). This is because investors in this offering will be contributing approximately 92.8% of the
total amount paid to us for our outstanding securities after this offering but will only own approximately 77.1% of our outstanding
securities. Accordingly, the per-share purchase price you will be paying substantially exceeds our per share net tangible book
value.
Our
outstanding rights, warrants and unit purchase options may have an adverse effect on the market price of our ordinary shares and
make it more difficult to effect a business combination.
We
will be issuing rights and warrants that will result in the issuance of an additional 571,428 ordinary shares and 2,000,000 ordinary
shares, respectively, as part of the units offered by this prospectus and private rights and private warrants that will result
in the issuance of an additional 44,285 ordinary shares and 155,000 ordinary shares, respectively. We will also issue unit purchase
options to purchase 400,000 units to the representative of the underwriters which, if exercised, will result in the issuance of
457,142 ordinary shares (including 57,142 shares upon conversion of the rights included therein) and warrants to purchase an additional
200,000 ordinary shares. The potential for the issuance of a substantial number of additional shares upon conversion of the rights
and exercise of the warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such securities,
when converted, will increase the number of issued and outstanding ordinary shares and reduce the value of the shares issued to
complete the business combination. Accordingly, our rights, warrants and unit purchase options may make it more difficult to effectuate
a business combination or increase the cost of acquiring the target business. Additionally, the sale, or even the possibility
of sale, of the shares underlying the rights, warrants and unit purchase options could have an adverse effect on the market price
for our securities or on our ability to obtain future financing. If and to the extent these rights and options are converted and
exercised, you may experience dilution to your holdings.
If
our shareholders exercise their registration rights with respect to their securities, it may have an adverse effect on the market
price of our ordinary shares and the existence of these rights may make it more difficult to effect a business combination.
Our
initial shareholders are entitled to make a demand that we register the resale of their insider shares at any time commencing
three months prior to the date on which their shares may be released from escrow. Additionally, the purchasers of the private
units and our initial shareholders, officers and directors are entitled to demand that we register the resale of the shares underlying
the private units and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment
of working capital loans made to us at any time after we consummate a business combination. The presence of these additional securities
trading in the public market may have an adverse effect on the market price of our securities. In addition, the existence of these
rights may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business,
as the shareholders of the target business may be discouraged from entering into a business combination with us or will request
a higher price for their securities because of the potential effect the exercise of such rights may have on the trading market
for our ordinary shares.
27
EarlyBirdCapital may have a conflict of interest in rendering
services to us in connection with our initial business
combination.
We have engaged EarlyBirdCapital to assist us in connection with
our initial business combination. We will pay EarlyBirdCapital a
cash fee for such services upon the consummation of our initial
business combination in an amount equal to 4.0% of the total gross
proceeds raised in the offering. This financial interest may result
in EarlyBirdCapital having a conflict of interest when providing
the services to us in connection with an initial business
combination.
If we are deemed to be an investment company, we may be required to
institute burdensome compliance requirements and our activities may
be restricted, which may make it difficult for us to complete a
business combination.
A company that, among other things, is or holds itself out as being
engaged primarily, or proposes to engage primarily, in the business
of investing, reinvesting, owning, trading or holding certain types
of securities would be deemed an investment company under the
Investment Company Act of 1940. Since we will invest the proceeds
held in the trust account, it is possible that we could be deemed
an investment company. Notwithstanding the foregoing, we do not
believe that our anticipated principal activities will subject us
to the Investment Company Act of 1940. To this end, the proceeds
held in trust may be invested by the trustee only in United States
government treasury bills, notes or bonds having a maturity of 180
days or less or in money market funds meeting the applicable
conditions under Rule 2a-7 promulgated under the Investment Company
Act of 1940 and that invest solely in United States treasuries. By
restricting the investment of the proceeds to these instruments, we
intend to meet the requirements for the exemption provided in Rule
3a-1 promulgated under the Investment Company Act of 1940.
If we are nevertheless deemed to be an investment company under the
Investment Company Act of 1940, we may be subject to certain
restrictions that may make it more difficult for us to complete a
business combination, including:
•
restrictions on the nature of our investments; and
•
restrictions on the issuance of securities.
In addition, we may have imposed upon us certain burdensome
requirements, including:
•
registration as an investment company;
•
adoption of a specific form of corporate structure; and
•
reporting, record keeping, voting, proxy, compliance policies and
procedures and disclosure requirements and other rules and
regulations.
Compliance with these additional regulatory burdens would require
additional expense for which we have not allotted.
We may not seek an opinion from an unaffiliated third party as to
the fair market value of the target business we acquire.
We are not required to obtain an opinion from an unaffiliated third
party that the target business we select has a fair market value in
excess of at least 80% of the balance of the trust account unless
our board of directors cannot make such determination on its own.
We are also not required to obtain an opinion from an unaffiliated
third party indicating that the price we are paying is fair to our
shareholders from a financial point of view unless the target is
affiliated with our officers, directors, initial shareholders or
their affiliates. If no opinion is obtained, our shareholders will
be relying on the judgment of our board of directors, whose
collective experience in business evaluations for blank check
companies like ours is not significant. Furthermore, our directors
may have a conflict of interest in analyzing the transaction due to
their personal and financial interests.
We may acquire a target business that is affiliated with our
officers, directors, initial shareholders or their
affiliates.
While we do not currently intend to pursue an initial business
combination with a company that is affiliated with our officers,
directors, initial shareholders or their affiliates, we are not
prohibited from pursuing such a transaction, nor are we prohibited
from consummating a business combination where any of our officers,
directors, initial shareholders or their affiliates acquire a
minority interest in the target business alongside our acquisition,
provided in each case we obtain an opinion from an unaffiliated
third party indicating that the price we are paying is fair to our
shareholders from a financial point of view. These affiliations
could cause our officers or directors to have a conflict of
interest in analyzing such transactions due to their personal and
financial interests.
28
The determination of the offering price of our units is more
arbitrary than the pricing of securities for an operating company
in a particular industry.
Prior
to this offering there has been no public market for any of our securities. The public offering price of the units and the terms
of the rights and warrants were negotiated between us and the representative of the underwriters. Factors considered in determining
the prices and terms of the units, including the ordinary shares and rights and warrants underlying the units, include:
•
the history and prospects of companies whose principal business is
the acquisition of other companies;
•
prior offerings of those companies;
•
our prospects for acquiring an operating business at attractive
values;
•
our capital structure;
•
the per share amount of net proceeds being placed in the trust
account;
•
an
assessment of our management and their experience in identifying
operating companies; and
•
general conditions of the securities markets at the time of the
offering.
However, although these factors were considered, the determination
of our offering price is more arbitrary than the pricing of
securities for an operating company in a particular industry since
we have no historical operations or financial results to compare
them to.
Because we are incorporated under the laws of the Cayman Islands,
you may face difficulties in protecting your interests, and your
ability to protect your rights through the U.S. Federal courts may
be limited.
We are an exempted company incorporated under the laws of the
Cayman Islands and certain of our officers and directors are
residents of jurisdictions outside the United States. As a result,
it may be difficult for investors to effect service of process
within the United States upon our directors or executive officers,
or enforce judgments obtained in the United States courts against
our directors or officers.
Our corporate affairs will be governed by our amended and restated
memorandum and articles of association, the Companies Law (as the
same may be supplemented or amended from time to time) or the
common law of the Cayman Islands. The rights of shareholders to
take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law
of the Cayman Islands. The common law of the Cayman Islands is
derived in part from comparatively limited judicial precedent in
the Cayman Islands as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not
binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors
under Cayman Islands law are different from statutes or judicial
precedent in some jurisdictions in the United States. In
particular, the Cayman Islands has a different body of securities
laws as compared to the United States. In addition, Cayman Islands
companies may not have standing to initiate a shareholders
derivative action in a Federal court of the United States.
We have been advised by our Cayman Islands legal counsel that the
courts of the Cayman Islands are unlikely (i) to recognize or
enforce against us judgments of courts of the United States
predicated upon the civil liability provisions of the federal
securities laws of the United States or any state; and (ii) in
original actions brought in the Cayman Islands, to impose
liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or
any state, so far as the liabilities imposed by those provisions
are penal in nature. In those circumstances, although there is no
statutory enforcement in the Cayman Islands of judgments obtained
in the United States, the courts of the Cayman Islands will
recognize and enforce a foreign money judgment of a foreign court
of competent jurisdiction without retrial on the merits based on
the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which
judgment has been given provided certain conditions are met. For a
foreign judgment to be enforced in the Cayman Islands, such
judgment must be final and conclusive and for a liquidated sum, and
must not be in respect of taxes or a fine or penalty, inconsistent
with a Cayman Islands judgment in respect of the same matter,
impeachable on the grounds of fraud or obtained in a manner, and or
be of a kind the enforcement of which is, contrary to natural
justice or the public policy of the Cayman Islands (awards of
29
punitive or multiple damages may well be held to be contrary to
public policy). A Cayman Islands Court may stay enforcement
proceedings if concurrent proceedings are being brought
elsewhere.
As a result of all of the above, public shareholders may have more
difficulty in protecting their interests in the face of actions
taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of
a United States company.
We intend to effect a business combination with a company located
outside of the United States and if we do, we would be subject to a
variety of additional risks that may negatively impact our business
operations and financial results.
If we consummate a business combination with a target business
located outside of the United States, we would be subject to any
special considerations or risks associated with companies operating
in the target business’ governing jurisdiction, including any
of the following:
•
rules and regulations or currency redemption or corporate
withholding taxes on individuals;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
longer payment cycles;
•
inflation;
•
economic policies and market conditions;
•
unexpected changes in regulatory requirements;
•
challenges in managing and staffing international operations;
•
tax issues, such as tax law changes and variations in tax laws as
compared to the United States;
•
currency fluctuations;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
protection of intellectual property; and
•
employment regulations.
We cannot assure you that we would be able to adequately address
these additional risks. If we were unable to do so, our operations
might suffer.
If we effect a business combination with a company located outside
of the United States, the laws applicable to such company will
likely govern all of our material agreements and we may not be able
to enforce our legal rights.
If we effect a business combination with a company located outside
of the United States, the laws of the country in which such company
operates will govern almost all of the material agreements relating
to its operations. We cannot assure you that the target business
will be able to enforce any of its material agreements or that
remedies will be available in this new jurisdiction.
The system of laws and the enforcement of
existing laws in such jurisdiction may not be as certain in
implementation and interpretation as in the United States. The
inability to enforce or obtain a remedy under any of our future
agreements could result in a significant loss of business, business
opportunities or capital. Additionally, if we acquire a company
located outside of the United States, it is likely that
substantially all of our assets would be located outside of the
United States and some of our officers and directors might reside
outside of the United States. As a result, it may not be possible
for investors in the United States to enforce their legal rights,
to effect service of process upon our directors or officers or to
enforce judgments of United States
courts predicated upon
civil liabilities and criminal penalties of our directors and
officers under Federal securities laws.
30
Because we must furnish our shareholders with financial statements
of the target business prepared in accordance with U.S. GAAP or
IFRS as issued by the IASB or reconciled to U.S. GAAP, we may not
be able to complete an initial business combination with some
prospective target businesses.
The federal proxy rules require that a proxy statement with respect
to a vote on a business combination meeting certain financial
significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. These financial
statements may be required to be prepared in accordance with, or be
reconciled to, accounting principles generally accepted in the
United States of America, or GAAP, or international financial
reporting standards, or IFRS, depending on the circumstances, and
the historical financial statements may be required to be audited
in accordance with the standards of the Public Company Accounting
Oversight Board (United States), or PCAOB. The financial statements
may also be required to be prepared in accordance with U.S. GAAP
for the Form 8-K announcing the closing of an initial business
combination, which would need to be filed within four business days
thereafter. These financial statement requirements may limit the
pool of potential target businesses we may acquire.
Compliance with the Sarbanes-Oxley Act of 2002 will require
substantial financial and management resources and may increase the
time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we
evaluate and report on our system of internal controls and may
require us to have such system audited by an independent registered
public accounting firm. If we fail to maintain the adequacy of our
internal controls, we could be subject to regulatory scrutiny,
civil or criminal penalties and/or shareholder litigation. Any
inability to provide reliable financial reports could harm our
business. A target business may also not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding the adequacy of
internal controls. The development of the internal controls of any
such entity to achieve compliance with the Sarbanes-Oxley Act may
increase the time and costs necessary to complete any such
acquisition. Furthermore, any failure to implement required new or
improved controls, or difficulties encountered in the
implementation of adequate controls over our financial processes
and reporting in the future, could harm our operating results or
cause us to fail to meet our reporting obligations. Inferior
internal controls could also cause investors to lose confidence in
our reported financial information, which could have a negative
effect on the trading price of our securities.
We are an “emerging growth company” and we cannot be
certain if the reduced disclosure requirements applicable to
emerging growth companies will make our securities less attractive
to investors.
We are an “emerging growth company,” as defined in the
JOBS Act. We will remain an “emerging growth company”
for up to five years. However, if our non-convertible debt issued
within a three-year period or revenues exceeds $1 billion, or the
market value of our ordinary shares that are held by non-affiliates
exceeds $700 million on the last day of the second fiscal quarter
of any given fiscal year, we would cease to be an emerging growth
company as of the following fiscal year. As an emerging growth
company, we are not being required to comply with the auditor
attestation requirements of section 404 of the Sarbanes-Oxley Act,
we have reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and we
are exempt from the requirements of holding a nonbinding advisory
vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. Additionally, as
an emerging growth company, we have elected to delay the adoption
of new or revised accounting standards that have different
effective dates for public and private companies until those
standards apply to private companies. As such, our financial
statements may not be comparable to companies that comply with
public company effective dates. We cannot predict if investors will
find our shares less attractive because we may rely on these
provisions. If some investors find our shares less attractive as a
result, there may be a less active trading market for our shares
and our share price may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised
financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement
declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or
revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period
and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. We
have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has
different application dates for public or private companies, we, as
an emerging growth company, will not adopt the new or revised
standard until the time private companies are required to adopt the
new or revised standard. This may make comparison of our financial
statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out
of using the extended transition period difficult or impossible
because of the potential differences in accountant standards
used.
31
An investment in this offering may involve adverse U.S. federal
income tax consequences.
An
investment in this offering may involve adverse U.S. federal income tax consequences. For instance, there is a risk that an investor’s
entitlement to receive payments in excess of the investor’s initial tax basis in our ordinary shares upon exercise of the
investor’s conversion right or upon our liquidation of the trust account will result in constructive income to the investor,
which could affect the timing and character of income recognition and result in U.S. federal income tax liability to the investor
without the investor’s receipt of cash from us. Furthermore, because there are no authorities that directly address instruments
similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of the
unit between the ordinary shares, rights and warrants included in the units could be challenged by the IRS or the courts. See
the section titled “
Taxation
” for a summary of the material United States Federal income tax consequences of
an investment in our securities. Prospective investors are urged to consult their own tax advisors with respect to these and other
tax consequences when purchasing, holding or disposing of our securities.
We have also not sought a ruling from the Internal Revenue Service,
or IRS, as to any U.S. federal income tax consequences described in
this prospectus. The IRS may disagree with the descriptions of U.S.
federal income tax consequences described herein, and its
determination may be upheld by a court. Any such determination
could subject an investor or our company to adverse U.S. federal
income tax consequences that would be different than those
described in this prospectus. Accordingly, each prospective
investor is urged to consult a tax advisor with respect to the
specific tax consequences of the acquisition, ownership and
disposition of our securities, including the applicability and
effect of state, local, or foreign tax laws, as well as U.S.
federal tax laws.
We may qualify as a passive foreign investment company, which could
result in adverse U.S. federal income tax consequences to U.S.
investors.
In
general, we will be treated as a passive foreign investment company (“PFIC”) for any taxable year in which either
(1) at least
75% of our gross income (looking through certain 25% or more-owned corporate
subsidiaries) is passive income or (2) at least 50%
of the average value of our assets (looking through certain 25% or
more-owned corporate subsidiaries) is attributable to assets that produce, or are held for the production of, passive income.
Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of
passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period
of a U.S. holder of our units, ordinary shares, rights or warrants, the U.S. holder may be subject to increased U.S. federal income
tax liability and may be subject to additional reporting requirements. Our actual PFIC status for our current taxable year may
depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Taxation —
United States Federal Income Taxation — Passive Foreign Investment Company Rules”). Our actual PFIC status for any
taxable year, however, will not be determinable until after the end of such taxable year (or after the end of the start-up period,
if later). Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent
taxable year. We urge U.S. investors to consult their own tax advisors regarding the possible application of the PFIC rules.
Risks related to
operations in the Andean Region and Central America
Business combinations with companies with operations in the Andean
region of South America and in Central America entail special
considerations and risks. If we are successful in completing a
business combination with a target business with operations in the
Andean region of South America or in Central America, we will be
subject to, and possibly adversely affected by, the risks set forth
below. However, our efforts in identifying prospective target
businesses will not be limited to a particular industry or
geographic location. Accordingly, if we acquire a target business
in another geographic location, these risks will likely not affect
us and we will be subject to other risks attendant with the
specific industry or location of the target business which we
acquire, none of which can be presently ascertained.
After a business combination, substantially all of our assets will
likely be located in the Andean region of South America or in
Central America and substantially all of our revenue will be
derived from our operations in the Andean region of South America
or in Central America. Accordingly, our results of operations and
prospects will be subject, to a significant extent, to the
economic, political and legal policies, developments and conditions
in those regions.
Economic, political and social conditions, as well as government
policies, in the Andean region of South America and in Central
America could affect our business. Future government actions
concerning the economy and taxation could have a significant
32
effect on us following our initial business combination. Any
changes in regulations or shifts in political attitudes are beyond
our control and may adversely affect our business.
If relations between the United States and countries in the Andean
region of South America and in Central America deteriorate,
potential target businesses or their goods or services could become
less attractive.
The relationship between the United States and countries in the
Andean region of South America and in Central America is subject to
sudden fluctuation and periodic tension. Changes in political
conditions in these regions and changes in the state of United
States relations with countries in these regions are difficult to
predict and could adversely affect our operations or cause
potential target businesses or their goods and services to become
less attractive.
If our management following a business combination is unfamiliar
with United States securities laws, they may have to expend time
and resources becoming familiar with such laws which could lead to
various regulatory issues.
Following a business combination, our management will likely resign
from their positions as officers of the company and the management
of the target business at the time of the business combination will
remain in place. We cannot assure you that management of the target
business will be familiar with United States securities laws. If
new management is unfamiliar with our laws, they may have to expend
time and resources becoming familiar with such laws. This could be
expensive and time-consuming and could lead to various regulatory
issues which may adversely affect our operations.
If restrictions on repatriation of earnings from the target
business’ home jurisdiction to foreign entities are
instituted, our business following a business combination may be
materially negatively affected.
It is possible that following an initial business combination, the
home jurisdiction of the target business may have restrictions on
repatriations of earnings or additional restrictions may be imposed
in the future. If they were, it could have a material adverse
effect on our operations.
Currencies
of companies operating in the Andean region of South America and in Central America may depreciate significantly over time.
Currencies
of countries in the Andean region of South America and in Central America, such as Colombia, Peru and Chile, have experienced
significant depreciation in the past. If we acquire a target business in one of these countries, we could be subject to currency
fluctuations which could adversely impact our operations and profitability.
Local
accounting practices vary significantly and reconciling the accounting practices of a target business to U.S. accounting practices
could be time consuming and expensive.
Local
accounting practices vary significantly from country to country. Although Colombia, Peru and Chile have all adopted International
Financial Reporting Standards (IFRS) in recent years, there is still divergence among countries. If we need to reconcile accounting
practices of a target business to U.S. generally accepted accounting practices, it could be time consuming and expensive and could
have a negative impact on our results of operations and profitability.
A
global economic downturn could have a greater negative impact on countries in the Andean region of South America and in Central
America than in other parts of the world.
Although
a global economic downturn would impact all countries worldwide, it could have a greater negative impact on countries in the Andean
region of South America and in Central America. As commodity exporters, these countries have been impacted by the decline in international
price of raw materials. However, a deepening of the global slowdown or an external crisis could more severely impact the slowdown
in the countries of this region.
33
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that are not purely
historical are forward-looking statements. Our forward-looking
statements include, but are not limited to, statements regarding
our or our management’s expectations, hopes, beliefs,
intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words
“anticipates,” “believe,”
“continue,” “could,”
“estimate,” “expect,”
“intends,” “may,” “might,”
“plan,” “possible,”
“potential,” “predicts,”
“project,” “should,” “would”
and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is
not forward-looking. Forward-looking statements in this prospectus
may include, for example, statements about our:
•
ability to identify or complete an initial business
combination;
•
limited operating history;
•
success in retaining or recruiting, or changes required in, our
officers, key employees or directors following our initial business
combination;
•
potential ability to obtain additional financing to complete a
business combination;
•
pool of prospective target businesses;
•
the ability of our officers and directors to generate potential
investment opportunities;
•
potential change in control if we acquire one or more target
businesses for shares;
•
our public securities’ potential liquidity and trading;
•
regulatory or operational risks associated with acquiring a target
business;
•
use of proceeds not held in the trust account or available to us
from interest income on the trust account balance;
•
financial performance following this offering; or
•
listing or delisting of our securities from Nasdaq or the ability
to have our securities listed on Nasdaq following our initial
business combination.
The forward-looking statements contained in this prospectus are
based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no
assurance that future developments affecting us will be those that
we have anticipated. These forward-looking statements involve a
number of risks, uncertainties (some of which are beyond our
control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors
described under the heading “
Risk
Factors
.” Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
34
USE OF
PROCEEDS
We estimate that the net proceeds of this offering, in addition to
the funds we will receive from the sale of the private units (all
of which will be deposited into the trust account), will be as set
forth in the following table:
|
|
|
Without
Over-Allotment
Option
|
|
Over-Allotment
Option Exercised
|
|
Gross
proceeds
|
|
|
|
|
|
|
|
|
|
From
offering
|
|
$
|
40,000,000
|
|
|
$
|
46,000,000
|
|
|
From
private placement
|
|
|
3,100,000
|
|
|
|
3,385,000
|
|
|
Total
gross proceeds
|
|
$
|
43,100,000
|
|
|
$
|
49,385,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering
expenses
(1)
|
|
|
|
|
|
|
|
|
|
Underwriting
discount
|
|
$
|
1,300,000
|
(2)
|
|
$
|
1,495,000
|
(2)
|
|
Legal
fees and expenses
|
|
|
280,000
|
|
|
|
280,000
|
|
|
Nasdaq
listing fee
|
|
|
50,000
|
|
|
|
50,000
|
|
|
Printing
and engraving expenses
|
|
|
45,000
|
|
|
|
45,000
|
|
|
Accounting
fees and expenses
|
|
|
35,000
|
|
|
|
35,000
|
|
|
FINRA
filing fee
|
|
|
8,000
|
|
|
|
8,000
|
|
|
SEC
registration fee
|
|
|
5,800
|
|
|
|
5,800
|
|
|
Miscellaneous
expenses
|
|
|
26,200
|
|
|
|
26,200
|
|
|
Total
offering expenses
|
|
$
|
1,750,000
|
|
|
$
|
1,945,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
proceeds
|
|
|
|
|
|
|
|
|
|
Held
in trust
|
|
$
|
40,600,000
|
(3)
|
|
$
|
46,690,000
|
(3)
|
|
Not
held in trust
|
|
|
750,000
|
|
|
|
750,000
|
|
|
Total
net proceeds
|
|
$
|
41,350,000
|
|
|
$
|
47,440,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Use
of net proceeds not held in trust and amounts available from interest income
earned on the trust account
(4)(5)
|
|
|
|
|
|
|
|
|
|
Advisor
fee payable to B. Riley
|
|
$
|
250,000
|
|
|
|
33.3
|
%
|
|
Legal,
accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation,
structuring and negotiation of a business combination
|
|
|
175,000
|
|
|
|
23.3
|
%
|
|
Due
diligence of prospective target businesses by officers, directors and initial shareholders
|
|
|
50,000
|
|
|
|
6.7
|
%
|
|
Legal
and accounting fees relating to SEC reporting obligations
|
|
|
100,000
|
|
|
|
13.4
|
%
|
|
Working
capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, liquidation obligations and reserves
|
|
|
175,000
|
|
|
|
23.3
|
%
|
|
Total
|
|
$
|
750,000
|
|
|
|
100.0
|
%
|
35
Our
initial shareholders and EarlyBirdCapital have agreed that they and their respective designees will purchase an aggregate of 310,000
private units at a price of $10.00 per unit ($3,100,000 in the aggregate) in a private placement that will occur simultaneously
with the closing of this offering. They have further agreed that if the over-allotment option is exercised by the underwriters,
they will purchase from us at a price of $10.00 per unit an additional number of private units (up to a maximum of 28,500 private
units) pro rata with the amount of the over-allotment option exercised so that at least $10.15 per share sold to the public in
this offering is held in trust regardless of whether the over-allotment option is exercised in full or part. All of the proceeds
we receive from these purchases will be placed in the trust account described below.
$40,600,000,
or $46,690,000 if the over-allotment option is exercised in full, of net proceeds of this offering and the sale of the private
rights will be placed in an account at UBS Financial Services in the United States, maintained by Continental Stock Transfer &
Trust Company, New York, New York, as trustee. Pursuant to the investment management trust agreement that will govern the investment
of such funds, the trustee, upon our written instructions, will direct UBS Financial Services to invest the funds as set forth
in such written instructions and to custody the funds while invested and until otherwise instructed in accordance with the investment
management trust agreement. The funds held in trust will be invested only in United States government treasury bills, bonds or
notes having a maturity of 180 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated
under the Investment Company Act of 1940 and that invest solely in United States government treasuries, so that we are not deemed
to be an investment company under the Investment Company Act. Except with respect to (i) interest earned on the funds held in
the trust account that may be released to us to pay our income or other tax obligations and (ii) any remaining interest earned
on the funds held in the trust account that may be released to us for our working capital requirements, the proceeds will not
be released from the trust account until the earlier of the completion of a business combination or our liquidation. The proceeds
held in the trust account may be used as consideration to pay the sellers of a target business with which we complete a business
combination. Any amounts not paid as consideration to the sellers of the target business may be used to finance operations of
the target business.
Other than the payment of consulting fees to our officers,
directors, shareholders or their affiliates for assisting us in
consummating our initial business combination in an amount not to
exceed an aggregate of $_____, no compensation of any kind
(including finder’s, consulting or other similar fees) will
be paid to any of our existing officers, directors, shareholders,
or any of their affiliates, prior to, or for any services they
render in order to effectuate, the consummation of the business
combination (regardless of the type of transaction that it is).
However, such individuals will receive reimbursement for any
out-of-pocket expenses incurred by them in connection with
activities on our behalf, such as identifying potential target
businesses, performing business due diligence on suitable target
businesses and business combinations as well as traveling to and
from the offices, plants or similar locations of prospective target
businesses to examine their operations. Since the role of present
management after a business combination is uncertain, we have no
ability to determine what remuneration, if any, will be paid to
those persons after a business combination.
Regardless of whether the over-allotment option is exercised in
full, the net proceeds from this offering available to us out of
trust for our working capital requirements in searching for a
business combination will be approximately $750,000, of which
$250,000 will be paid by us on closing of this offering to B. Riley
& Co. as described herein. In addition, the interest earned on
the funds held in the trust account (after payment of taxes owed on
such interest income) may be released to us to fund our working
capital requirements in searching for a business combination. We
intend to use the excess working capital available for
miscellaneous expenses such as paying fees to consultants to assist
us with our search for a target business and for director and
36
officer liability insurance premiums, with the balance being held
in reserve in the event due diligence, legal, accounting and other
expenses of structuring and negotiating business combinations
exceed our estimates, as well as for reimbursement of any
out-of-pocket expenses incurred by our initial shareholders,
officers and directors in connection with activities on our behalf
as described above. We will also be entitled to have interest
earned on the funds held in the trust account released to us to pay
any tax obligations that we may owe. We intend to use the after-tax
interest earned for miscellaneous expenses such as paying fees to
consultants to assist us with our search for a target business and
for director and officer liability insurance premiums, with the
balance being held in reserve in the event due diligence, legal,
accounting and other expenses of structuring and negotiating
business combinations exceed our estimates, as well as for
reimbursement of any out-of-pocket expenses incurred by our initial
shareholders, officers and directors in connection with activities
on our behalf as described below.
The allocation of the net proceeds available to us outside of the
trust account, along with the available interest earned on the
funds held in the trust account, represents our best estimate of
the intended uses of these funds. In the event that our assumptions
prove to be inaccurate, we may reallocate some of such proceeds
within the above described categories. If our estimate of the costs
of undertaking in-depth due diligence and negotiating our initial
business combination is less than the actual amount necessary to do
so, or the amount of interest available from the trust account is
insufficient as a result of the current low interest rate
environment, we may be required to raise additional capital, the
amount, availability and cost of which is currently
unascertainable. In this event, we could seek such additional
capital through loans or additional investments from members of our
management team, but such members of our management team are not
under any obligation to advance funds to, or invest in, us.
We will likely use a substantial portion of the net proceeds of
this offering, including the funds held in the trust account, to
acquire a target business, to pay holders who wish to convert or
sell their shares to us for a portion of the funds held in the
trust account and to pay our expenses relating thereto, including a
fee payable to B. Riley & Co. of $250,000 upon consummation of
this offering to provide us with certain advisory services in
connection with our initial business combination and a fee payable
to EarlyBirdCapital equal to 4.0% of the gross proceeds raised in
this offering (exclusive of any applicable finders’ fees
which might become payable) upon consummation of our initial
business combination for assisting us in connection with our
initial business combination, as described under the section titled
“
Underwriting —
Business Combination Marketing Agreement
.” If the
payment of our liabilities, including the fee payable to
EarlyBirdCapital, were to reduce the amount available to us in
trust necessary to pay all holders who wish to convert or sell
their shares to us for a portion of the funds held in the trust
account, we would not be able to consummate such transaction. To
the extent that our share capital is used in whole or in part as
consideration to effect a business combination, the proceeds held
in the trust account which are not used to consummate a business
combination, to pay holders who wish to convert their shares into a
portion of the funds held in the trust account or pay our expenses
relating thereto (which could include the up to $1,840,000 payable
to EarlyBirdCapital described above if the over-allotment option is
exercised in full) will be disbursed to the combined company and
will, along with any other net proceeds not expended, be used as
working capital to finance the operations of the target business.
Such working capital funds could be used in a variety of ways
including continuing or expanding the target business’
operations, for strategic acquisitions and for marketing, research
and development of existing or new products.
To the extent we are unable to consummate a business combination,
we will pay the costs of liquidating our trust account from our
remaining assets outside of the trust account. If such funds are
insufficient, B. Luke Weil has agreed to advance us the funds
necessary to complete such liquidation (currently anticipated to be
no more than $15,000) and has agreed not to seek repayment of such
expenses.
As of August 21, 2015, B. Luke Weil had advanced to us an aggregate
of $30,000 to be used to pay a portion of the expenses of this
offering referenced in the line items above for a portion of the
legal expenses. The advances are payable without interest on the
date on which we consummate our initial public offering. The
advances will be repaid out of the proceeds of this offering
available to us for payment of offering expenses. If we determine
not to proceed with the offering, such amounts would not be
repaid.
In
order to meet our working capital needs following the consummation of this offering until completion of an initial business combination,
our initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to
time or at any time, in whatever amount they deem reasonable in their sole discretion. The notes would either be paid upon consummation
of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be
converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for
example, would result in the holders being issued 57,142 ordinary shares if $500,000 of notes were so converted
37
as
the rights included in the units would result in an additional 7,142 shares being issued, as well as 50,000 warrants to purchase
25,000 shares). Our shareholders have approved the issuance of the units and underlying securities upon conversion of such notes,
to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we
do not complete our initial business combination, the loans would not be repaid.
A public shareholder will be entitled to receive funds from the
trust account (including interest earned on his, her or its portion
of the trust account to the extent not previously released to us)
only in the event of (i) our liquidation if we have not completed a
business combination within the required time period or (ii) if
that public shareholder converts such public shares or sells them
to us in a tender offer in each case in connection with a business
combination which we consummate or in connection with an amendment
to our memorandum and articles of association prior to the
consummation of an initial business combination. In no other
circumstances will a public shareholder have any right or interest
of any kind to or in the trust account.
38
DIVIDEND
POLICY
We have not paid any cash dividends on our ordinary shares to date
and do not intend to pay cash dividends prior to the completion of
an initial business combination. The payment of cash dividends in
the future will be dependent upon our revenues and earnings, if
any, capital requirements and general financial condition
subsequent to completion of a business combination. The payment of
any dividends subsequent to a business combination will be within
the discretion of our board of directors at such time. It is the
present intention of our board of directors to retain all earnings,
if any, for use in our business operations and, accordingly, our
board of directors does not anticipate declaring any dividends in
the foreseeable future. In addition, our board of directors is not
currently contemplating and does not anticipate declaring any share
dividends in the foreseeable future, except if we increase the size
of the offering pursuant to Rule 462(b) under the Securities Act,
in which case we will effect a share dividend immediately prior to
the consummation of the offering in such amount as to maintain our
initial shareholders’ ownership at 20% of our issued and
outstanding ordinary shares upon the consummation of this offering
(excluding ownership of the private rights). Further, if we incur
any indebtedness, our ability to declare dividends may be limited
by restrictive covenants we may agree to in connection
therewith.
39
DILUTION
The
difference between the public offering price per share, assuming no value is attributed to the redeemable warrants included in
the units we are offering by this prospectus and included in the private units, and the pro forma net tangible book value per
share after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution
associated with the sale and exercise of warrants, including the warrants underlying the private units. Net tangible book value
per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities by
the number of outstanding ordinary shares. For the purposes of the dilution calculations, we have assumed the issuance of 1/7
of a share for each right outstanding, as such issuance will occur upon a business combination without the payment of additional
consideration. Accordingly, for the purposes of the dilution calculation, the number of shares included in the units offered hereby
will be deemed to be 4,571,428, the price per share in this offering will be deemed to be $8.75 and the private units will represent
354,285 ordinary shares.
At
August 21, 2015, our net tangible book value was a deficit of $34,077 or approximately $0.03 per share. After giving effect to
the sale of 4,000,000 ordinary shares included in the units we are offering by this prospectus, the deduction of underwriting
discounts and estimated expenses of this offering, the sale of 310,000 private units, and assuming the issuance of 615,713 shares
for the outstanding rights (including the private rights), our pro forma net tangible book value at August 21, 2015 would have
been $5,000,004 or $2.13 per share, representing an immediate increase in net tangible book value of $2.16 per share to the initial
shareholders and an immediate dilution of 75.6% per share or $6.62 to new investors not exercising their conversion/tender rights.
For purposes of presentation, our pro forma net tangible book value after this offering is $36,366,019 less than it otherwise
would have been because if we effect a business combination, the ability of public shareholders (including Mendakota Casualty Company and Bob Goldstein but not our other initial shareholders)
to exercise conversion rights or sell their shares to us in any tender offer may result in the conversion or tender of up to 3,582,859
shares sold in this offering.
The
following table illustrates the dilution to the new investors on a per-share basis inclusive of the shares underlying the rights
included in the units, assuming no value is attributed to the redeemable warrants:
|
Public
offering price
|
|
|
|
|
|
$
|
8.75
|
|
|
Net
tangible book value before this offering
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
Increase
attributable to new investors and private sales
|
|
|
2.16
|
|
|
|
|
|
|
Pro
forma net tangible book value after this offering
|
|
|
|
|
|
|
2.13
|
|
|
Dilution
to new investors
|
|
|
|
|
|
$
|
6.62
|
|
|
Percentage
of dilution to new investors
|
|
|
|
|
|
|
75.6
|
%
|
The following table sets forth information with respect to our
initial shareholders and the new investors:
|
|
|
|
|
|
|
Average
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial
shareholders
(1)
|
|
1,302,857
|
|
22.0
|
%
|
|
$
|
2,675,000
|
|
6.2
|
%
|
|
$
|
2.05
|
|
Underwriters
|
|
51,428
|
|
0.9
|
%
|
|
|
450,100
|
|
1.0
|
%
|
|
$
|
8.75
|
|
New
investors
|
|
4,571,428
|
|
77.1
|
%
|
|
|
40,000,000
|
|
92.8
|
%
|
|
$
|
8.75
|
|
|
|
5,925,713
|
|
100
|
%
|
|
$
|
43,125,100
|
|
100
|
%
|
|
|
|
40
The pro forma net tangible book value after the offering is
calculated as follows:
|
Numerator:
|
|
|
|
|
|
Net
tangible book value before this offering
|
|
$
|
(34,077
|
)
|
|
Net
proceeds from this offering and private placement of private units
|
|
|
41,350,000
|
|
|
Plus:
Offering costs accrued for and paid in advance, excluded from tangible book value
|
|
|
50,000
|
|
|
Plus:
Proceeds from the sale of unit purchase option to underwriters
|
|
|
100
|
|
|
Less:
Proceeds held in trust subject to conversion/tender
|
|
|
(36,366,019
|
)
|
|
|
|
$
|
5,000,004
|
|
|
Denominator:
|
|
|
|
|
|
Ordinary
shares outstanding prior to this offering
(1)
|
|
|
1,000,000
|
|
|
Ordinary
shares to be sold in this offering
|
|
|
4,000,000
|
|
|
Ordinary
shares underlying the rights to be sold in this offering
|
|
|
571,428
|
|
|
Ordinary
shares to be sold in private placement
|
|
|
310,000
|
|
|
Ordinary
shares underlying the rights to be sold in private placement
|
|
|
44,285
|
|
|
Less:
Shares subject to conversion/tender
|
|
|
(3,582,859
|
)
|
|
|
|
|
2,342,854
|
|
41
CAPITALIZATION
The following table sets forth our capitalization at August 21,
2015 and as adjusted to give effect to the sale of our units and
the private units and the application of the estimated net proceeds
derived from the sale of such securities.
|
|
|
|
|
|
|
|
|
|
|
Due
to related party
(2)
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
Ordinary
shares, $0.0001 par value, -0- and 3,582,859 shares are subject to possible conversion/tender
|
|
|
—
|
|
|
|
36,366,019
|
|
|
Preferred
shares, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Ordinary
shares, $0.0001 par value, 100,000,000 shares authorized, 1,150,000 shares issued and outstanding, actual; 1,727,141 shares issued
and outstanding
(3)
(excluding 3,582,859 shares subject to possible conversion/tender),
as adjusted
|
|
|
115
|
|
|
|
173
|
|
|
Additional
paid-in capital
|
|
|
24,885
|
|
|
|
5,008,908
|
|
|
Accumulated
deficit
|
|
|
(9,077
|
)
|
|
|
(9,077
|
)
|
|
Total
shareholders’ equity
|
|
|
15,923
|
|
|
|
5,000,004
|
|
|
Total
capitalization
|
|
$
|
45,923
|
|
|
$
|
41,366,023
|
|
42
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
We were formed on July 1, 2015 as a Cayman Islands exempted company
to serve as a vehicle to effect a merger, share exchange, asset
acquisition, share purchase, recapitalization, reorganization or
similar business combination with one or more target businesses.
Our efforts to identify a prospective target business will not be
limited to a particular industry or geographic location, although
we intend to focus our search for target businesses in the Andean
region of South America and in Central America. We intend to
utilize cash derived from the proceeds of this offering, our
securities, debt or a combination of cash, securities and debt, in
effecting a business combination. The issuance of additional
ordinary shares or preferred shares:
•
may significantly reduce the equity interest of our
shareholders;
•
may subordinate the rights of holders of ordinary shares if we
issue preferred shares with rights senior to those afforded to our
ordinary shares;
•
will likely cause a change in control if a substantial number of
our ordinary shares are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards,
if any, and most likely will also result in the resignation or
removal of our present officers and directors; and
•
may adversely affect prevailing market prices for our
securities.
Similarly, if we issue debt securities, it could result in:
•
default and foreclosure on our assets if our operating revenues
after a business combination are insufficient to pay our debt
obligations;
•
acceleration of our obligations to repay the indebtedness even if
we have made all principal and interest payments when due if the
debt security contains covenants that required the maintenance of
certain financial ratios or reserves and we breach any such
covenant without a waiver or renegotiation of that covenant;
•
our immediate payment of all principal and accrued interest, if
any, if the debt security is payable on demand; and
•
our inability to obtain additional financing, if necessary, if the
debt security contains covenants restricting our ability to obtain
additional financing while such security is outstanding.
Liquidity and Capital
Resources
As indicated in the accompanying financial statements, at August
21, 2015, we had no cash and cash equivalents and a working capital
deficiency of $34,077. Further, we have incurred and expect to
continue to incur significant costs in pursuit of our financing and
acquisition plans. Management’s plans to address this
uncertainty through this offering are discussed above. Our plans to
raise capital or to consummate our initial business combination may
not be successful. These factors, among others, raise substantial
doubt about our ability to continue as a going concern.
Our
liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the insider shares and advances from B.
Luke Weil in an aggregate amount of $30,000 that is more fully described below. We estimate that the net proceeds from (1) the
sale of the units in this offering, after deducting offering expenses of approximately $450,000 and underwriting discounts and
commissions of $1,300,000 (or $1,495,000 if the over-allotment option is exercised in full) and (2) the sale of the private units
for a purchase price of $3,100,000 (or $3,385,000 if the over-allotment option is exercised in full), will be $41,350,000 (or
$47,440,000 if the over-allotment option is exercised in full). $40,600,000 (or $46,690,000 if the over-allotment option is exercised
in full) will be held in the trust account. The remaining $750,000 (whether or not the over-allotment option is exercised in full)
will not be held in the trust account.
We intend to use substantially
all of the net proceeds of this offering, including the funds held
in the trust account, to acquire a target business or businesses
and to pay our expenses relating thereto, including a cash fee of
$250,000 payable to B. Riley & Co.
upon consummation of
this offering for certain advisory services in connection with our
initial business combination and a cash fee equal to 4.0% of the
gross proceeds of this offering payable to EarlyBirdCapital upon
consummation of our initial business combination for assisting us
in connection with such business combination. To the extent that
our share capital is used in whole or in part as consideration to
effect our initial business combination, the remaining proceeds
held in the trust account as well
43
as any other net proceeds not expended will be used as working
capital to finance the operations of the target business. Such
working capital funds could be used in a variety of ways including
continuing or expanding the target business’ operations, for
strategic acquisitions and for marketing, research and development
of existing or new products. Such funds could also be used to repay
any operating expenses or finders’ fees which we had incurred
prior to the completion of our initial business combination if the
funds available to us outside of the trust account were
insufficient to cover such expenses.
Over
the next 21 months (assuming a business combination is not consummated prior thereto), we will be using the funds held outside
of the trust account, plus any interest earned on the funds held in the trust account and released to us as described in this
prospectus, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective
target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing
corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring,
negotiating and consummating the business combination. We anticipate that we will incur approximately:
•
$250,000 payable to B. Riley & Co. for providing M+A advisory
services as described herein;
•
$175,000 of expenses for the search for target businesses and for
the legal, accounting and other third-party expenses attendant to
the due diligence investigations, structuring and negotiating of a
business combination;
•
$50,000 of expenses for the due diligence and investigation of a
target business by our officers, directors and initial
shareholders;
•
$100,000 of expenses in legal and accounting fees relating to our
SEC reporting obligations; and
•
$175,000 for general working capital that will be used for
miscellaneous expenses, including director and officer liability
insurance premiums.
If our estimates of the costs of undertaking in-depth due diligence
and negotiating our initial business combination is less than the
actual amount necessary to do so, or the amount of interest
available to us from the trust account is less than we expect as a
result of the current interest rate environment, we may have
insufficient funds available to operate our business prior to our
initial business combination. Moreover, we may need to obtain
additional financing either to consummate our initial business
combination or because we become obligated to redeem a significant
number of our public shares upon consummation of our initial
business combination, in which case we may issue additional
securities or incur debt in connection with such business
combination. Subject to compliance with applicable securities laws,
we would only consummate such financing simultaneously with the
consummation of our initial business combination. Following our
initial business combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our
obligations.
Related Party
Transactions
As of August 21, 2015, B. Luke Weil advanced to us an aggregate of
$30,000 on a non-interest bearing basis for payment of offering
expenses on our behalf. The advances are payable without interest
on the date on which we consummate our initial public offering. The
advances will be repaid out of the proceeds of this offering not
being placed in the trust account.
We maintain our principal executive offices at office space
provided to us at no cost by a third party affiliated with B. Luke
Weil, one of our directors.
We are also permitted to pay consulting fees to our officers,
directors, shareholders or their affiliates for assisting us in
consummating our initial business combination in an amount not to
exceed an aggregate of $____.
Our
initial shareholders and EarlyBirdCapital have committed to purchase an aggregate of
310,000
private
units at a price of $10.00 per unit ($3,100,000 in the aggregate) in a private placement that will occur simultaneously with the
closing of this offering. They have also agreed that if the over-allotment option is exercised by the underwriters, they will
purchase from us at a price of $10.00 per unit an additional number of private units (up to a maximum of 28,500 private units)
pro rata with the amount of the over-allotment option exercised so that at least $10.15 per share sold to the public in this offering
is held in trust regardless of whether the over-allotment option is exercised in full or part. These additional private units
will be purchased in a private placement that will occur simultaneously with the purchase of units resulting from the exercise
of the over-allotment option.
If
needed to finance transaction costs in connection with searching for a target business or consummating an intended initial business
combination, our initial shareholders, officers, directors or their affiliates may, but are not obligated to, loan us funds as
44
may
be required. In the event that the initial business combination does not close, we may use a portion of the working capital held
outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment.
Such loans would be evidenced by promissory notes. The notes would either be paid upon consummation of our initial business combination,
without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our
business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders
being issued 57,142 ordinary shares if $500,000 of notes were so converted as the rights included in the units would result in
an additional 7,142 shares being issued, as well as 50,000 warrants to purchase 25,000 ordinary shares). We believe the purchase
price of these units will approximate the fair value of such units when issued. However, if it is determined, at the time of issuance,
that the fair value of such units exceeds the purchase price, we would record compensation expense for the excess of the fair
value of the units on the day of issuance over the purchase price in accordance with Accounting Standards Codification (“ASC”)
718 — Compensation — Stock Compensation.
Controls and
Procedures
We are not currently required to maintain an effective system of
internal controls as defined by Section 404 of the Sarbanes-Oxley
Act. We will be required to comply with the internal control
requirements of the Sarbanes-Oxley Act for the fiscal year ending
December 31, 2016. As of the date of this prospectus, we have not
completed an assessment, nor have our auditors tested our systems,
of internal controls. We expect to assess the internal controls of
our target business or businesses prior to the completion of our
initial business combination and, if necessary, to implement and
test additional controls as we may determine are necessary in order
to state that we maintain an effective system of internal controls.
A target business may not be in compliance with the provisions of
the Sarbanes-Oxley Act regarding the adequacy of internal controls.
Target businesses we may consider for our initial business
combination may have internal controls that need improvement in
areas such as:
•
staffing for financial, accounting and external reporting areas,
including segregation of duties;
•
reconciliation of accounts;
•
proper recording of expenses and liabilities in the period to which
they relate;
•
evidence of internal review and approval of accounting
transactions;
•
documentation of processes, assumptions and conclusions underlying
significant estimates; and
•
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps
outside resources to determine what internal control improvements
are necessary for us to meet regulatory requirements and market
expectations for our operation of a target business, we may incur
significant expense in meeting our public reporting
responsibilities, particularly in the areas of designing,
enhancing, or remediating internal and disclosure controls. Doing
so effectively may also take longer than we expect, thus increasing
our exposure to financial fraud or erroneous financing
reporting.
Once our management’s report on internal controls is
complete, we will retain our independent auditors to audit and
render an opinion on such report when, or if, required by Section
404. The independent auditors may identify additional issues
concerning a target business’s internal controls while
performing their audit of internal control over financial
reporting.
Quantitative and
Qualitative Disclosures about Market Risk
The net proceeds of this offering, including amounts in the trust
account, will be invested in United States government treasury
bills, bonds or notes having a maturity of 180 days or less, or in
money market funds meeting the applicable conditions under Rule
2a-7 promulgated under the Investment Company Act of 1940 and that
invest solely in U.S. treasuries. Due to the short-term nature of
these investments, we believe there will be no associated material
exposure to interest rate risk.
Off-Balance Sheet
Arrangements; Commitments and Contractual Obligations; Quarterly
Results
As of the date of this prospectus, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K and did not have any commitments or contractual obligations. No
unaudited quarterly operating data is included in this prospectus
as we have conducted no operations to date.
45
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act
contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We will
qualify as an “emerging growth company” and under the
JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not
publicly traded) companies. We are electing to delay the adoption
of new or revised accounting standards, and as a result, we may not
comply with new or revised accounting standards on the relevant
dates on which adoption of such standards is required for
non-emerging growth companies. As such, our financial statements
may not be comparable to companies that comply with public company
effective dates.
46
PROPOSED
BUSINESS
Introduction
We are a Cayman Islands exempted company incorporated on July 1,
2015 for the purpose of entering into a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization
or similar business combination with one or more target
businesses.
Our efforts to identify a prospective target business will not be
limited to a particular industry or geographic location, although
we intend to focus our search for target businesses in the Andean
region of South America and in Central America.
Opportunities in the
Andean Region and Central America
The
Andean region is comprised of Colombia, Chile, Peru, Ecuador and Venezuela. Within this group, we are focusing on Colombia, Chile
and Peru, which offer growth rates that are above average in South America as well as stable political and macro-economic frameworks.
We intend to capitalize on opportunities presented by high growth rates within these countries, as well as in neighboring Panama
and other countries in Central America.
Local capital markets have been maturing in tandem with the
stabilization of domestic economic conditions, but still lack the
depth and liquidity seen in developed markets. While Andean
regional capital markets have begun to mature in recent years,
regulatory hurdles and the still-limited size of the local stock
exchanges limit the ability of local companies to gain access to
the public equity capital markets. We believe this creates
opportunities for us to connect attractive and growing companies in
the Andean region seeking capital from the U.S. capital
markets.
Notwithstanding
the foregoing, many of the countries in this area are still in the development stage and are maturing. This often results in challenges
for management teams in areas such as reconciling financial reporting standards to those of more established countries. Additional
challenges to doing business in these countries include potential changes to tax codes, bureaucratic inefficiencies and idiosyncratic
judicial systems. These challenges may negatively impact a target business’ operations or profitability more than if we
acquired a target business in a more established jurisdiction.
Colombia
We
believe Colombia is a country where there are a large number of attractive potential business combination targets due to the size
and growth of the economy as well as favorable regulatory and government environment. Colombia is now the third largest economy
in South America, with an average GDP growth rate of 4.6% between 2010 and 2014 according to the World Bank. Growth is underpinned
by healthy expansion in domestic consumption and investment.
According to the International Monetary Fund, over the last decade,
the Colombian government has adhered to a macroeconomic policy
framework that has yielded stable and strong economic growth while
reducing vulnerabilities. The main pillars of this framework have
been:
•
an
inflation-limiting regime;
•
responsible fiscal management;
•
reduction of external debt as a percentage of GDP; and
•
a
managed floating exchange rate.
This successful set of policies has, in turn, boosted consumer
confidence and the purchasing power of consumers in the domestic
market. We believe this is reflected in the positive performance of
the services and consumer product industries.
Structural improvements in the economy are reflected in
Colombia’s foreign currency bond receiving an investment
grade rating. We believe that these improvements have not only
reduced the cost of funding for the government and local companies,
but have also made Colombia appealing to international investors,
boosting the prospects for future capital inflows.
According to central bank chief Jose Dario Uribe, foreign direct
investment in Colombia has increased in recent years, from $6.8
billion in 2010 to $16.8 billion in 2013. Although direct
investment has declined in the past two years, it is still
anticipated to be between $10 and $13 billion in 2015. Colombia now
ranks 34
th
out of 189 economies in World Bank indicators on ease of
47
doing business, an important improvement over the past five years.
Foreign direct investment has been primarily concentrated in the
mining and energy sectors, resulting in gains in the production
volumes of oil, natural gas, coal, and gold.
In addition, the U.S.-Colombia Trade Promotion Agreement took
effect on May 15, 2012. As a result of the Agreement, 80 percent of
U.S. consumer and industrial goods exports to Colombia are no
longer subject to tariffs. Tariffs on the rest of those products
will be phased out over ten years.
Peru
According to the International Monetary Fund, per-capita income has
grown approximately 50% in the last decade, allowing a significant
reduction in poverty — from 59% in 2004 to 23% in 2014. While
the country has benefited from high commodities prices,
particularly for copper and gold, we believe that the multi-year
trend of economic expansion has been made possible by prudent
macroeconomic and monetary policies.
Peru was granted investment grade by the three leading rating
agencies between 2008 and 2009, reflecting these structural and
social achievements.
Strong growth prospects, exemplary economic management, and
exposure to rising commodity prices have made Peru a favored
destination for foreign investors. According to the Central Reserve
Bank of Peru, Peru received foreign direct investments of
approximately $7.9 billion in 2014.
Panama
Panama has been among the fastest growing economies in the
Americas, posting average nominal growth rates of more than 8.7%
between 2006 and 2014 according to the International Monetary Fund.
During the 2015 Article IV consultation, the International Monetary
Fund concluded that “over the medium term, the expanded canal
and new mining projects should help maintain growth at
6–7%.”
Our management team also believes the expansion of the Panama Canal
coupled with the Panama-US free trade agreement will not only help
to consolidate Panama as the central commercial hub for the
Americas, but will also have an indirect positive effect on
investment into manufacturing industries. The treaty is also
expected to stimulate competitiveness and foment innovation while
generating new jobs. A bright outlook for growth, proper fiscal
management, and reduction of public debt earned Panama an upgrade
into investment grade in early 2010.
Chile
Chile has long been considered one of the most stable and best
managed economies in Latin America. Chile has held investment grade
status for more than 25 years.
Chile boasts a highly open and market-oriented economy. Chile is a
member of the Rio Group, a full member of APEC, a founding member
of UNASUR, and a member of OECD. The Chilean government has
continuously sought to expand global commercial ties, as evidenced
by the 60 bilateral free trade agreements the country has signed
with Europe, China, and the United States, among others. According
to the Banco Central de Chile, GDP Annual Growth Rate in Chile
averaged 5.30% from 1987 until 2015.
Competitive
Advantages
We believe our competitive strengths to be the following:
Status as a Public Company
We believe our structure will make us an attractive business
combination partner to target businesses. As an existing public
company, we offer a target business an alternative to the
traditional initial public offering through a merger or other
business combination. In this situation, the owners of the target
business would exchange their shares in the target business for our
shares or for a combination of shares and cash, allowing us to
tailor the consideration to the specific needs of the sellers. We
believe target businesses might find this method a more certain and
cost effective method to becoming a public company than the typical
initial public offering. In a typical initial public offering,
there are additional expenses incurred in marketing, roadshow and
public reporting efforts that will likely not be present to the
same extent in connection with a business combination with
48
us. Furthermore, once the business combination is consummated, the
target business will have effectively become public, whereas an
initial public offering is always subject to the
underwriters’ ability to complete the offering as well as
general market conditions that could prevent the offering from
occurring. Once public, we believe the target business would then
have greater access to capital and an additional means of providing
management incentives consistent with shareholders’ interests
than it would have as a privately-held company. It can offer
further benefits by augmenting a company’s profile among
potential new customers and vendors and aid in attracting talented
employees.
While we believe that our status as a public company will make us
an attractive business partner, some potential target businesses
may view the inherent limitations in our status as a blank check
company as a deterrent and may prefer to effect a business
combination with a more established entity or with a private
company.
Financial Position
With
funds held in trust available for our initial business combination initially in the amount of $40,600,000 (or $46,690,000 if the
over-allotment option is exercised in full), we offer a target business a variety of options such as providing the owners of a
target business with shares in a public company and a public means to sell such shares, providing cash for stock, and providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio.
Because we are able to consummate our initial business combination using our cash, debt or equity securities, or a combination
of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration
to be paid to the target business to fit its needs and desires. However, since we have no specific business combination under
consideration, we have not taken any steps to secure third party financing and it may not be available to us.
Management Operating and Investing Experience
We believe that our executive officers possess the experience,
skills and contacts necessary to source, evaluate, and execute an
attractive business combination. Several of our officers and
directors were previously officers, directors or advisors and
consultants to Andina I. We intend to leverage the contacts and
relationships of our executive officers, as well as those of our
other directors, to source, evaluate and execute business
combination opportunities.
Effecting a Business
Combination
General
We are not presently engaged in, and we will not engage in, any
substantive commercial business for an indefinite period of time
following this offering. We intend to utilize cash derived from the
proceeds of this offering and the private placement of private
rights, our share capital, debt or a combination of these in
effecting a business combination. Although substantially all of the
net proceeds of this offering and the private placement of private
rights are intended to be applied generally toward effecting a
business combination as described in this prospectus, the proceeds
are not otherwise being designated for any more specific purposes.
Accordingly, investors in this offering are investing without first
having an opportunity to evaluate the specific merits or risks of
any one or more business combinations. A business combination may
involve the acquisition of, or merger with, a company which does
not need substantial additional capital but which desires to
establish a public trading market for its shares, while avoiding
what it may deem to be adverse consequences of undertaking a public
offering itself. These include time delays, significant expense,
loss of voting control and compliance with various Federal and
state securities laws. In the alternative, we may seek to
consummate a business combination with a company that may be
financially unstable or in its early stages of development or
growth. While we may seek to effect simultaneous business
combinations with more than one target business, we will probably
have the ability, as a result of our limited resources, to effect
only a single business combination.
We Have Not Identified a Target Business
To date, we have not selected any target business on which to
concentrate our search for a business combination. None of our
officers, directors, initial shareholders and other affiliates has
engaged in discussions on our behalf with representatives of other
companies regarding the possibility of a potential merger, share
exchange, asset acquisition or other similar business combination
with us, nor have we, nor any of our agents or affiliates, been
approached by any candidates (or representatives of any candidates)
with respect to a possible business combination with our company.
Additionally, we have not contacted any of the prospective target
businesses that Andina I, the only other blank check company that
our principals have been involved with, had considered and
rejected. We do not currently intend to contact any of such
targets; however, we may do so in the future if
49
we become aware that the valuations, operations, profits or
prospects of such target business, or the benefits of any potential
transaction with such target business, would be attractive.
We have not, nor has anyone on our behalf, taken any measure,
directly or indirectly, to identify or locate any suitable
acquisition candidate, nor have we engaged or retained any agent or
other representative to identify or locate such an acquisition
candidate. We have also not conducted any research with respect to
identifying the number and characteristics of the potential
acquisition candidates. As a result, we cannot assure you that we
will be able to locate a target business or that we will be able to
engage in a business combination with a target business on
favorable terms or at all.
Subject to the limitations that a target business have a fair
market value of at least 80% of the balance in the trust account at
the time of the execution of a definitive agreement for our initial
business combination, as described below in more detail, we will
have virtually unrestricted flexibility in identifying and
selecting a prospective acquisition candidate. We have not
established any other specific attributes or criteria (financial or
otherwise) for prospective target businesses. Accordingly, there is
no basis for investors in this offering to evaluate the possible
merits or risks of the target business with which we may ultimately
complete a business combination. To the extent we effect a business
combination with a financially unstable company or an entity in its
early stage of development or growth, including entities without
established records of sales or earnings, we may be affected by
numerous risks inherent in the business and operations of
financially unstable and early stage or potential emerging growth
companies. Although our management will endeavor to evaluate the
risks inherent in a particular target business, we cannot assure
you that we will properly ascertain or assess all significant risk
factors.
Sources of Target Businesses
We anticipate that target business candidates will be brought to
our attention from various unaffiliated sources, including
investment bankers, venture capital funds, private equity funds,
leveraged buyout funds, management buyout funds and other members
of the financial community. Target businesses may be brought to our
attention by such unaffiliated sources as a result of being
solicited by us through calls or mailings which will not commence
until after the completion of this offering. These sources may also
introduce us to target businesses they think we may be interested
in on an unsolicited basis, since many of these sources will have
read this prospectus and know what types of businesses we are
targeting. Our officers and directors, as well as their respective
affiliates, may also bring to our attention target business
candidates that they become aware of through their business
contacts as a result of formal or informal inquiries or discussions
they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of
professional firms or other individuals that specialize in business
acquisitions on any formal basis (other than EarlyBirdCapital and
B. Riley & Co. as described below and elsewhere in this
prospectus), we may engage these firms or other individuals in the
future, in which event we may pay a finder’s fee, consulting
fee or other compensation to be determined in an arm’s length
negotiation based on the terms of the transaction. In no event,
however, will any of our existing officers, directors, special
advisors or initial shareholders, or any entity with which they are
affiliated, be paid any finder’s fee, consulting fee or other
compensation prior to, or for any services they render in order to
effectuate, the consummation of a business combination (regardless
of the type of transaction). If we decide to enter into a business
combination with a target business that is affiliated with our
officers, directors or initial shareholders, we will do so only if
we have obtained an opinion from an independent investment banking
firm that the business combination is fair to our unaffiliated
shareholders from a financial point of view. However, as of the
date of this prospectus, there is no affiliated entity that we
consider a business combination target.
We
have engaged B. Riley & Co. to provide certain advisory services in connection with our initial business combination. In exchange
for such services, we have agreed to pay B. Riley $250,000 in cash upon the consummation of the offering.
Selection of a Target Business and Structuring of a Business
Combination
Subject to the limitations that a target business have a fair
market value of at least 80% of the balance in the trust account at
the time of the execution of a definitive agreement for our initial
business combination, as described below in more detail, our
management will have virtually unrestricted flexibility in
identifying and selecting a prospective target business. We have
not established any other specific attributes or criteria
(financial or otherwise) for prospective target businesses. In
evaluating a prospective target business, our management may
consider a variety of factors, including one or more of the
following:
•
financial condition and results of operation;
•
growth potential;
50
•
experience and skill of management and availability of additional
personnel;
•
capital requirements;
•
competitive position;
•
barriers to entry;
•
stage of development of its products, processes or services;
•
degree of current or potential market acceptance of the products,
processes or services;
•
proprietary features and degree of intellectual property or other
protection for its products, processes or services;
•
regulatory environment of the industry; and
•
costs associated with effecting the business combination.
We believe such factors will be important in evaluating prospective
target businesses, regardless of the location or industry in which
such target business operates. However, this list is not intended
to be exhaustive. Furthermore, we may decide to enter into a
business combination with a target business that does not meet
these criteria and guidelines.
Any evaluation relating to the merits of a particular business
combination will be based, to the extent relevant, on the above
factors as well as other considerations deemed relevant by our
management in effecting a business combination consistent with our
business objective. In evaluating a prospective target business, we
will conduct an extensive due diligence review which will
encompass, among other things, meetings with incumbent management
and inspection of facilities, as well as review of financial and
other information which is made available to us. This due diligence
review will be conducted either by our management or by
unaffiliated third parties we may engage, although we have no
current intention to engage any such third parties.
The time and costs required to select and evaluate a target
business and to structure and complete the business combination
cannot presently be ascertained with any degree of certainty. Any
costs incurred with respect to the identification and evaluation of
a prospective target business with which a business combination is
not ultimately completed will result in a loss to us and reduce the
amount of capital available to otherwise complete a business
combination.
Fair Market Value of Target Business
Pursuant to Nasdaq listing rules, the target business or businesses
that we acquire must collectively have a fair market value equal to
at least 80% of the balance of the funds in the trust account at
the time of the execution of a definitive agreement for our initial
business combination, although we may acquire a target business
whose fair market value significantly exceeds 80% of the trust
account balance. We currently anticipate structuring a business
combination to acquire 100% of the equity interests or assets of
the target business or businesses. We may, however, structure a
business combination where we merge directly with the target
business or where we acquire less than 100% of such interests or
assets of the target business in order to meet certain objectives
of the target management team or shareholders or for other reasons,
but we will only complete such business combination if the
post-transaction company owns or acquires 50% or more of the
outstanding voting securities of the target or otherwise acquires a
controlling interest in the target sufficient for it not to be
required to register as an investment company under the Investment
Company Act. Even if the post-transaction company owns or acquires
50% or more of the voting securities of the target, our
shareholders prior to the business combination may collectively own
a minority interest in the post-transaction company, depending on
valuations ascribed to the target and us in the business
combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange
for all of the outstanding capital of a target. In this case, we
could acquire a 100% controlling interest in the target. However,
as a result of the issuance of a substantial number of new shares,
our shareholders immediately prior to our initial business
combination could own less than a majority of our outstanding
shares subsequent to our initial business combination. If less than
100% of the equity interests or assets of a target business or
businesses are owned or acquired by the post-transaction company,
only the portion of such business or businesses that is owned or
acquired is what will be valued for purposes of the 80% of net
assets test. In order to consummate such an acquisition, we may
issue a significant amount of our debt or equity securities to the
sellers of such businesses and/or seek to raise additional funds
through a private offering of debt or equity securities. Since we
have no specific business combination under consideration, we have
not entered into any such fund raising arrangement and have no
51
current intention of doing so. The fair market value of the target
will be determined by our board of directors based upon one or more
standards generally accepted by the financial community (such as
actual and potential sales, earnings, cash flow and/or book value).
If our board is not able to independently determine that the target
business has a sufficient fair market value, we will obtain an
opinion from an unaffiliated, independent investment banking firm,
or another independent entity that commonly renders valuation
opinions on the type of target business we are seeking to acquire,
with respect to the satisfaction of such criteria. We will not be
required to obtain an opinion from an independent investment
banking firm, or another independent entity that commonly renders
valuation opinions on the type of target business we are seeking to
acquire, as to the fair market value if our board of directors
independently determines that the target business complies with the
80% threshold.
If
Nasdaq delists our
securities from trading on its exchange after this offering, we
would not be required to satisfy the fair market value requirement
described above and could complete a business combination with a
target business having a fair market
value substantially
below 80% of the balance in the trust account.
Lack of Business Diversification
Our business combination must be with a target business or
businesses that collectively satisfy the minimum valuation standard
at the time of such acquisition, as discussed above, although this
process may entail the simultaneous acquisitions of several
operating businesses at the same time. Therefore, at least
initially, the prospects for our success may be entirely dependent
upon the future performance of a single business. Unlike other
entities which may have the resources to complete several business
combinations of entities operating in multiple industries or
multiple areas of a single industry, it is probable that we will
not have the resources to diversify our operations or benefit from
the possible spreading of risks or offsetting of losses. By
consummating a business combination with only a single entity, our
lack of diversification may:
•
subject us to numerous economic, competitive and regulatory
developments, any or all of which may have a substantial adverse
impact upon the particular industry in which we may operate
subsequent to a business combination, and
•
result in our dependency upon the performance of a single operating
business or the development or market acceptance of a single or
limited number of products, processes or services.
If we determine to
simultaneously acquire several businesses and such businesses are
owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the
simultaneous closings of the other acquisitions, which may make it
more difficult for us, and delay our ability, to complete the
business combination. With multiple acquisitions, we could also
face additional risks, including additional burdens and costs with
respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single
operating business.
Limited Ability to Evaluate the Target Business’
Management
Although we intend to scrutinize the management of a prospective
target business when evaluating the desirability of effecting a
business combination, we cannot assure you that our assessment of
the target business’ management will prove to be correct. In
addition, we cannot assure you that the future management will have
the necessary skills, qualifications or abilities to manage a
public company. Furthermore, the future role of our officers and
directors, if any, in the target business following a business
combination cannot presently be stated with any certainty. While it
is possible that some of our key personnel will remain associated
in senior management or advisory positions with us following a
business combination, it is unlikely that they will devote their
full time efforts to our affairs subsequent to a business
combination. Moreover, they would only be able to remain with the
company after the consummation of a business combination if they
are able to negotiate employment or consulting agreements in
connection with the business combination. Such negotiations would
take place simultaneously with the negotiation of the business
combination and could provide for them to receive compensation in
the form of cash payments and/or our securities for services they
would render to the company after the consummation of the business
combination. While the personal and financial interests of our key
personnel may influence their motivation in identifying and
selecting a target business, their ability to remain with the
company after the consummation of a business combination will not
be the determining factor in our decision as to whether or not we
will proceed with any potential business combination. Additionally,
our officers and directors may not have significant experience or
knowledge relating to the operations of the particular target
business.
52
Following a business combination, we may seek to recruit additional
managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to
recruit additional managers, or that any such additional managers
we do recruit will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve an Initial
Business Combination
In connection with any proposed business combination, we will
either (1) seek shareholder approval of our initial business
combination at a meeting called for such purpose at which public
shareholders may seek to convert their public shares, regardless of
whether they vote for or against the proposed business combination,
into their pro rata share of the aggregate amount then on deposit
in the trust account (net of taxes payable) or (2) provide our
public shareholders with the opportunity to sell their public
shares to us by means of a tender offer (and thereby avoid the need
for a shareholder vote) for an amount equal to their pro rata share
of the aggregate amount then on deposit in the trust account (net
of taxes payable), in each case subject to the limitations
described herein. Notwithstanding the foregoing, our initial
shareholders have agreed, pursuant to written letter agreements
with us, not to convert any public shares held by them into their
pro rata share of the aggregate amount then on deposit in the trust
account. If we determine to engage in a tender offer, such tender
offer will be structured so that each shareholder may tender any or
all of his, her or its public shares rather than some pro rata
portion of his, her or its shares. The decision as to whether we
will seek shareholder approval of a proposed business combination
or will allow shareholders to sell their shares to us in a tender
offer will be made by us based on a variety of factors such as the
timing of the transaction, whether the terms of the transaction
would otherwise require us to seek shareholder approval or whether
we were deemed to be a foreign private issuer (which would require
us to conduct a tender offer rather than seeking shareholder
approval under SEC rules). Unlike other blank check companies which
require shareholder votes and conduct proxy solicitations in
conjunction with their initial business combinations and related
conversions of public shares for cash upon consummation of such
initial business combination even when a vote is not required by
law, we will have the flexibility to avoid such shareholder vote
and allow our shareholders to sell their shares pursuant to Rule
13e-4 and Regulation 14E of the Exchange Act which regulate issuer
tender offers. In that case, we will file tender offer documents
with the SEC which will contain substantially the same financial
and other information about the initial business combination as is
required under the SEC’s proxy rules. We will consummate our
initial business combination only if we have net tangible assets of
at least $5,000,001 upon such consummation and, solely if we seek
shareholder approval, a majority of the outstanding ordinary shares
voted are voted in favor of the business combination.
We
chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under
the Securities Act. However, if we seek to consummate an initial business combination with a target business that imposes any
type of working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon
consummation of such initial business combination, our net tangible asset threshold may limit our ability to consummate such initial
business combination (as we may be required to have a lesser number of shares converted or sold to us) and may force us to seek
third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able to consummate
such initial business combination and we may not be able to locate another suitable target within the applicable time period,
if at all. Public shareholders may therefore have to wait 18 months from the closing of this offering (or 21 months if the extension
criteria described herein have been met) in order to be able to receive a pro rata share of the trust account.
Our
initial shareholders and our officers and directors have agreed (1) to vote any ordinary shares owned by them in favor of any
proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder vote to approve a proposed
initial business combination and (3) not sell any ordinary shares in any tender in connection with a proposed initial business
combination. EarlyBirdCapital has also agreed to vote their private shares in favor of any proposed business combination. As a
result, if we sought shareholder approval of a proposed transaction, we would need only 1,345,001 (or approximately 33.6%) of
the 4,000,000 public shares sold in this offering to be voted in favor of the transaction in order to have such transaction approved
(assuming the over-allotment option is not exercised and the initial shareholders do not purchase any units in this offering or
units or shares in the after market).
None of our officers, directors, initial shareholders or their
affiliates has indicated any intention to purchase units or
ordinary shares in this offering or from persons in the open market
or in private transactions. However, if we hold a meeting to
approve a proposed business combination and a significant number of
shareholders vote, or indicate an intention to vote, against such
proposed business combination, our officers, directors, initial
shareholders or their affiliates could make such purchases in the
open market or in private transactions in order to influence the
vote. Notwithstanding the foregoing, our officers, directors,
initial shareholders and their affiliates will not make purchases
of ordinary shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act, which are rules designed to stop
potential manipulation of a company’s stock.
53
Conversion/Tender Rights
At
any meeting called to approve an initial business combination, public shareholders (including Mendakota Casualty Company and Bob Goldstein but not our
other initial shareholders) may seek to convert their public shares, regardless of whether they vote for or against the proposed
business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then
due but not yet paid. Notwithstanding the foregoing, our initial shareholders have agreed, pursuant to written letter agreements
with us, not to convert any public shares held by them into their pro rata share of the aggregate amount then on deposit in the
trust account. The conversion rights will be effected under our amended and restated memorandum and articles of association and
Cayman Islands law as repurchases. If we hold a meeting to approve an initial business combination, a holder will always have
the ability to vote against a proposed business combination and not seek conversion of his shares.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate of his or any other person with whom he is acting in
concert or as a “group” (as defined in Section 13(d)(3)
of the Exchange Act) will be restricted from seeking conversion
rights with respect to 20% or more of the ordinary shares sold in
this offering. Accordingly, all shares in excess of 20% of the
shares sold in this offering held by a holder will not be converted
to cash. We believe this restriction will prevent shareholders from
accumulating large blocks of shares before the vote held to approve
a proposed business combination and attempt to use the conversion
right as a means to force us or our management to purchase their
shares at a significant premium to the then current market price.
By limiting a shareholder’s ability to convert no more than
20% of the ordinary shares sold in this offering, we believe we
have limited the ability of a small group of shareholders to
unreasonably attempt to block a transaction which is favored by our
other public shareholders.
Alternatively, if we engage in a tender offer, each public
shareholder will be provided the opportunity to sell his public
shares to us in such tender offer. The tender offer rules require
us to hold the tender offer open for at least 20 business days.
Accordingly, this is the minimum amount of time we would need to
provide holders to determine whether they want to sell their public
shares to us in the tender offer or remain an investor in our
company.
Our
initial shareholders, officers and directors and EarlyBirdCapital will not have conversion rights with respect to any ordinary
shares owned by them, directly or indirectly, whether acquired prior to this offering or purchased by them in this offering or
in the aftermarket; provided that Mendakota Casualty Company and Bob Goldstein would be allowed to convert or sell to us any public shares they purchase
in this offering or in the aftermarket.
We may also require public shareholders, whether they are a record
holder or hold their shares in “street name,” to either
tender their certificates to our transfer agent or to deliver their
shares to the transfer agent electronically using Depository Trust
Company’s DWAC (Deposit/Withdrawal At Custodian) System, at
the holder’s option, at any time at or prior to the vote on
the business combination. Once the shares are converted by the
beneficial holder, and effectively repurchased by us under Cayman
Island law, the transfer agent will then update our Register of
Shareholders to reflect all conversions. The proxy solicitation
materials that we will furnish to shareholders in connection with
the vote for any proposed business combination will indicate
whether we are requiring shareholders to satisfy such delivery
requirements. Accordingly, a shareholder would have from the time
our proxy statement is mailed through the vote on the business
combination to deliver his shares if he wishes to seek to exercise
his conversion rights. Under our amended and restated memorandum
and articles of association, we are required to provide at least 10
days’ advance notice of any shareholder meeting, which would
be the minimum amount of time a shareholder would have to determine
whether to exercise conversion rights. As a result, if we require
public shareholders who wish to convert their ordinary shares into
the right to receive a pro rata portion of the funds in the trust
account to comply with the foregoing delivery requirements, holders
may not have sufficient time to receive the notice and deliver
their shares for conversion. Accordingly, investors may not be able
to exercise their conversion rights and may be forced to retain our
securities when they otherwise would not want to.
There is a nominal cost associated with this tendering process and
the act of certificating the shares or delivering them through the
DWAC System. The transfer agent will typically charge the tendering
broker $45 and it would be up to the broker whether or not to pass
this cost on to the converting holder. However, this fee would be
incurred regardless of whether or not we require holders seeking to
exercise conversion rights. The need to deliver shares is a
requirement of exercising conversion rights regardless of the
timing of when such delivery must be effectuated. However, in the
event we require shareholders seeking to exercise conversion rights
to deliver their shares prior to the consummation of the proposed
business combination and the proposed business combination is not
consummated, this may result in an increased cost to
shareholders.
Any request to convert or tender such shares once made, may be
withdrawn at any time up to the vote on the proposed business
combination or expiration of the tender offer. Furthermore, if a
holder of a public share delivered his certificate in connection
with an election of their conversion or tender and subsequently
decides prior to the vote on the business combination or the
54
expiration of the tender offer not to elect to exercise such
rights, he may simply request that the transfer agent return the
certificate (physically or electronically).
If the initial business combination is not approved or completed
for any reason, then our public shareholders who elected to
exercise their conversion or tender rights would not be entitled to
convert their shares for the applicable pro rata share of the trust
account. In such case, we will promptly return any shares delivered
by public holders.
Automatic Liquidation of Trust Account if No Business
Combination
If
we do not complete a business combination within 18 months from the consummation of this offering (or 21 months from the consummation
of this offering if we have entered into a letter of intent, memorandum of understanding or definitive agreement with a target
business for a business combination within 18 months from the consummation of this offering and a business combination has not
yet been consummated within such 18-month period), it will trigger our automatic winding up, dissolution and liquidation pursuant
to the terms of our amended and restated memorandum and articles of association. As a result, this has the same effect as if we
had formally gone through a voluntary liquidation procedure under the Companies Law. Accordingly, no vote would be required from
our shareholders to commence such a voluntary winding up, dissolution and liquidation.
The amount in the trust
account (less $400 representing the aggregate nominal par value of
the shares of our public shareholders) under the Companies Law will
be treated as share premium which is distributable under the
Companies Law provided that immediately following the date on which
the proposed distribution is proposed to be made, we are able to
pay our debts as they fall due in the ordinary course of business.
If we are forced to liquidate the trust account, we anticipate that
we would distribute to our public shareholders the amount in the
trust account calculated as of the date that is two days prior to
the distribution date (including any accrued interest). Prior to
such distribution, we would be required to assess all claims that
may be potentially brought against us by our creditors for amounts
they are actually owed and make provision for such amounts, as
creditors take priority over our public shareholders with respect
to amounts that are owed to them. We cannot assure you that we will
properly assess all claims that may be potentially brought against
us. As such, our shareholders could potentially be liable for any
claims of creditors to the extent of distributions received by them
as an unlawful payment in the event we enter an insolvent
liquidation. Furthermore, while we will seek to have all vendors
and service providers (which would include any third parties we
engaged to assist us in any way in connection with our search for a
target business) and prospective target businesses execute
agreements with us waiving any right, title, interest or claim of
any kind they may have in or to any monies held in the trust
account, there is no guarantee that they will execute such
agreements. Nor is there any guarantee that, even if such entities
execute such agreements with us, they will not seek recourse
against the trust account or that a court would conclude that such
agreements are legally enforceable.
Each
of our initial shareholders and EarlyBirdCapital has agreed to waive its rights to participate in any liquidation of our trust
account or other assets with respect to the insider shares, private shares, private rights and private warrants and to vote their
insider shares and private shares in favor of any dissolution and plan of distribution which we submit to a vote of shareholders.
There will be no distribution from the trust account with respect to our rights, or warrants which will expire worthless.
If
we are unable to complete an initial business combination and expend all of the net proceeds of this offering, other than the
proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial
per-share distribution from the trust account would be $10.15.
The proceeds deposited in the
trust account could, however, become subject to the claims of our
creditors which would be prior to the claims of our public
shareholders. Although we will seek to have all vendors, including
lenders for money borrowed, prospective target businesses or other
entities we engage execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in
the trust account for the benefit of our public shareholders, there
is no guarantee that they will execute such agreements or even if
they execute such agreements that they would be prevented from
bringing claims against the trust account, including but not
limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver, in each case in order
to gain an advantage with a claim against our assets, including the
funds held in the trust account. If any third party refused to
execute an agreement waiving such claims to the monies held in the
trust account, we would perform an analysis of the alternatives
available to us if we chose not to engage such third party and
evaluate if such engagement would be in the best interest of our
shareholders if such third party refused to waive such claims.
Examples of possible instances where we may engage a third party
that refused to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other
consultants that would agree to execute a waiver or in cases where
management is unable to find a provider of required services
willing to provide the waiver. In any event, our management would
perform an analysis of the alternatives available to it and would
only enter into an agreement with a third party that did not
execute a waiver if management
55
believed that such third
party’s engagement would be significantly more beneficial to
us than any alternative. In addition, there is no guarantee that
such entities will agree to waive any claims they may have in the
future as a result of, or arising out of, any negotiations,
contracts or agreements with us and will not seek recourse against
the trust account for any reason.
B.
Luke Weil has agreed that, if we liquidate the trust account prior to the consummation of a business combination, he will be personally
liable to pay debts and obligations to target businesses or vendors or other entities that are owed money by us for services rendered
or contracted for or products sold to us in excess of the net proceeds of this offering not held in the trust account, but only
to the extent necessary to ensure that such debts or obligations do not reduce the amounts in the trust account and only if such
parties have not executed a waiver agreement. However, we cannot assure you that he will be able to satisfy those obligations
if he is required to do so. Accordingly, the actual per-share distribution could be less than $10.15, plus interest, due to claims
of creditors. Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which
is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in
our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent
any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public shareholders at
least $10.15 per share.
Competition
In identifying, evaluating and
selecting a target business, we may encounter intense competition
from other entities having a business objective similar to ours.
Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly
or through affiliates. Many of these competitors possess greater
technical, human and other resources than us and our financial
resources will be relatively limited when contrasted with those of
many of these competitors. While we believe there may be numerous
potential target businesses that we could acquire with the net
proceeds of this offering, our ability to compete in acquiring
certain sizable target businesses may be limited by our available
financial resources.
The following also may not be viewed favorably by certain target
businesses:
•
our obligation to seek shareholder approval of a business
combination or obtain the necessary financial information to be
sent to shareholders in connection with such business combination
may delay or prevent the completion of a transaction;
•
our obligation to convert public shares held by our public
shareholders may reduce the resources available to us for a
business combination;
•
Nasdaq may require us to file a new listing application and meet
its initial listing requirements to maintain the listing of our
securities following a business combination;
•
our outstanding rights, warrants and unit purchase options, and the potential future dilution they represent;
•
our obligation to pay EarlyBirdCapital a fee of 4.0% of the gross
proceeds of this offering upon consummation of our initial business
combination;
•
our obligation to either repay or issue private rights upon
conversion of up to $500,000 of working capital loans that may be
made to us by our initial shareholders, officers, directors or
their affiliates;
•
our obligation to register the resale of the insider shares, as
well as the private rights (and underlying securities) and any
securities issued to our initial shareholders, officers, directors
or their affiliates upon conversion of working capital loans;
and
•
the impact on the target business’ assets as a result of
unknown liabilities under the securities laws or otherwise
depending on developments involving us prior to the consummation of
a business combination.
Any of these factors may place us at a competitive disadvantage in
successfully negotiating a business combination. Our management
believes, however, that our status as a public entity and potential
access to the United States public equity markets may give us a
competitive advantage over privately-held entities having a similar
business objective as ours in acquiring a target business with
significant growth potential on favorable terms. Furthermore, the
fact that we will not be required to pay our underwriters any
deferred compensation upon consummation of an initial business
combination may give us a competitive advantage over other
similarly structured blank check companies.
56
If we succeed in effecting a business combination, there will be,
in all likelihood, intense competition from competitors of the
target business. We cannot assure you that, subsequent to a
business combination, we will have the resources or ability to
compete effectively.
Facilities
We maintain our principal executive offices at 250 West
57
th
Street, Suite 2223, New York, NY 10107. This space is being
provided to us at no cost by a third party affiliated with B. Luke
Weil, one of our directors. We consider our current office space,
combined with the other office space otherwise available to our
executive officers, adequate for our current operations.
Employees
We have four executive officers. These individuals are not
obligated to devote any specific number of hours to our matters and
intend to devote only as much time as they deem necessary to our
affairs. The amount of time they will devote in any time period
will vary based on whether a target business has been selected for
the business combination and the stage of the business combination
process the company is in. Accordingly, once management locates a
suitable target business to acquire, they will spend more time
investigating such target business and negotiating and processing
the business combination (and consequently spend more time to our
affairs) than they would prior to locating a suitable target
business. We presently expect our executive officers to devote such
amount of time as they reasonably believe is necessary to our
business (which could range from only a few hours a week while we
are trying to locate a potential target business to a majority of
their time as we move into serious negotiations with a target
business for a business combination). We do not intend to have any
full time employees prior to the consummation of a business
combination.
Periodic Reporting and
Audited Financial Statements
We
have registered our units, ordinary shares, rights and warrants under the Exchange Act and have reporting obligations, including
the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, our annual report will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of
the prospective target business as part of any proxy solicitation
sent to shareholders to assist them in assessing the target
business. In all likelihood, the financial information included in
the proxy solicitation materials will need to be prepared in
accordance with U.S. GAAP or IFRS, depending on the circumstances,
and the historical financial statements may be required to be
audited in accordance with the standards of the PCAOB. The
financial statements may also be required to be prepared in
accordance with U.S. GAAP for the Form 8-K announcing the closing
of an initial business combination, which would need to be filed
within four business days thereafter. We cannot assure you that any
particular target business identified by us as a potential
acquisition candidate will have the necessary financial
information. To the extent that this requirement cannot be met, we
may not be able to acquire the proposed target business.
We may be required to have our internal control procedures audited
for the fiscal year ending December 31, 2016 as required by the
Sarbanes-Oxley Act. A target company may not be in compliance with
the provisions of the Sarbanes-Oxley Act regarding adequacy of
their internal controls. The development of the internal controls
of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such
acquisition.
We are an emerging growth company as defined in the JOBS Act and
will remain such for up to five years. However, if our
non-convertible debt issued within a three-year period or our total
revenues exceed $1 billion or the market value of our ordinary
shares that are held by non-affiliates exceeds $700 million on the
last day of the second fiscal quarter of any given fiscal year, we
would cease to be an emerging growth company as of the following
fiscal year. As an emerging growth company, we have elected, under
Section 107(b) of the JOBS Act, to take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards.
Legal
Proceedings
There is no material litigation, arbitration or governmental
proceeding currently pending against us or any of our officers or
directors in their capacity as such, and we and our officers and
directors have not been subject to any such proceeding in the 12
months preceding the date of this prospectus.
57
Comparison to Offerings
of Blank Check Companies Subject to Rule 419
The following table compares and contrasts the terms of our
offering and the terms of an offering of blank check companies
under Rule 419 promulgated by the SEC assuming that the gross
proceeds, underwriting discounts and underwriting expenses for the
Rule 419 offering are the same as this offering and that the
underwriters will not exercise their over-allotment option. None of
the terms of a Rule 419 offering will apply to this offering
because we will be listed on a national securities exchange, we
will have net tangible assets in excess of $5,000,001 upon the
successful consummation of this offering and will file a Current
Report on Form 8-K, including an audited balance sheet
demonstrating this fact.
|
|
|
|
|
Terms
Under a Rule 419 Offering
|
|
Escrow
of offering proceeds
|
|
$40,600,000
of the net offering proceeds and proceeds from the sale of the private rights will be deposited into a trust account in the United
States, maintained by Continental Stock Transfer & Trust Company, acting as trustee.
|
|
$34,830,000
of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution
or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the
beneficial interests in the account.
|
|
|
|
|
|
|
|
Investment
of net proceeds
|
|
The
$40,600,000 of the net offering proceeds and proceeds from the sale of the private rights held in trust will only be invested
in United States government treasury bills, bonds or notes with a maturity of 180 days or less or in money market funds meeting
the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in United
States government treasuries.
|
|
Proceeds
could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of
1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
|
|
|
|
|
|
|
|
Limitation on fair value or
net assets of target business
|
|
The initial target business that we acquire must
have a fair market value equal to at least 80% of the balance in
our trust account at the time of the execution of a definitive
agreement for our initial business combination.
|
|
We would be restricted from acquiring a target
business unless the fair value of such business or net assets to be
acquired represent at least 80% of the maximum offering
proceeds.
|
|
|
|
|
|
|
|
Trading
of securities issued
|
|
The
units may commence trading on or promptly after the date of this prospectus. The ordinary shares, and rights and warrants comprising
the units will begin to trade separately on the 90
th
day after the date of this
prospectus unless EarlyBirdCapital informs us of its decision to allow earlier separate trading (based upon its assessment of
the relative strengths of the securities markets and small capitalization and blank check companies in general, and the trading
pattern of, and demand for, our securities in particular), provided we have filed with the SEC a Current Report on Form 8-K, which
includes an audited balance sheet reflecting our receipt of the proceeds of this offering.
|
|
No
trading of the units or the underlying securities would be permitted until the completion of a business combination. During this
period, the securities would be held in the escrow or trust account.
|
58
|
|
|
|
|
Terms
Under a Rule 419 Offering
|
|
Exercise
of the warrants
|
|
The
warrants cannot be exercised until the completion of a business combination and, accordingly, will be exercised only after the
trust account has been terminated and distributed.
|
|
The
warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection
with the exercise would be deposited in the escrow or trust account.
|
|
|
|
|
|
|
|
Election to remain an investor
|
|
We will either (1) give our shareholders the
opportunity to vote on the business combination or (2) provide our
public shareholders with the opportunity to sell their public
shares to us in a tender offer for cash equal to their pro rata
share of the aggregate amount then on deposit in the trust account,
less taxes. If we hold a meeting to approve a proposed business
combination, we will send each shareholder a proxy statement
containing information required by the SEC. Under our amended and
restated memorandum and articles of association, we must provide at
least 10 days advance notice of any meeting of shareholders.
Accordingly, this is the minimum amount of time we would need to
provide holders to determine whether to exercise their rights to
convert their shares into cash at such a meeting or to remain an
investor in our company. Alternatively, if we do not hold a meeting
and instead conduct a tender offer, we will conduct such tender
offer in accordance with the tender offer rules of the SEC and file
tender offer documents with the SEC which will contain
substantially the same financial and other information about the
initial business combination as we would have included in a proxy
statement. The tender offer rules require us to hold the tender
offer open for at least 20 business days. Accordingly, this is the
minimum amount of time we would need to provide holders to
determine whether they want to sell their shares to us in the
tender offer or remain an investor in our company.
|
|
A prospectus containing information required by
the SEC would be sent to each investor. Each investor would be
given the opportunity to notify the company, in writing, within a
period of no less than 20 business days and no more than 45
business days from the effective date of the post-effective
amendment, to decide whether he or she elects to remain a
shareholder of the company or require the return of his or her
investment. If the company has not received the notification by the
end of the 45
th
business day, funds and interest or dividends, if any, held in the
trust or escrow account would automatically be returned to the
shareholder. Unless a sufficient number of investors elect to
remain investors, all of the deposited funds in the escrow account
must be returned to all investors and none of the securities will
be issued.
|
|
|
|
|
|
|
|
Business
combination deadline
|
|
Pursuant
to our amended and restated memorandum and articles of association, if we do not complete an initial business combination within
18 months from the consummation of this offering (or 21 months as described elsewhere herein), it will trigger our automatic winding
up, dissolution and liquidation.
|
|
If
an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds
held in the trust or escrow account would be returned to investors.
|
59
|
|
|
|
|
Terms
Under a Rule 419 Offering
|
|
Interest earned on the funds in the trust
account
|
|
There can be released to us, from time to time,
(i) any interest earned on the funds in the trust account that we
may need to pay our tax obligations and (ii) any remaining interest
earned on the funds in the trust account that we need for our
working capital requirements. The remaining interest earned on the
funds in the trust account will not be released until the earlier
of the completion of a business combination and our entry into
liquidation upon failure to effect a business combination within
the allotted time.
|
|
All interest earned on the funds in the trust
account will be held in trust for the benefit of public
shareholders until the earlier of the completion of a business
combination and our liquidation upon failure to effect a business
combination within the allotted time.
|
|
|
|
|
|
|
|
Release of funds
|
|
Except for (i) interest earned on the funds held
in the trust account that may be released to us to pay our tax
obligations and (ii) any remaining interest that we may need for
our working capital requirements that may be released to us from
the interest earned on the trust account balance described above,
the proceeds held in the trust account will not be released until
the earlier of the completion of a business combination (in which
case, the proceeds released to us will be net of the funds used to
pay converting or tendering shareholders, as the trustee will
directly send the appropriate portion of the amount held in trust
to the converting or tendering shareholders at the time of the
business combination) and the liquidation of our trust account upon
failure to effect a business combination within the allotted
time.
|
|
The proceeds held in the escrow account would
not be released until the earlier of the completion of a business
combination or the failure to effect a business combination within
the allotted time.
|
60
MANAGEMENT
Directors and Executive
Officers
Our current directors and executive officers are as follows:
|
|
|
|
|
|
|
Julio A. Torres
|
|
48
|
|
Chief Executive Officer and Director
|
|
Mauricio Orellana
|
|
50
|
|
Chief Financial Officer and Director
|
|
Eric Carrera
|
|
26
|
|
Senior Vice President
|
|
Marjorie Hernandez
|
|
35
|
|
Secretary and Treasurer
|
|
B. Luke Weil
|
|
36
|
|
Director
|
|
Matthew S. N. Kibble
|
|
36
|
|
Director
|
|
Edward G. Navarro
|
|
61
|
|
Director (Non-Executive Chairman)
|
Julio A. Torres
has served as our Chief Executive Officer
and a member of our board of directors since August 2015. Since
March 2013, Mr. Torres has served as the managing partner at
Multiple Equilibria Capital, a financial advisory firm. From
October 2011 through January 2013, Mr. Torres served as Co-Chief
Executive Officer of Andina 1. He also served as a member of the
board of Andina 1 from October 2011 until its merger in December
2013 and has continued to serve on the board of Tecnoglass Inc.
since such time. From March 2008 to February 2013, Mr. Torres
served as managing director of Nexus Capital Partners, a private
equity firm. From April 2006 to February 2008, Mr. Torres served
with the Colombian Ministry of Finance acting as director general
of public credit and the treasury. From June 2002 to April 2006,
Mr. Torres served as managing director of Diligo Advisory Group, an
investment banking firm. From September 1994 to June 2002, Mr.
Torres served as vice president with JPMorgan Chase Bank. Mr.
Torres graduated from the Universidad de los Andes and received an
M.B.A. from the Kellogg Graduate School of Management at
Northwestern University and a master in public administration from
the J.F. Kennedy School of Government at Harvard University.
We believe Mr. Torres is well-qualified to serve as a member of our
board of directors due to his operational experience with Nexus
Capital Partners, his work with the Colombian government, his
extensive contacts he has fostered while working at Nexus Capital
Partners, JPMorgan Chase Bank and in the Colombian government and
his prior experience with Andina 1.
Mauricio Orellana
has served as our Chief Financial Officer
and a member of our board of directors since August 2015. Since
2013, Mr. Orellana has served as a financial consultant to
companies in Latin America in the media, infrastructure and
services sectors. From 2005 to 2013, Mr. Orellana was a Managing
Director at Stephens Inc., a private investment banking firm. From
2000 to 2005, Mr. Orellana was a Vice President and Managing
Director at Cori Capital Partners, L.P., a financial services firm.
Prior to this, he served as Investment Officer for Emerging Markets
Partnership and Inter-American Investment Corporation, each private
investment firms. Mr. Orellana received a degree in electrical
engineering from the Universidad Central de Venezuela and an M.B.A.
from the Instituto de Education Superior de Administracion.
We believe Mr. Orellana is well-qualified to serve as a member of
our board of directors due to his financial background and
knowledge of companies in the Andean region.
Eric Carrera
has served as our Senior Vice President since
August 2015. Since May 2015, Mr. Carrera has served as a financial
consultant to Hydra Management LLC, an asset management firm. Since
February 2015, Mr. Carrera has also served as a financial analyst
to Runa LLC, a beverage company that processes and sells guayusa in
the United States and Ecuador. From June 2011 to February 2015, Mr.
Carrera was an international business development associate with
Scientific Games Corporation, a supplier of technology-based
products, systems and services to gaming markets worldwide. From
September 2011 to December 2013, Mr. Carrera also acted as an
advisor to Andina 1. Mr. Carrera received a B.S. from Boston
University School of Management. Mr. Carrera is also a CFA
charterholder.
Marjorie Hernandez
has served as our Secretary since August
2015 and as our Treasurer since October 2015. Since June 2008, Ms.
Hernandez has served as Senior Vice President, FX Strategist, Latin
America for HSBC Securities (USA), Inc. Prior to this, from April
2005 to June 2008, she was the lead analyst for HSBC covering
Colombia, Peru, Ecuador and Venezuela. From July 2003 to April
2005, Ms. Hernandez was a Senior Program Associate, public policy,
for Council of the Americas, a forum dedicated to education,
debate, and dialogue in the Americas aimed at fostering an
understanding of the contemporary political, social, and economic
issues confronting Latin America, the Caribbean, and Canada, and to
increase public awareness and appreciation of the diverse cultural
heritage of the Americas and the importance of the inter-American
relationship. Ms. Hernandez received a B.A. from Columbia
University.
61
B. Luke Weil
served as our Chief Executive Officer from our
inception until August 2015 and has served as a member of our Board
of Directors since our inception. In October 2014, he founded the
Long Island Marine Purification Initiative, a non-profit foundation
established to improve the water quality on Long Island, New York,
and has served as its Chairman since such time. In November 2012,
he also co-founded Rios Nete, a clinic in the upper amazon region
of Peru. From 2008 to 2013, Mr. Weil was Vice President,
International Business Development — Latin America for
Scientific Games Corporation, a supplier of technology-based
products, systems and services to gaming markets worldwide. From
January 2013 until its merger in December 2013, Mr. Weil served as
Chief Executive Officer of Andina 1 and previously served as a
member of its board from September 2011 until March 2012. From 2006
to 2008, Mr. Weil attended Columbia Business School. From January
2004 to January 2006, Mr. Weil served as an associate of Business
Strategies & Insight, a public affairs and business consulting
firm. In January 2007, Mr. Weil pleaded guilty to two counts of
misdemeanor assault in connection with physical altercations that
took place in 2004 and 2006. From June 2002 to December 2004, Mr.
Weil served as an analyst at Bear Stearns. From September 1998 to
May 2002, Mr. Weil attended Brown University. Mr. Weil received a
B.A. from Brown University and an M.B.A. from Columbia Business
School.
We believe Mr. Weil is well-qualified to serve as a member of our
Board due to his contacts and prior experience with Andina I.
Matthew S. N. Kibble
has served as a member of our Board
since August 2015. In November 2013, Mr. Kibble founded Australy
International LLC, a boutique investment bank, and has served as a
Partner since. Since July 2013, he has also served as Principal and
an advisor to Cap-Meridian Ventures, a venture capital firm. From
October 2010 to July 2013, Mr. Kibble was the Founder and Chief
Operating Officer of Everlight Capital, LLC, a boutique investment
bank. From June 2009 to June 2010, Mr. Kibble served as Executive
Director of The Westrock Group, Inc., a broker-dealer and asset
management firm. From November 2005 to May 2009, Mr. Kibble was
with JPMorgan Securities Inc. where he worked in the institutional
equities and derivatives section. Prior to this, Mr. Kibble was an
analyst at JPMorgan Chase and GMCG, LLC. Mr. Kibble received a
Bachelor of Science and a Bachelor of Commerce from the University
of Queensland in Australia.
We believe Mr. Kibble is well-qualified to serve as a member of our
Board due to his contacts and background in investment banking.
Edward G. Navarro
has served as a member of our Board (and
Non-Executive Chairman) since October 2015. Since November 2014,
Mr. Navarro has served as the President of Engage Insurance Group
Inc., an insurance agency he founded involved in multi-risk
insurance placements. From July 2013 to November 2014, Mr. Navarro
acted as a consultant for several companies. From December 2010 to
July 2013, Mr. Navarro was with Starr Companies, a global insurance
and financial services organization, most recently acting as Head
of International Insurance Operations. From November 2008 to
December 2010, Mr. Navarro served as Global Head, Accident and
Health Business for Zurich Insurance Group, a Swiss insurance
company. From October 2005 to November 2008, Mr. Navarro served as
Vice President, Regional Head Insurance, for Citibank N.A. in
Singapore. Prior to this, Mr. Navarro served in various positions
with Prudential Plc and its affiliates.
We believe Mr. Navarro is well-qualified to serve as a member of
our Board due to his operational experience and extensive
contacts.
Our board of directors is divided into three classes with only one
class of directors being elected in each year and each class
serving a three-year term. The term of office of the first class of
directors, consisting of Edward G. Navarro, will expire at our
first annual meeting of shareholders. The term of office of the
second class of directors, consisting of Mauricio Orellana and
Matthew S. N. Kibble, will expire at the second annual meeting. The
term of office of the third class of directors, consisting of B.
Luke Weil and Julio Torres, will expire at the third annual
meeting.
Executive
Compensation
No executive officer has received any cash compensation for
services rendered to us. Other than the payment of consulting fees
to our officers, directors, shareholders or their affiliates for
assisting us in consummating our initial business combination in an
amount not to exceed an aggregate of $_____, no compensation of any
kind, including finders, consulting or other similar fees, will be
paid to any of our existing shareholders, including our directors,
or any of their respective affiliates, prior to, or for any
services they render in order to effectuate, the consummation of a
business combination. However, such individuals will be reimbursed
for any out-of-pocket expenses incurred in connection with
activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business
combinations. There is no limit on the amount of these
out-of-pocket expenses and there will be no review of the
reasonableness of the expenses by anyone other than our board of
directors and audit committee, which includes persons who may seek
reimbursement, or a court of competent jurisdiction if such
reimbursement is challenged.
62
Director
Independence
Currently B. Luke Weil, Matthew S. N. Kibble and Edward G. Navarro
would each be considered an “independent director”
under the Nasdaq listing rules, which is defined generally as a
person other than an officer or employee of the company or its
subsidiaries or any other individual having a relationship, which,
in the opinion of the company’s board of directors would
interfere with the director’s exercise of independent
judgment in carrying out the responsibilities of a director. Our
independent directors will have regularly scheduled meetings at
which only independent directors are present.
We will only enter into a business combination if it is approved by
a majority of our independent directors. Additionally, we will only
enter into transactions with our officers and directors and their
respective affiliates that are on terms no less favorable to us
than could be obtained from independent parties. Any related-party
transactions must also be approved by our audit committee and a
majority of disinterested independent directors.
Audit
Committee
Effective as of the date of
this prospectus, we have established an audit committee of the
board of directors, which will consist of B. Luke Weil, Matthew S.
N. Kibble and Edward G. Navarro, each of whom is an independent
director under Nasdaq’s listing standards. The audit
committee’s duties, which are specified in our Audit
Committee Charter, include, but are not limited to:
•
reviewing and discussing with management and the independent
auditor the annual audited financial statements, and recommending
to the board whether the audited financial statements should be
included in our Form 10-K;
•
discussing with management and the independent auditor significant
financial reporting issues and judgments made in connection with
the preparation of our financial statements;
•
discussing with management major risk assessment and risk
management policies;
•
monitoring the independence of the independent auditor;
•
verifying the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit partner
responsible for reviewing the audit as required by law;
•
reviewing and approving all related-party transactions;
•
inquiring and discussing with management our compliance with
applicable laws and regulations;
•
pre-approving all audit services and permitted non-audit services
to be performed by our independent auditor, including the fees and
terms of the services to be performed;
•
appointing or replacing the independent auditor;
•
determining the compensation and oversight of the work of the
independent auditor (including resolution of disagreements between
management and the independent auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report
or related work;
•
establishing procedures for the receipt, retention and treatment of
complaints received by us regarding accounting, internal accounting
controls or reports which raise material issues regarding our
financial statements or accounting policies; and
•
approving reimbursement of expenses incurred by our management team
in identifying potential target businesses.
Financial Experts on
Audit Committee
The audit committee will at all times be composed exclusively of
“independent directors” who are “financially
literate” as defined under Nasdaq listing standards. Nasdaq
listing standards define “financially literate” as
being able to read and understand fundamental financial statements,
including a company’s balance sheet, income statement and
cash flow statement.
63
In addition, we must certify to Nasdaq that the committee has, and
will continue to have, at least one member who has past employment
experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or
background that results in the individual’s financial
sophistication. The board of directors has determined that Edward
G. Navarro qualifies as an “audit committee financial
expert,” as defined under rules and regulations of the
SEC.
Nominating
Committee
Effective as of the date of this prospectus, we have established a
nominating committee of the board of directors, which will consist
of B. Luke Weil, Matthew S. N. Kibble and Edward G. Navarro, each
of whom is an independent director under Nasdaq’s listing
standards. The nominating committee is responsible for overseeing
the selection of persons to be nominated to serve on our board of
directors. The nominating committee considers persons identified by
its members, management, shareholders, investment bankers and
others.
Guidelines for Selecting
Director Nominees
The guidelines for selecting nominees, which are specified in the
Nominating Committee Charter, generally provide that persons to be
nominated:
•
should have demonstrated notable or significant achievements in
business, education or public service;
•
should possess the requisite intelligence, education and experience
to make a significant contribution to the board of directors and
bring a range of skills, diverse perspectives and backgrounds to
its deliberations; and
•
should have the highest ethical standards, a strong sense of
professionalism and intense dedication to serving the interests of
the shareholders.
The nominating committee will consider a number of qualifications
relating to management and leadership experience, background and
integrity and professionalism in evaluating a person’s
candidacy for membership on the board of directors. The nominating
committee may require certain skills or attributes, such as
financial or accounting experience, to meet specific board needs
that arise from time to time and will also consider the overall
experience and makeup of its members to obtain a broad and diverse
mix of board members. The nominating committee does not distinguish
among nominees recommended by shareholders and other persons.
Compensation
Committee
Effective as of the date of this prospectus, we will establish a
compensation committee of the board of directors, which will
consist of B. Luke Weil, Matthew S. N. Kibble and Edward G.
Navarro, each of whom is an independent director under
Nasdaq’s listing standards. The compensation
committee’s duties, which are specified in our Compensation
Committee Charter, include, but are not limited to:
•
reviewing and approving on an annual basis the corporate goals and
objectives relevant to our Chief Executive Officer’s
compensation, evaluating our Chief Executive Officer’s
performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our Chief Executive
Officer’s based on such evaluation;
•
reviewing and approving the compensation of all of our other
executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation
equity-based remuneration plans;
•
assisting management in complying with our proxy statement and
annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other
special compensation and benefit arrangements for our executive
officers and employees;
•
if
required, producing a report on executive compensation to be
included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to
the remuneration for directors.
64
Notwithstanding the foregoing, as indicated above, other than the
payment of consulting fees to our officers, directors, shareholders
or their affiliates for assisting us in consummating our initial
business combination in an amount not to exceed an aggregate of
$_____, no compensation of any kind, including finders, consulting
or other similar fees, will be paid to any of our existing
shareholders, including our directors, or any of their respective
affiliates, prior to, or for any services they render in order to
effectuate, the consummation of a business combination.
Accordingly, it is likely that prior to the consummation of an
initial business combination, the compensation committee will only
be responsible for the review and recommendation of any
compensation arrangements to be entered into in connection with
such initial business combination.
Code of
Ethics
Upon consummation of this offering, we will adopt a code of ethics
that applies to all of our executive officers, directors and
employees. The code of ethics codifies the business and ethical
principles that govern all aspects of our business.
Conflicts of
Interest
Potential investors should be aware of the following potential
conflicts of interest:
•
None of our officers and directors is required to commit their full
time to our affairs and, accordingly, they may have conflicts of
interest in allocating their time among various business
activities.
•
In
the course of their other business activities, our officers and
directors may become aware of investment and business opportunities
which may be appropriate for presentation to our company as well as
the other entities with which they are affiliated. Our management
has pre-existing fiduciary duties and contractual obligations and
may have conflicts of interest in determining to which entity a
particular business opportunity should be presented.
•
Our officers and directors may in the future become affiliated with
entities, including other blank check companies, engaged in
business activities similar to those intended to be conducted by
our company.
•
The insider shares owned by our officers and directors will be
released from escrow only if a business combination is successfully
completed and subject to certain other limitations. Additionally,
our officers and directors will not receive distributions from the
trust account with respect to any of their insider shares if we do
not complete a business combination. Furthermore, our initial
shareholders have agreed that the private rights will not be sold
or transferred by them until after we have completed our initial
business combination. In addition, our officers and directors may
loan funds to us after this offering and may be owed reimbursement
for expenses incurred in connection with certain activities on our
behalf which would only be repaid if we complete an initial
business combination. For the foregoing reasons, the personal and
financial interests of our directors and executive officers may
influence their motivation in identifying and selecting a target
business, completing a business combination in a timely manner and
securing the release of their shares.
Under Cayman Islands law, directors and officers owe the following
fiduciary duties:
(i)
duty
to act in good faith in what the director or officer believes to be
in the best interests of the company as a whole;
(ii)
duty to
exercise powers for the purposes for which those powers were
conferred and not for a collateral purpose;
(iii)
directors should
not properly fetter the exercise of future discretion;
(iv)
duty to exercise
powers fairly as between different sections of shareholders;
(v)
duty not to
put themselves in a position in which there is a conflict between
their duty to the company and their personal interests; and
(vi)
duty to exercise
independent judgment.
In addition to the above, directors also owe a duty of care which
is not fiduciary in nature. This duty has been defined as a
requirement to act as a reasonably diligent person having both the
general knowledge, skill and experience that may reasonably be
expected of a person carrying out the same functions as are carried
out by that director in relation to the company and the general
knowledge skill and experience which that director has.
65
As set out above, directors have a duty not to put themselves in a
position of conflict and this includes a duty not to engage in
self-dealing, or to otherwise benefit as a result of their
position. However, in some instances what would otherwise be a
breach of this duty can be forgiven and/or authorized in advance by
the shareholders provided that there is full disclosure by the
directors. This can be done by way of permission granted in the
memorandum and articles of association or alternatively by
shareholder approval at general meetings.
Accordingly, as a result of multiple business affiliations, our
officers and directors may have similar legal obligations relating
to presenting business opportunities meeting the above-listed
criteria to multiple entities. In addition, conflicts of interest
may arise when our board evaluates a particular business
opportunity with respect to the above-listed criteria. We cannot
assure you that any of the above mentioned conflicts will be
resolved in our favor. Furthermore, each of our officers and
directors has pre-existing fiduciary obligations to other
businesses of which they are officers or directors. To the extent
they identify business opportunities which may be suitable for the
entities to which they owe pre-existing fiduciary obligations, our
officers and directors will honor those fiduciary obligations.
Accordingly, it is possible they may not present opportunities to
us that otherwise may be attractive to us unless the entities to
which they owe pre-existing fiduciary obligations and any
successors to such entities have declined to accept such
opportunities.
In order to minimize potential conflicts of interest which may
arise from multiple corporate affiliations, each of our officers
and directors has contractually agreed, pursuant to a written
agreement with us, until the earliest of a business combination,
our liquidation or such time as he ceases to be an officer or
director, to present to our company for our consideration, prior to
presentation to any other entity, any suitable business opportunity
which may reasonably be required to be presented to us, subject to
any pre-existing fiduciary or contractual obligations he might
have.
The following table summarizes the other relevant pre-existing
fiduciary or contractual obligations of our officers and
directors:
Name
of Affiliated Company
|
|
|
|
Priority/Preference relative to Andina Acquisition Corp.
II
|
|
Multiple Equilibria Capital
|
|
Julio A. Torres
|
|
Mr. Torres may present all business
opportunities which are suitable for Multiple Equilibria Capital to
Multiple Equilibria Capital prior to presenting them to
us.
|
|
Australy International LLC
|
|
Matthew S.N. Kibble
|
|
Mr. Kibble may present all business
opportunities which are suitable for Australy International LLC to
Australy International LLC prior to presenting them to
us.
|
In connection with the vote required for any business combination,
all of our existing shareholders, including all of our officers and
directors, have agreed to vote their respective insider shares and
private shares in favor of any proposed business combination. In
addition, they have agreed to waive their respective rights to
participate in any liquidation distribution with respect to those
ordinary shares acquired by them prior to this offering. If they
purchase ordinary shares in this offering or in the open market,
however, they would be entitled to participate in any liquidation
distribution in respect of such shares but have agreed not to
convert such shares (or sell their shares in any tender offer) in
connection with the consummation of our initial business
combination or an amendment to our amended and restated memorandum
and articles of association relating to pre-business combination
activity.
All ongoing and future transactions between us and any of our
officers and directors or their respective affiliates will be on
terms believed by us to be no less favorable to us than are
available from unaffiliated third parties. Such transactions will
require prior approval by our audit committee and a majority of our
uninterested “independent” directors, or the members of
our board who do not have an interest in the transaction, in either
case who had access, at our expense, to our attorneys or
independent legal counsel. We will not enter into any such
transaction unless our audit committee and a majority of our
disinterested “independent” directors determine that
the terms of such transaction are no less favorable to us than
those that would be available to us with respect to such a
transaction from unaffiliated third parties.
To further minimize conflicts of interest, we have agreed not to
consummate our initial business combination with an entity that is
affiliated with any of our officers, directors or initial
shareholders, unless we have obtained (i) an opinion from an
independent investment banking firm that the business combination
is fair to our unaffiliated shareholders from a financial point of
view and (ii) the approval of a majority of our disinterested and
independent directors (if we have any at that time). Furthermore,
in no event will any of our initial shareholders, officers,
directors, special advisors or their respective affiliates be paid
any finder’s fee, consulting fee or other similar
compensation prior to, or for any services they render in order to
effectuate, the consummation of our initial business
combination.
66
PRINCIPAL
SHAREHOLDERS
The following table sets forth information regarding the beneficial
ownership of our ordinary shares as of the date of this prospectus
and as adjusted to reflect the sale of our ordinary shares included
in the units offered by this prospectus (assuming none of the
individuals listed purchase units in this offering), by:
•
each person known by us to be the beneficial owner of more than 5%
of our outstanding ordinary shares;
•
each of our officers and directors; and
•
all of our officers and directors as a group.
Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all
ordinary shares beneficially owned by them. The following table does not reflect record of beneficial ownership of any ordinary
shares issuable upon conversion of rights or exercise of the warrants as these rights and warrants are not convertible or exercisable
within 60 days of the date of this prospectus.
|
|
|
|
|
|
Name
and Address of Beneficial Owner
(1)
|
|
Amount
and
Nature of
Beneficial
Ownership
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares
|
|
Amount
and
Nature of
Beneficial
Ownership
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares
|
|
Julio
A. Torres
|
|
40,470
|
|
|
3.5
|
%
|
|
46,798
|
|
|
*
|
|
Mauricio
Orellana
|
|
79,379
|
|
|
6.9
|
%
|
|
84,959
|
|
1.6
|
%
|
|
Eric
Carrera
|
|
10,000
|
(3)
|
|
*
|
|
|
10,000
|
|
|
*
|
|
Marjorie
Hernandez
|
|
54,623
|
|
|
4.7
|
%
|
|
74,151
|
|
1.4
|
%
|
|
B.
Luke Weil
|
|
442,895
|
(4)
|
|
38.5
|
%
|
|
450,740
|
|
8.5
|
%
|
|
Matthew
S. N. Kibble
|
|
21,000
|
|
|
1.8
|
%
|
|
28,500
|
|
|
*
|
|
Edward
G. Navarro
|
|
7,000
|
|
|
|
*
|
|
7,000
|
|
|
*
|
|
A.
Lorne Weil
(5)
|
|
312,740
|
|
|
27.2
|
%
|
|
375,923
|
|
7.1
|
%
|
|
All
directors and executive officers as a group
(seven individuals)
|
|
655,367
|
|
|
56.9
|
%
|
|
702,148
|
|
13.2
|
%
|
Immediately
after this offering, our initial shareholders will beneficially own approximately 23.8% of the then issued and outstanding ordinary
shares (assuming none of them purchase any units offered by this prospectus). None of our initial shareholders, officers and directors
has indicated to us that he intends to purchase securities in this offering. Because of the ownership block held by our initial
shareholders, such individuals may be able to effectively exercise control over all matters requiring approval by our shareholders,
including the election of directors and approval of significant corporate transactions other than approval of our initial business
combination.
If the underwriters do not exercise all or a portion of the
over-allotment option, our initial shareholders will have up to an
aggregate of 150,000 ordinary shares compulsorily repurchased by us
as required by Cayman Islands law, for an aggregate purchase price
of $0.01. Our initial shareholders will be required to have
repurchased by us only a number of shares necessary to maintain
their collective 20% ownership interest in our ordinary shares
(excluding the private units) after giving effect to the offering
and the exercise, if any, of the underwriters’ over-allotment
option.
All of the insider shares outstanding prior to the date of this
prospectus will be placed in escrow with Continental Stock Transfer
& Trust Company, as escrow agent, until (1) with respect to 50%
of the insider shares, the earlier of one year after the date of
the consummation of our initial business combination and the date
on which the closing price of our ordinary shares
67
equals or exceeds $12.50 per share (as adjusted for share splits,
share dividends, reorganizations and recapitalizations) for any 20
trading days within any 30-trading day period commencing after our
initial business combination and (2) with respect to the remaining
50% of the insider shares, one year after the date of the
consummation of our initial business combination, or earlier, in
either case, if, subsequent to our initial business combination, we
consummate a liquidation, merger, share exchange or other similar
transaction which results in all of our shareholders having the
right to exchange their shares for cash, securities or other
property. Up to 150,000 of the insider shares may also be released
from escrow earlier than this date for compulsory repurchase by us
and cancellation if the over-allotment option is not exercised in
full as described above.
During the escrow period, the holders of these shares will not be
able to sell or transfer their securities except (i) for transfers
to our officers, directors or their respective affiliates
(including for transfers to an entity’s members upon its
liquidation), (ii) to relatives and trusts for estate planning
purposes, (iii) by virtue of the laws of descent and distribution
upon death, (iv) pursuant to a qualified domestic relations order,
(v) by certain pledges to secure obligations incurred in connection
with purchases of our securities, (vi) by private sales made at or
prior to the consummation of a business combination at prices no
greater than the price at which the shares were originally
purchased or (vii) to us for no value for cancellation in
connection with the consummation of our initial business
combination, in each case (except for clause (vii)) where the
transferee agrees to the terms of the escrow agreement, but will
retain all other rights as our shareholders, including, without
limitation, the right to vote their ordinary shares and the right
to receive cash dividends, if declared. If dividends are declared
and payable in ordinary shares, such dividends will also be placed
in escrow. If we are unable to effect a business combination and
liquidate the trust account, none of our initial shareholders will
receive any portion of the liquidation proceeds with respect to
their insider shares.
Our
initial shareholders and EarlyBirdCapital have committed to purchase an aggregate of 310,000 private units (265,000 units by our
initial shareholders and 45,000 units by EarlyBirdCapital) at $10.00 per unit (for a total purchase price of $3,100,000). These
purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our initial shareholders
and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters, they and/or their respective
designees will purchase from us at a price of $10.00 per unit an additional number of private units (up to a maximum of 28,500
private units) pro rata with the amount of the over-allotment option exercised. These additional private units will be purchased
in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment
option. All of the proceeds we receive from these purchases will be placed in the trust account described below. The foregoing
purchases will only be made if they are able to do so in accordance with Regulation M and Sections 9(a)(2) and 10(b) and Rule
10b-5 of the Exchange Act. The private units are identical to the units sold in this offering except the private warrants will
be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers
or their permitted transferees. Additionally, because the private warrants will be issued in a private transaction, the holders
and their transferees will be allowed to exercise such warrants for cash even if a registration statement covering the ordinary
shares issuable upon exercise of such warrants is not effective and receive unregistered ordinary shares. Furthermore, the purchasers
have agreed (A) to vote the private shares in favor of any proposed business combination, (B) not to propose, or vote in favor
of, an amendment to our amended and restated memorandum and articles of association with respect to our pre-business combination
activities prior to the consummation of such a business combination unless we provide dissenting public shareholders with the
opportunity to convert their public shares in connection with any such vote, (C) not to convert any private shares into the right
to receive cash from the trust account in connection with a shareholder vote to approve our proposed initial business combination
(or to sell such shares to us in any tender offer we may engage in) or a vote to amend the provisions of our amended and restated
memorandum and articles of association relating to shareholders’ rights or pre-business combination activity and (D) that
the private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated.
The purchasers of the private units have agreed not to transfer, assign or sell any of the private units or underlying securities
(except to the same permitted transferees as the insider shares) until the completion of our initial business combination.
In
order to meet our working capital needs following the consummation of this offering, our initial shareholders, officers and directors
or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem
reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation
of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be
converted upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for
example, would result in the holders being issued 57,142 ordinary shares if $500,000 of notes were so converted as the rights
included in the units would result in an additional 7,142 shares being issued, as well as 50,000 warrants to purchase 25,000 ordinary
shares). Our shareholders have approved the issuance of the units and underlying securities upon conversion of such notes, to
the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we do
not complete a business combination, the loans will not be repaid.
B. Luke Weil is our “promoter,” as that term is defined
under the Federal securities laws.
68
CERTAIN
TRANSACTIONS
In July 2015, we issued an aggregate of 1,150,000 ordinary shares
to B. Luke Weil for $25,000 in cash, at a purchase price of $0.02
share.
Our
initial shareholders therefore subsequently transferred certain insider shares amongst themselves at the same price originally
paid for such shares.
If the underwriters do not exercise all or a portion of their
over-allotment option, our initial shareholders have agreed to have
compulsorily repurchased by us, for an aggregate purchase price of
$0.01, up to an aggregate of 150,000 ordinary shares in proportion
to the portion of the over-allotment option that was not exercised.
If such shares are repurchased, they would be immediately
cancelled.
If the underwriters determine the size of the offering should be
increased (including pursuant to Rule 462(b) under the Securities
Act) or decreased, a share dividend or a contribution back to
capital, as applicable, would be effectuated in order to maintain
our initial shareholder’s ownership at a percentage of the
number of shares to be sold in this offering (not including the
private shares).
Our
initial shareholders and EarlyBirdCapital have committed to purchase an aggregate of 310,000 private units (265,000 units by our
initial shareholders and 45,000 units by EarlyBirdCapital) at $10.00 per unit (for a total purchase price of $3,100,000). These
purchases will take place on a private placement basis simultaneously with the consummation of this offering. Our initial shareholders
and EarlyBirdCapital have also agreed that if the over-allotment option is exercised by the underwriters, they and/or their respective
designees will purchase from us at a price of $10.00 per unit an additional number of private units (up to a maximum of 28,500
private units) pro rata with the amount of the over-allotment option exercised. These additional private units will be purchased
in a private placement that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment
option. The foregoing purchases will only be made if they are able to do so in accordance with Regulation M and Sections 9(a)(2)
and 10(b) and Rule 10b-5 of the Exchange Act. The purchase price for the private units will be delivered to Graubard Miller, our
counsel in connection with this offering, who will also be acting solely as escrow agent in connection with the private sale of
such units, at least 24 hours prior to the date of this prospectus to hold in a non-interest bearing account until we consummate
this offering. Graubard Miller will deposit the purchase price into the trust account simultaneously with the consummation of
the offering. The private units are identical to the units sold in this offering except the private warrants will be non-redeemable
and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their
permitted transferees. Additionally, because the private warrants will be issued in a private transaction, the holders and their
transferees will be allowed to exercise such warrants for cash even if a registration statement covering the ordinary shares issuable
upon exercise of such warrants is not effective and receive unregistered ordinary shares. Furthermore, the purchasers have agreed
(A) to vote the private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment
to our amended and restated memorandum and articles of association with respect to our pre-business combination activities prior
to the consummation of such a business combination unless we provide dissenting public shareholders with the opportunity to convert
their public shares in connection with any such vote, (C) not to convert any private shares into the right to receive cash from
the trust account in connection with a shareholder vote to approve our proposed initial business combination (or to sell such
shares to us in any tender offer we may engage in) or a vote to amend the provisions of our amended and restated memorandum and
articles of association relating to shareholders’ rights or pre-business combination activity and (D) that the private shares
shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. The purchasers
have agreed not to transfer, assign or sell any of the private units (except to the same permitted transferees as the insider
shares) until the completion of our initial business combination.
In
order to meet our working capital needs following the consummation of this offering, our initial shareholders, officers and directors
and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount
they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid
upon consummation of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000
of the notes may be converted upon consummation of our business combination into additional private units at a price of $10.00
per unit (which, for example, would result in the holders being issued 57,142 ordinary shares if $500,000 of notes were so converted
as the rights included in the units would result in an additional 7,142 shares being issued, as well as 50,000 warrants to purchase
25,000 shares). Our shareholders have approved the issuance of the units and underlying securities upon conversion of such notes,
to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If we
do not complete a business combination, the loans would not be repaid.
69
The holders of our insider shares issued and outstanding on the
date of this prospectus, as well as the holders of the private
units (and all underlying securities) and any securities our
initial shareholders, officers, directors or their affiliates may
be issued in payment of working capital loans made to us, will be
entitled to registration rights pursuant to an agreement to be
signed prior to or on the effective date of this offering. The
holders of a majority of these securities are entitled to make up
to two demands that we register such securities. The holders of the
majority of the insider shares can elect to exercise these
registration rights at any time commencing three months prior to
the date on which these ordinary shares are to be released from
escrow. The holders of a majority of the private units or
securities issued in payment of working capital loans made to us
can elect to exercise these registration rights at any time after
we consummate a business combination. In addition, the holders have
certain “piggy-back” registration rights with respect
to registration statements filed subsequent to our consummation of
a business combination. We will bear the expenses incurred in
connection with the filing of any such registration statements.
As of August 21, 2015, B. Luke Weil advanced to us an aggregate of
$30,000 to cover expenses related to this offering. The advances
are payable without interest on the date on which we consummate our
initial public offering. We intend to repay these advances from the
proceeds of this offering not being placed in the trust
account.
We will reimburse our officers and directors for any reasonable
out-of-pocket business expenses incurred by them in connection with
certain activities on our behalf such as identifying and
investigating possible target businesses and business combinations.
There is no limit on the amount of out-of-pocket expenses
reimbursable by us; provided, however, that to the extent such
expenses exceed the available proceeds not deposited in the trust
account and the interest income earned on the amounts held in the
trust account, such expenses would not be reimbursed by us unless
we consummate an initial business combination. Our audit committee
will review and approve all reimbursements and payments made to any
initial shareholder or member of our management team, or our or
their respective affiliates, and any reimbursements and payments
made to members of our audit committee will be reviewed and
approved by our Board of Directors, with any interested director
abstaining from such review and approval.
Other than the payment of consulting fees to our officers,
directors, shareholders or their affiliates for assisting us in
consummating our initial business combination in an amount not to
exceed an aggregate of $_____ and reimbursable out-of-pocket
expenses payable to our officers and directors, no compensation or
fees of any kind, including finder’s fees, consulting fees or
other similar compensation, will be paid to any of our initial
shareholders, officers or directors who owned our ordinary shares
prior to this offering, or to any of their respective affiliates,
prior to or with respect to the business combination (regardless of
the type of transaction that it is).
All ongoing and future transactions between us and any of our
officers and directors or their respective affiliates will be on
terms believed by us to be no less favorable to us than are
available from unaffiliated third parties. Such transactions,
including the payment of any compensation, will require prior
approval by a majority of our uninterested
“independent” directors (to the extent we have any) or
the members of our board who do not have an interest in the
transaction, in either case who had access, at our expense, to our
attorneys or independent legal counsel. We will not enter into any
such transaction unless our disinterested “independent”
directors (or, if there are no “independent” directors,
our disinterested directors) determine that the terms of such
transaction are no less favorable to us than those that would be
available to us with respect to such a transaction from
unaffiliated third parties.
Related Party
Policy
Our Code of Ethics, which we will adopt upon consummation of this
offering, will require us to avoid, wherever possible, all related
party transactions that could result in actual or potential
conflicts of interests, except under guidelines approved by the
board of directors (or the audit committee). Related-party
transactions are defined as transactions in which (1) the aggregate
amount involved will or may be expected to exceed $120,000 in any
calendar year, (2) we or any of our subsidiaries is a participant,
and (3) any (a) executive officer, director or nominee for election
as a director, (b) greater than 5% beneficial owner of our ordinary
shares, or (c) immediate family member, of the persons referred to
in clauses (a) and (b), has or will have a direct or indirect
material interest (other than solely as a result of being a
director or a less than 10% beneficial owner of another entity). A
conflict of interest situation can arise when a person takes
actions or has interests that may make it difficult to perform his
or her work objectively and effectively. Conflicts of interest may
also arise if a person, or a member of his or her family, receives
improper personal benefits as a result of his or her position.
We also require each of our directors and executive officers to
annually complete a directors’ and officers’
questionnaire that elicits information about related party
transactions.
70
Our audit committee, pursuant to its written charter, will be
responsible for reviewing and approving related-party transactions
to the extent we enter into such transactions. All ongoing and
future transactions between us and any of our officers and
directors or their respective affiliates will be on terms believed
by us to be no less favorable to us than are available from
unaffiliated third parties. Such transactions will require prior
approval by our audit committee and a majority of our uninterested
“independent” directors, or the members of our board
who do not have an interest in the transaction, in either case who
had access, at our expense, to our attorneys or independent legal
counsel. We will not enter into any such transaction unless our
audit committee and a majority of our disinterested
“independent” directors determine that the terms of
such transaction are no less favorable to us than those that would
be available to us with respect to such a transaction from
unaffiliated third parties. Additionally, we require each of our
directors and executive officers to complete a directors’ and
officers’ questionnaire that elicits information about
related party transactions.
These procedures are intended to determine whether any such related
party transaction impairs the independence of a director or
presents a conflict of interest on the part of a director, employee
or officer.
To further minimize potential conflicts of interest, we have agreed
not to consummate a business combination with an entity which is
affiliated with any of our initial shareholders unless we obtain an
opinion from an independent investment banking firm that the
business combination is fair to our unaffiliated shareholders from
a financial point of view. Furthermore, in no event will any of our
existing officers, directors or initial shareholders, or any entity
with which they are affiliated, be paid any finder’s fee,
consulting fee or other compensation prior to, or for any services
they render in order to effectuate, the consummation of a business
combination.
71
DESCRIPTION OF
SECURITIES
General
We are currently authorized to issue 100,000,000 ordinary shares,
par value $0.0001, and 1,000,000 preferred shares, par value
$0.0001. As of the date of this prospectus, 1,150,000 ordinary
shares are outstanding, held by our initial shareholders. No
preferred shares are outstanding.
Units
Each
unit consists of one ordinary share, one right and one redeemable warrant. Each right entities the holder thereof to receive
one-seventh (1/7) of a share on the consummation of an initial business combination. Each redeemable warrant entitles the holder
to purchase one half of one ordinary share. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only
for a whole number of shares. This means that only an even number of warrants may be exercised at any given time by a warrantholder.
For example, if a warrantholder holds one warrant to purchase one-half of one share, such warrant shall not be exercisable. If
a warrantholder holds two warrants, such warrants will be exercisable for one share. The ordinary shares, rights and warrants
will begin to trade separately on the 90
th
day after the date of this prospectus
unless EarlyBirdCapital determines that an earlier date is acceptable (based upon, among other things, its assessment of the relative
strengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for,
our securities in particular). In no event will EarlyBirdCapital allow separate trading of the ordinary shares, rights and warrants
until we file an audited balance sheet reflecting our receipt of the gross proceeds of this offering.
We
will file a Current Report on Form 8-K which includes an audited balance sheet promptly upon the consummation of this offering.
The audited balance sheet will reflect proceeds we receive from the exercise of the over-allotment option, if the over-allotment
option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus,
we will file an amendment to the Form 8-K, or a new Form 8-K, to provide updated financial information to reflect the exercise
of the over-allotment option. We will also include in this Form 8-K, an amendment thereto, or in a subsequent Form 8-K information
indicating when separate trading of the ordinary shares, rights and warrants has commenced.
Ordinary
Shares
Our shareholders of record are entitled to one vote for each share
held on all matters to be voted on by shareholders. In connection
with any vote held to approve our initial business combination, all
of our initial shareholders, as well as all of our officers and
directors, have agreed to vote their respective ordinary shares
owned by them immediately prior to this offering and any shares
purchased in this offering or following this offering in the open
market in favor of the proposed business combination.
We will proceed with the business combination only if we have net
tangible assets of at least $5,000,001 upon consummation of such
business combination and a majority of the ordinary shares voted
are voted in favor of the business combination. At least five
days’ notice must be given for each general meeting (although
we will provide whatever minimum number of days are required under
Federal securities laws). Shareholders may vote at meetings in
person or by proxy.
Our board of directors is divided into three classes, each of which
will generally serve for a term of three years with only one class
of directors being elected in each year. There is no cumulative
voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares eligible to vote
for the election of directors can elect all of the directors.
Pursuant
to our amended and restated memorandum and articles of association, if we do not consummate a business combination by 18 months
from the consummation of this offering (or 21 months if the extension criteria is satisfied), it will trigger our automatic winding
up, dissolution and liquidation. Our initial shareholders have agreed to waive their rights to share in any distribution from
the trust account with respect to their insider shares upon our winding up, dissolution and liquidation.
Our
shareholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions
applicable to the ordinary shares, except that public shareholders have the right to have their public shares converted to cash
equal to their pro rata share of the trust account if they vote on the proposed business combination and the business combination
is completed. Public shareholders who convert their public shares into their portion of the trust account still have the right
to exercise the redeemable warrants that they received as part of the units.
72
Register of
Members
Under Cayman Islands law, we must keep a register of members and
there shall be entered therein:
(a)
the names
and addresses of the members, a statement of the shares held by
each member, and of the amount paid or agreed to be considered as
paid, on the shares of each member;
(b)
the date on
which the name of any person was entered on the register as a
member; and
(c)
the date on
which any person ceased to be a member.
Under Cayman Islands law, the register of members of our company is
prima facie evidence of the matters set out therein (i.e. the
register of members will raise a presumption of fact on the matters
referred to above unless rebutted) and a member registered in the
register of members shall be deemed as a matter of Cayman Islands
law to have legal title to the shares as set against its name in
the register of members. Upon the closing of this public offering,
the register of members shall be immediately updated to reflect the
issue of shares by us. Once our register of members has been
updated, the shareholders recorded in the register of members shall
be deemed to have legal title to the shares set against their
name.
However, there are certain limited circumstances where an
application may be made to a Cayman Islands court for a
determination on whether the register of members reflects the
correct legal position. Further, the Cayman Islands court has the
power to order that the register of members maintained by a company
should be rectified where it considers that the register of members
does not reflect the correct legal position. If an application for
an order for rectification of the register of members were made in
respect of our ordinary shares, then the validity of such shares
may be subject to re-examination by a Cayman Islands court.
Preferred
Shares
Our amended and restated memorandum and articles of association
authorizes the issuance of 1,000,000 preferred shares with such
designation, rights and preferences as may be determined from time
to time by our board of directors. No preferred shares are being
issued or registered in this offering. Accordingly, our board of
directors is empowered, without shareholder approval, to issue
preferred shares with dividend, liquidation, redemption, voting or
other rights which could adversely affect the voting power or other
rights of the holders of ordinary shares. However, the underwriting
agreement prohibits us, prior to a business combination, from
issuing preferred shares which participate in any manner in the
proceeds of the trust account, or which votes as a class with the
ordinary shares on a business combination. We may issue some or all
of the preferred shares to effect a business combination. In
addition, the preferred shares could be utilized as a method of
discouraging, delaying or preventing a change in control of us.
Although we do not currently intend to issue any preferred shares,
we cannot assure you that we will not do so in the future.
Rights
Each holder of a right will receive one-seventh (1/7) of a share
upon consummation of our initial business combination, even if the
holder of such right converted all ordinary shares held by him, her
or it in connection with the initial business combination or an
amendment to our amended and restated memorandum and articles of
association with respect to our pre-business combination
activities. No additional consideration will be required to be paid
by a holder of rights in order to receive his, her or its
additional shares upon consummation of an initial business
combination as the consideration related thereto has been included
in the unit purchase price paid for by investors in this offering.
The shares issuable upon exchange of the rights will be freely
tradable (except to the extent held by affiliates of ours) since
the issuance of the shares underlying the rights will either be
registered under an effective registration statement on Form S-4
(in the case where we are not the surviving entity) or be exempt
from registration pursuant to an applicable exemption such as the
exemption provided by Section 3(a)(9) (in the case where we are the
surviving entity).
The number of ordinary shares that the holders of rights are
entitled to receive upon consummation of a business combination
shall be equitably adjusted to reflect appropriately the effect of
any share split, reverse share split, share dividend,
reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to the
ordinary shares occurring on or after the date hereof and prior to
the consummation of a business combination.
73
The rights will be issued in registered form under a rights
agreement between Continental Stock Transfer & Trust Company,
as rights agent, and us. The rights agreement provides that the
terms of the rights may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision,
but requires the approval, by written consent or vote, of the
holders of a majority of the then outstanding rights in order to
make any change that adversely affects the interests of the
registered holders.
If we enter into a definitive agreement for a business combination
in which we will not be the surviving entity, the definitive
agreement will provide for the holders of rights to receive the
same per share consideration the holders of the ordinary shares
will receive in the transaction on an as-converted into ordinary
share basis. In the event we will not be the surviving company upon
completion of our initial business combination, each holder of a
right will be required to affirmatively convert his, her or its
rights in order to receive the 1/7 of a share underlying each right
(without paying any additional consideration) upon consummation of
the business combination. More specifically, each holder will be
required to indicate his, her or its election to convert the rights
into their underlying shares as well as to return the original
rights certificates to us. There is no length of time within which
an investor must affirmatively elect to convert the rights.
However, until a holder affirmatively elects to convert its rights,
the right certificates held by such holder will not represent the
ordinary shares they are convertible for but instead will simply
represent the right to receive such ordinary shares.
If we are unable to complete an initial business combination within
the required time period and we liquidate the funds held in the
trust account, holders of rights will not receive any of such funds
with respect to their rights, nor will they receive any
distribution from our assets held outside of the trust account with
respect to such rights, and the rights will expire worthless.
Further, there are no contractual penalties for failure to deliver
securities to the holders of the rights upon consummation of an
initial business combination. Additionally, in no event will we be
required to net cash settle the rights. Because we will only issue
a whole number of shares, you will not receive any fractional
shares to the extent the number of rights held by you upon
consummation of our initial business combination is not divisible
by seven.
Redeemable
Warrants
No
warrants are currently outstanding. Each redeemable warrant entitles the registered holder to purchase one half of one ordinary
share at a price of $11.50 per full share, subject to adjustment as discussed below, at any time commencing on the later of the
completion of an initial business combination and 12 months from the date of this prospectus. Pursuant to the warrant agreement,
a warrantholder may exercise its warrants only for a whole number of shares. This means that only an even number of warrants may
be exercised at any given time by a warrantholder. However, except as set forth below, no warrants will be exercisable for cash
unless we have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants
and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering
the ordinary shares issuable upon exercise of the warrants is not effective within 90 days from the consummation of our initial
business combination, warrant holders may, until such time as there is an effective registration statement and during any period
when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the
exemption from registration provided by Section 3(a)(9) of the Securities Act provided that such exemption is available. If an
exemption from registration is not available, holders will not be able to exercise their warrants on a cashless basis. The warrants
will expire five years from the consummation of our initial business combination at 5:00 p.m., New York City time.
We
may call the warrants for redemption (excluding the private warrants but including any outstanding warrants issued upon exercise
of the unit purchase option issued to EarlyBirdCapital and its designees), in whole and not in part, at a price of $.01 per warrant:
•
at any time while the warrants are exercisable,
•
upon not less than 30 days’ prior written notice of redemption to each warrant holder,
•
if, and only if, the reported last sale price of the ordinary shares equals or exceeds $24.00 per share, for any 20 trading
days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders, and
•
if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such
warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter
until the date of redemption.
74
The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price
for such holder’s warrant upon surrender of such warrant.
The
redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable
premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant
exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share
price to drop below the exercise price of the warrants.
If
we call the warrants for redemption as described above, our management will have the option to require all holders that wish to
exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering
the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary
shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market
value” (defined below) by (y) the fair market value. The “fair market value” shall mean the volume weighted
average price of the ordinary shares for the 20 trading days ending on the third trading day prior to the date on which the notice
of redemption is sent to the holders of warrants. Whether we will exercise our option to require all holders to exercise their
warrants on a “cashless basis” will depend on a variety of factors including the price of our ordinary shares at the
time the warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as
warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent or vote, of the
holders of a majority of the then outstanding warrants in order to make any change that adversely affects the interests of the
registered holders.
The
exercise price and number of ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances including
in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However,
the warrants will not be adjusted for issuances of ordinary shares at a price below their respective exercise prices.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised.
The warrant holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise
their warrants and receive ordinary shares. After the issuance of ordinary shares upon exercise of the warrants, each holder will
be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
Except
as described above, no warrants will be exercisable and we will not be obligated to issue ordinary shares unless at the time a
holder seeks to exercise such warrant, a prospectus relating to the ordinary shares issuable upon exercise of the warrants is
current and the ordinary shares have been registered or qualified or deemed to be exempt under the securities laws of the state
of residence of the holder of the warrants. Under the terms of the warrant agreement, we have agreed to use our best efforts to
meet these conditions and to maintain a current prospectus relating to the ordinary shares issuable upon exercise of the warrants
until the expiration of the warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a
current prospectus relating to the ordinary shares issuable upon exercise of the warrants, holders will be unable to exercise
their warrants and we will not be required to settle any such warrant exercise. If the prospectus relating to the ordinary shares
issuable upon the exercise of the warrants is not current or if the ordinary shares is not qualified or exempt from qualification
in the jurisdictions in which the holders of the warrants reside, we will not be required to net cash settle or cash settle the
warrant exercise, the warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless.
Warrant
holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder (and his,
her or its affiliates) would not be able to exercise their warrants to the extent that, after giving effect to such exercise,
such holder (and his, her or its affiliates) would beneficially own in excess of 9.8% of the ordinary shares outstanding. Notwithstanding
the foregoing, any person who acquires a warrant with the purpose or effect of changing or influencing the control of our company,
or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition
will be deemed to be the beneficial owner of the underlying ordinary shares and not be able to take advantage of this provision.
75
No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled
to receive a fractional interest in a share (as a result of a subsequent share dividend payable in ordinary shares, or by a split
up of the ordinary shares or other similar event), we will, upon exercise, round up or down to the nearest whole number the number
of ordinary shares to be issued to the warrant holder.
Contractual
Arrangements with respect to the Certain Warrants
We
have agreed that so long as the private warrants are still held by the initial purchasers or their affiliates, we will not redeem
such warrants and we will allow the holders to exercise such warrants on a cashless basis (even if a registration statement covering
the ordinary shares issuable upon exercise of such warrants is not effective). However, once any of the foregoing warrants are
transferred from the initial purchasers or their affiliates, these arrangements will no longer apply. Additionally, the representative
of the underwriters has agreed that it will not be permitted to exercise any warrants underlying the purchase option to be issued
to it and/or its designees upon consummation of this offering after the five year anniversary of the effective date of the registration
statement of which this prospectus forms a part. Furthermore, because the private warrants will be issued in a private transaction,
the holders and their transferees will be allowed to exercise such warrants for cash even if a registration statement covering
the ordinary shares issuable upon exercise of such warrants is not effective and receive unregistered ordinary shares.
Purchase
Option
We have agreed to sell to EarlyBirdCapital an option for $100 to
purchase up to a total of 400,000 units at $10.00 per unit. The
units issuable upon exercise of this option are identical to those
offered by this prospectus. For a more complete description of the
purchase option, see the section below entitled “
Underwriting —
Purchase Option
.”
Dividends
We have not paid any cash dividends on our ordinary shares to date
and do not intend to pay cash dividends prior to the completion of
a business combination. The payment of cash dividends in the future
will be dependent upon our revenues and earnings, if any, capital
requirements and general financial condition subsequent to
completion of a business combination. The payment of any dividends
subsequent to a business combination will be within the discretion
of our then board of directors. It is the present intention of our
board of directors to retain all earnings, if any, for use in our
business operations and, accordingly, our board does not anticipate
declaring any dividends in the foreseeable future.
Our
Transfer Agent and Rights Agent and Warrant Agent
The
transfer agent for our ordinary shares and rights agent for our rights and warrant agent for our warrants is Continental Stock
Transfer & Trust Company, 17 Battery Place, New York, New York 10004.
Listing
of our Securities
There
is presently no public market for our units, ordinary shares, rights or warrants. We have applied to have the units, and the ordinary
shares and rights and warrants once they begin separate trading, listed on Nasdaq under the symbols “ANDAU,” “ANDA”
“ANDAR,” and “ANDAW,” respectively. Although, after giving effect to this offering, we meet on a pro forma
basis the minimum initial listing standards of Nasdaq, which generally only requires that we meet certain requirements relating
to shareholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements,
we cannot assure you that our securities will continue to be listed on Nasdaq as we might not meet certain continued listing standards.
Certain Differences in
Corporate Law
Cayman Islands companies are governed by the Companies Law. The
Companies Law is modeled on English Law but does not follow recent
English Law statutory enactments, and differs from laws applicable
to United States corporations and their shareholders. Set forth
below is a summary of the material differences between the
provisions of the Companies Law applicable to us and the laws
applicable to companies incorporated in the United States and their
shareholders.
Mergers and Similar
Arrangements.
In certain circumstances, the Companies
Law allows for mergers or consolidations between two Cayman Islands
companies, or between a Cayman Islands company and a company
incorporated in another jurisdiction (provided that is facilitated
by the laws of that other jurisdiction).
76
Where the merger or consolidation is between two Cayman Islands
companies, the directors of each company must approve a written
plan of merger or consolidation containing certain prescribed
information. That plan or merger or consolidation must then be
authorized by either (a) a special resolution (usually a majority
of 66.6% in value) of the shareholders of each company; or (b) such
other authorization, if any, as may be specified in such
constituent company’s articles of association. A shareholder
has the right to vote on a merger or consolidation regardless of
whether the shares that he holds otherwise give him voting rights.
No shareholder resolution is required for a merger between a parent
company (i.e., a company that owns at least 90% of the issued
shares of each class in a subsidiary company) and its subsidiary
company. The consent of each holder of a fixed or floating security
interest of a constituent company must be obtained, unless the
court waives such requirement. If the Cayman Islands Registrar of
Companies is satisfied that the requirements of the Companies Law
(which includes certain other formalities) have been complied with,
the Registrar of Companies will register the plan of merger or
consolidation.
Where the merger or consolidation involves a foreign company, the
procedure is similar, save that with respect to the foreign
company, the director of the Cayman Islands company is required to
make a declaration to the effect that, having made due enquiry, he
is of the opinion that the requirements set out below have been
met: (i) that the merger or consolidation is permitted or not
prohibited by the constitutional documents of the foreign company
and by the laws of the jurisdiction in which the foreign company is
incorporated, and that those laws and any requirements of those
constitutional documents have been or will be complied with; (ii)
that no petition or other similar proceeding has been filed and
remains outstanding or order made or resolution adopted to wind up
or liquidate the foreign company in any jurisdictions; (iii) that
no receiver, trustee, administrator or other similar person has
been appointed in any jurisdiction and is acting in respect of the
foreign company, its affairs or its property or any part thereof;
(iv) that no scheme, order, compromise or other similar arrangement
has been entered into or made in any jurisdiction whereby the
rights of creditors of the foreign company are and continue to be
suspended or restricted.
Where the surviving company is the Cayman Islands company, the
director of the Cayman Islands company is further required to make
a declaration to the effect that, having made due enquiry, he is of
the opinion that the requirements set out below have been met: (i)
that the foreign company is able to pay its debts as they fall due
and that the merger or consolidated is bona fide and not intended
to defraud unsecured creditors of the foreign company; (ii) that in
respect of the transfer of any security interest granted by the
foreign company to the surviving or consolidated company (a)
consent or approval to the transfer has been obtained, released or
waived; (b) the transfer is permitted by and has been approved in
accordance with the constitutional documents of the foreign
company; and (c) the laws of the jurisdiction of the foreign
company with respect to the transfer have been or will be complied
with; (iii) that the foreign company will, upon the merger or
consolidation becoming effective, cease to be incorporated,
registered or exist under the laws of the relevant foreign
jurisdiction; and (iv) that there is no other reason why it would
be against the public interest to permit the merger or
consolidation.
Where the above procedures are adopted, the Companies Law provides
for a right of dissenting shareholders to be paid a payment of the
fair value of his shares upon their dissenting to the merger or
consolidation if they follow a prescribed procedure. In essence,
that procedure is as follows (a) the shareholder must give his
written objection to the merger or consolidation to the constituent
company before the vote on the merger or consolidation, including a
statement that the shareholder proposes to demand payment for his
shares if the merger or consolidation is authorized by the vote;
(b) within 20 days following the date on which the merger or
consolidation is approved by the shareholders, the constituent
company must give written notice to each shareholder who made a
written objection; (c) a shareholder must within 20 days following
receipt of such notice from the constituent company, give the
constituent company a written notice of his intention to dissent
including, among other details, a demand for payment of the fair
value of his shares; (d) within seven days following the date of
the expiration of the period set out in paragraph (b) above or
seven days following the date on which the plan of merger or
consolidation is filed, whichever is later, the constituent
company, the surviving company or the consolidated company must
make a written offer to each dissenting shareholder to purchase his
shares at a price that the company determines is the fair value and
if the company and the shareholder agree the price within 30 days
following the date on which the offer was made, the company must
pay the shareholder such amount; (e) if the company and the
shareholder fail to agree a price within such 30 day period, within
20 days following the date on which such 30 day period expires, the
company (and any dissenting shareholder) must file a petition with
the Cayman Islands Grand Court to determine the fair value and such
petition must be accompanied by a list of the names and addresses
of the dissenting shareholders with whom agreements as to the fair
value of their shares have not been reached by the company. At the
hearing of that petition, the court has the power to determine the
fair value of the shares together with a fair rate of interest, if
any, to be paid by the company upon the amount determined to be the
fair value. Any dissenting shareholder whose name appears on the
list filed by the company may participate fully in all proceedings
until the determination of fair value is reached. These rights of a
dissenting shareholder are not be available in certain
circumstances, for example, to dissenters holding shares of any
class in respect of which an open market exists on a recognized
stock exchange or recognized interdealer quotation system at the
relevant date or where the consideration for such shares to be
contributed are shares of any company listed on a national
securities exchange or shares of the surviving or consolidated
company.
77
Moreover, Cayman Islands law also has separate statutory provisions
that facilitate the reconstruction or amalgamation of companies in
certain circumstances, schemes of arrangement will generally be
more suited for complex mergers or other transactions involving
widely held companies, commonly referred to in the Cayman Islands
as a “scheme of arrangement” which may be tantamount to
a merger. In the event that a merger was sought pursuant to a
scheme of arrangement (the procedure of which are more rigorous and
take longer to complete than the procedures typically required to
consummate a merger in the United States), the arrangement in
question must be approved by a majority in number of each class of
shareholders and creditors with whom the arrangement is to be made
and who must in addition represent three-fourths in value of each
such class of shareholders or creditors, as the case may be, that
are present and voting either in person or by proxy at a meeting,
or meeting summoned for that purpose. The convening of the meetings
and subsequently the terms of the arrangement must be sanctioned by
the Grand Court of the Cayman Islands. While a dissenting
shareholder would have the right to express to the court the view
that the transaction should not be approved, the court can be
expected to approve the arrangement if it satisfies itself
that:
•
we
are not proposing to act illegally or beyond the scope of our
corporate authority and the statutory provisions as to majority
vote have been complied with;
•
the shareholders have been fairly represented at the meeting in
question;
•
the arrangement is such as a businessman would reasonably approve;
and
•
the arrangement is not one that would more properly be sanctioned
under some other provision of the Companies Law or that would
amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below)
is approved, any dissenting shareholder would have no rights
comparable to appraisal rights, which would otherwise ordinarily be
available to dissenting shareholders of United States corporations,
providing rights to receive payment in cash for the judicially
determined value of the shares.
Squeeze-out
Provisions
. When a takeover offer is made and accepted
by holders of 90% of the shares to whom the offer is made within
four months, the offeror may, within a two-month period, require
the holders of the remaining shares to transfer such shares on the
terms of the offer. An objection can be made to the Grand Court of
the Cayman Islands but this is unlikely to succeed unless there is
evidence of fraud, bad faith, collusion or inequitable treatment of
the shareholders.
Further, transactions similar to a merger, reconstruction and/or an
amalgamation may in some circumstances be achieved through other
means to these statutory provisions, such as a share capital
exchange, asset acquisition or control, through contractual
arrangements, of an operating business.
Shareholders’
Suits
. Our Cayman Islands counsel is not aware of any
reported class action having been brought in a Cayman Islands
court. Derivative actions have been brought in the Cayman Islands
courts, and the Cayman Islands courts have confirmed the
availability for such actions. In most cases, we will be the proper
plaintiff in any claim based on a breach of duty owed to us, and a
claim against (for example) our officers or directors usually may
not be brought by a shareholder. However, based both on Cayman
Islands authorities and on English authorities, which would in all
likelihood be of persuasive authority and be applied by a court in
the Cayman Islands, exceptions to the foregoing principle apply in
circumstances in which:
•
a
company is acting, or proposing to act, illegally or beyond the
scope of its authority;
•
the act complained of, although not beyond the scope of the
authority, could be effected if duly authorized by more than the
number of votes which have actually been obtained; or
•
those who control the company are perpetrating a “fraud on
the minority.”
A shareholder may have a direct right of action against us where
the individual rights of that shareholder have been infringed or
are about to be infringed.
Enforcement of civil
liabilities
. The Cayman Islands has a different body of
securities laws as compared to the United States and may provide
less protection to investors. Additionally, Cayman Islands
companies may not have standing to sue before the Federal courts of
the United States.
We have been advised by our Cayman Islands legal counsel that the
courts of the Cayman Islands are unlikely (i) to recognize or
enforce against us judgments of courts of the United States
predicated upon the civil liability provisions of the federal
securities
78
laws of the United States or any state; and (ii) in original
actions brought in the Cayman Islands, to impose liabilities
against us predicated upon the civil liability provisions of the
federal securities laws of the United States or any state, so far
as the liabilities imposed by those provisions are penal in nature.
In those circumstances, although there is no statutory enforcement
in the Cayman Islands of judgments obtained in the United States,
the courts of the Cayman Islands will recognize and enforce a
foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a
judgment of a competent foreign court imposes upon the judgment
debtor an obligation to pay the sum for which judgment has been
given provided certain conditions are met. For a foreign judgment
to be enforced in the Cayman Islands, such judgment must be final
and conclusive and for a liquidated sum, and must not be in respect
of taxes or a fine or penalty, inconsistent with a Cayman Islands
judgment in respect of the same matter, impeachable on the grounds
of fraud or obtained in a manner, and or be of a kind the
enforcement of which is, contrary to natural justice or the public
policy of the Cayman Islands (awards of punitive or multiple
damages may well be held to be contrary to public policy). A Cayman
Islands Court may stay enforcement proceedings if concurrent
proceedings are being brought elsewhere.
Special
Considerations for Exempted Companies
. We are an
exempted company with limited liability under the Companies Law.
The Companies Law distinguishes between ordinary resident companies
and exempted companies. Any company that is registered in the
Cayman Islands but conducts business mainly outside of the Cayman
Islands may apply to be registered as an exempted company. The
requirements for an exempted company are essentially the same as
for an ordinary company except for the exemptions and privileges
listed below:
•
annual reporting requirements are minimal and consist mainly of a
statement that the company has conducted its operations mainly
outside of the Cayman Islands and has complied with the provisions
of the Companies Law;
•
an
exempted company’s register of members is not open to
inspection;
•
an
exempted company does not have to hold an annual general
meeting;
•
an
exempted company may issue negotiable or bearer shares or shares
with no par value;
•
an
exempted company may obtain an undertaking against the imposition
of any future taxation (such undertakings are usually given for 20
years in the first instance);
•
an
exempted company may register by way of continuation in another
jurisdiction and be deregistered in the Cayman Islands;
•
an
exempted company may register as a limited duration company;
and
•
an
exempted company may register as a segregated portfolio
company.
Amended and Restated
Memorandum and Articles of Association
Our amended and restated memorandum and articles of association
filed under the laws of the Cayman Islands contain provisions
designed to provide certain rights and protections to our
shareholders prior to the consummation of a business combination.
The following are the material rights and protections contained in
our amended and restated memorandum and articles of
association:
•
the right of public shareholders to exercise conversion rights and
have their public shares repurchased in lieu of participating in a
proposed business combination (up to a maximum of 20% of the public
shares sold in this offering);
•
a
prohibition against completing a business combination unless we
have net tangible assets of at least $5,000,001 upon consummation
of such business combination;
•
a
requirement that if we seek shareholder approval of any business
combination, a majority of the outstanding ordinary shares voted
must be voted in favor of such business combination;
•
the separation of our board of directors into three classes and the
establishment of related procedures regarding the standing and
election of such directors;
79
•
a
requirement that directors may call general meetings on their own
accord and are required to call an extraordinary general meeting if
holders of not less than 10% in par value of the issued shares
request such a meeting;
•
a
prohibition, prior to a business combination, against our issuing
(i) any ordinary shares or any securities convertible into ordinary
shares or (ii) any other securities (including preferred shares)
which participate in or are otherwise entitled in any manner to any
of the proceeds in the trust account or which vote as a class with
the ordinary shares on a business combination;
•
a requirement that our management take all actions necessary to liquidate our trust account in the event we do not consummate
a business combination by 18 months from the consummation of this offering (or 21 months in certain circumstances described elsewhere
herein);
•
a
prohibition, prior to a business combination, against our issuing
(i) any ordinary shares or any securities convertible into ordinary
shares or (ii) any other securities (including preferred shares)
which participate in or are otherwise entitled in any manner to any
of the proceeds in the trust account or which vote as a class with
the ordinary shares on a business combination; and
•
the limitation on shareholders’ rights to receive a portion
of the trust account.
The Companies Law permits a company incorporated in the Cayman
Islands to amend its memorandum and articles of association with
the approval of the holders of at least two-thirds of such
company’s outstanding ordinary shares. A company’s
articles of association may specify that the approval of a higher
majority is required but, provided the approval of the required
majority is obtained, any Cayman Islands company may amend its
memorandum and articles of association regardless of whether its
memorandum and articles of association provides otherwise.
Accordingly, although we could amend any of the provisions relating
to our proposed offering, structure and business plan which are
contained in our amended and restated memorandum and articles of
association, we view all of these provisions as binding obligations
to our shareholders and neither we, nor our officers or directors,
will take any action to amend or waive any of these provisions
unless we provide dissenting public shareholders with the
opportunity to convert their public shares in connection with any
such vote. The foregoing is set forth in our amended and restated
memorandum and articles of association and cannot be amended.
Anti-Money Laundering
— Cayman Islands
In order to comply with legislation or regulations aimed at the
prevention of money laundering, we are required to adopt and
maintain anti-money laundering procedures, and may require
subscribers to provide evidence to verify their identity and source
of funds. Where permitted, and subject to certain conditions, we
may also delegate the maintenance of our anti-money laundering
procedures (including the acquisition of due diligence information)
to a suitable person.
We reserve the right to request such information as is necessary to
verify the identity of a subscriber. In some cases the directors
may be satisfied that no further information is required since an
exemption applies under the Money Laundering Regulations (2013
Revision) of the Cayman Islands, as amended and revised from time
to time (the “Regulations”). Depending on the
circumstances of each application, a detailed verification of
identity might not be required where:
(a)
the
subscriber makes the payment for their investment from an account
held in the subscriber’s name at a recognized financial
institution; or
(b)
the
subscriber is regulated by a recognized regulatory authority and is
based or incorporated in, or formed under the law of, a recognized
jurisdiction; or
(c)
the
application is made through an intermediary which is regulated by a
recognized regulatory authority and is based in or incorporated in,
or formed under the law of a recognized jurisdiction and an
assurance is provided in relation to the procedures undertaken on
the underlying investors.
80
For the purposes of these exceptions, recognition of a financial
institution, regulatory authority or jurisdiction will be
determined in accordance with the Regulations by reference to those
jurisdictions recognized by the Cayman Islands Monetary Authority
as having equivalent anti-money laundering regulations.
In the event of delay or failure on the part of the subscriber in
producing any information required for verification purposes, we
may refuse to accept the application, in which case any funds
received will be returned without interest to the account from
which they were originally debited.
We also reserve the right to refuse to make any payment to a
shareholder if our directors or officers suspect or are advised
that the payment to such shareholder might result in a breach of
applicable anti-money laundering or other laws or regulations by
any person in any relevant jurisdiction, or if such refusal is
considered necessary or appropriate to ensure our compliance with
any such laws or regulations in any applicable jurisdiction.
If any person resident in the Cayman Islands knows or suspects or
has reasonable grounds for knowing or suspecting that another
person is engaged in criminal conduct or is involved with terrorism
or terrorist property and the information for that knowledge or
suspicion came to their attention in the course of business in the
regulated sector, or other trade, profession, business or
employment, the person will be required to report such knowledge or
suspicion to (i) the Financial Reporting Authority of the Cayman
Islands, pursuant to the Proceeds of Crime Law, 2008 of the Cayman
Islands if the disclosure relates to criminal conduct or money
laundering, or (ii) a police officer of the rank of constable or
higher, or the Financial Reporting Authority, pursuant to the
Terrorism Law (2011 Revision) of the Cayman Islands, if the
disclosure relates to involvement with terrorism or terrorist
financing and property. Such a report shall not be treated as a
breach of confidence or of any restriction upon the disclosure of
information imposed by any enactment or otherwise.
81
SHARES ELIGIBLE FOR
FUTURE SALE
Immediately
after this offering, we will have 5,310,000 ordinary shares outstanding, or 6,088,500 shares if the over-allotment option is exercised
in full. Of these shares, the 4,000,000 shares sold in this offering, or 4,600,000 shares if the over-allotment option is exercised
in full, will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased
by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining shares are restricted securities
under Rule 144, in that they were issued in private transactions not involving a public offering. All of those shares will not
be transferable except in limited circumstances described elsewhere in this prospectus.
In addition, if we consummate an initial business combination, the
shares issuable upon exchange of the rights will be freely tradable
(except to the extent held by affiliates of ours) since the
issuance of the shares underlying the rights will either be
registered under an effective registration statement on Form S-4
(in the case where we are not the surviving entity) or be exempt
from registration pursuant to an applicable exemption such as the
exemption provided by Section 3(a)(9) (in the case where we are the
surviving entity).
Rule 144
A
person who has beneficially owned restricted ordinary shares, rights or warrants for at least six months would be entitled to
sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any
time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for
at least three months before the sale. Persons who have beneficially owned restricted ordinary shares for at least six months
but who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional
restrictions, by which such person would be entitled to sell within any three-month period a number of shares that does not exceed
the greater of either of the following:
•
1% of the number of ordinary shares then outstanding, which will equal 53,100 shares immediately after this offering (or
60,885 if the over-allotment option is exercised in full); and
•
the average weekly trading volume of the ordinary shares during the
four calendar weeks preceding the filing of a notice on Form 144
with respect to the sale.
Sales under Rule 144 are also limited by manner of sale provisions
and notice requirements and to the availability of current public
information about us.
Restrictions on the Use
of Rule 144 by Shell Companies or Former Shell Companies
Historically, the SEC staff had taken the position that Rule 144 is
not available for the resale of securities initially issued by
companies that are, or previously were, blank check companies, like
us. The SEC has codified and expanded this position in the
amendments discussed above by prohibiting the use of Rule 144 for
resale of securities issued by any shell companies (other than
business combination related shell companies) or any issuer that
has been at any time previously a shell company. The SEC has
provided an important exception to this prohibition, however, if
the following conditions are met:
•
the issuer of the securities that was formerly a shell company has
ceased to be a shell company;
•
the issuer of the securities is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act;
•
the issuer of the securities has filed all Exchange Act reports and
material required to be filed, as applicable, during the preceding
12 months (or such shorter period that the issuer was required to
file such reports and materials), other than Form 8-K reports;
and
•
at
least one year has elapsed from the time that the issuer filed
current Form 10 type information with the SEC reflecting its status
as an entity that is not a shell company.
As a result, it is likely that pursuant to Rule 144, our initial
shareholders will be able to sell their insider shares freely
without registration one year after we have completed our initial
business combination assuming they are not an affiliate of ours at
that time.
82
Registration Rights
The holders of our insider shares issued and outstanding on the
date of this prospectus, as well as the holders of the private
units (and underlying securities) and any securities issued to our
initial shareholders, officers, directors or their affiliates in
payment of working capital loans made to us, will be entitled to
registration rights pursuant to an agreement to be signed prior to
or on the effective date of this offering. The holders of a
majority of these securities are entitled to make up to two demands
that we register such securities. The holders of the majority of
the insider shares can elect to exercise these registration rights
at any time commencing three months prior to the date on which
these ordinary shares are to be released from escrow. The holders
of a majority of the private units (and underlying securities) and
securities issued in payment of working capital loans (or
underlying securities) can elect to exercise these registration
rights at any time after we consummate a business combination. In
addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed
subsequent to our consummation of a business combination. We will
bear the expenses incurred in connection with the filing of any
such registration statements.
83
TAXATION
The
following summary of the material Cayman Islands and United States Federal income tax consequences of an investment in our ordinary
shares, rights and warrants, is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus,
all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in
our ordinary shares, rights and warrants, such as the tax consequences under state, local and other tax laws.
Cayman Islands
Taxation
The Government of the Cayman Islands will not, under existing
legislation, impose any income, corporate or capital gains tax,
estate duty, inheritance tax, gift tax or withholding tax upon the
company or its shareholders. The Cayman Islands are not party to a
double taxation treaty with any country that is applicable to any
payment made to or by us.
We have applied for and on October 14, 2014 received an undertaking
from the Governor-in-Cabinet of the Cayman Islands that, in
accordance with section 6 of the Tax Concessions Law (2011
Revision) of the Cayman Islands, for a period of 20 years from the
date of the undertaking, no law which is enacted in the Cayman
Islands imposing any tax to be levied on profits, income, gains or
appreciations shall apply to us or our operations and, in addition,
that no tax to be levied on profits, income, gains or appreciations
or which is in the nature of estate duty or inheritance tax shall
be payable (i) on or in respect of shares, debentures or other
obligations or (ii) by way of the withholding in whole or in part
of a payment of dividend or other distribution of income or capital
by the company to its members or a payment of principal or interest
or other sums due under a debenture or other obligation of the
company.
United States Federal
Income Taxation
General
This
section is a general summary of the material United States Federal income tax provisions relating to the acquisition, ownership
and disposition of our units, ordinary shares, rights and warrants. This section does not address any aspect of United States
Federal gift or estate tax, or the state, local or non-United States tax consequences of an investment in our ordinary shares,
rights and warrants, nor does it provide any actual representations as to any tax consequences of the acquisition, ownership or
disposition of our ordinary shares, rights and warrants.
Because
the components of a unit are separable at the option of the holder, the holder of a unit generally will be treated, for U.S. federal
income tax purposes, as the owner of the underlying ordinary share and right and warrant components of the unit, as the case may
be. As a result, the discussion below of the U.S. federal income tax consequences with respect to actual holders of ordinary shares,
rights and warrants should also apply to holders of units (as the deemed owners of the underlying ordinary shares, rights and
warrants that comprise the units).
The discussion below of the U.S. federal income tax consequences to
“U.S. Holders” will apply to a beneficial owner of our
securities that is for U.S. federal income tax purposes:
•
an
individual citizen or resident of the United States;
•
a
corporation (or other entity treated as a corporation) that is
created or organized (or treated as created or organized) in or
under the laws of the United States, any state thereof or the
District of Columbia;
•
an
estate whose income is includible in gross income for U.S. federal
income tax purposes regardless of its source; or
•
a
trust if (i) a U.S. court can exercise primary supervision over the
trust’s administration and one or more U.S. persons are
authorized to control all substantial decisions of the trust, or
(ii) it has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a U.S. person.
If a beneficial owner of our securities is not described as a U.S.
Holder and is not an entity treated as a partnership or other
pass-through entity for U.S. federal income tax purposes, such
owner will be considered a “Non-U.S. Holder.” The
material U.S. federal income tax consequences applicable
specifically to Non-U.S. Holders are described below under the
heading “Non-U.S. Holders.”
84
This discussion is based on the Internal Revenue Code of 1986, as
amended (the “Code”), its legislative history, Treasury
regulations promulgated thereunder, published rulings and court
decisions, all as currently in effect. These authorities are
subject to change or differing interpretations, possibly on a
retroactive basis.
This
discussion assumes that the ordinary shares, rights and warrants will trade separately and does not address all aspects of U.S.
federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In
particular, this discussion considers only holders that own our securities as capital assets within the meaning of Section 1221
of the Code, and does not address the potential application of the alternative minimum tax. In addition, this discussion does
not address the U.S. federal income tax consequences to holders that are subject to special rules, including:
•
financial institutions or financial services entities;
•
broker-dealers;
•
taxpayers that are subject to the mark-to-market accounting rules
under Section 475 of the Code;
•
tax-exempt entities;
•
governments or agencies or instrumentalities thereof;
•
insurance companies;
•
regulated investment companies;
•
real estate investment trusts;
•
expatriates or former long-term residents of the United States;
•
persons that actually or constructively own 5 percent or more of
our voting shares;
•
persons that acquired our securities pursuant to an exercise of
employee share options, in connection with employee share incentive
plans or otherwise as compensation;
•
persons that hold our securities as part of a straddle,
constructive sale, hedging, conversion or other integrated
transaction; or
•
persons whose functional currency is not the U.S. dollar.
This discussion does not address any aspect of U.S. federal
non-income tax laws, such as gift or estate tax laws, state, local
or non-U.S. tax laws or, except as discussed herein, any tax
reporting obligations of a holder of our securities. Additionally,
this discussion does not consider the tax treatment of partnerships
or other pass-through entities or persons who hold our securities
through such entities. If a partnership (or other entity classified
as a partnership for U.S. federal income tax purposes) is the
beneficial owner of our securities, the U.S. federal income tax
treatment of a partner in the partnership generally will depend on
the status of the partner and the activities of the partnership.
This discussion also assumes that any distributions made (or deemed
made) by us on our ordinary shares and any consideration received
(or deemed received) by a holder in consideration for the sale or
other disposition of our securities will be in U.S. dollars.
We have not sought, and will not seek, a ruling from the IRS as to
any U.S. federal income tax consequence described herein. The IRS
may disagree with the descriptions herein, and its determination
may be upheld by a court. Moreover, there can be no assurance that
future legislation, regulations, administrative rulings or court
decisions will not adversely affect the accuracy of the statements
in this discussion.
THIS DISCUSSION IS ONLY A SUMMARY OF THE MATERIAL U.S. FEDERAL
INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF OUR SECURITIES. IT DOES NOT PROVIDE ANY ACTUAL
REPRESENTATIONS AS TO ANY TAX CONSEQUENCES OF
THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND WE
HAVE NOT OBTAINED ANY OPINION OF COUNSEL WITH RESPECT TO SUCH TAX
CONSEQUENCES. AS A RESULT, EACH PROSPECTIVE INVESTOR IN OUR
SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO
THE
85
PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION,
OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX
LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX
TREATIES.
Allocation of Purchase Price and Characterization of a
Unit
There
is no authority addressing the treatment, for U.S. federal income tax purposes, of securities with terms substantially the same
as the units, and, therefore, that treatment is not entirely clear. Each unit should be treated for U.S. federal income tax purposes
as an investment unit consisting of one ordinary share one right and one warrant. For U.S. federal income tax purposes, each holder
of a unit generally must allocate the purchase price of a unit between the ordinary share, right and warrant that comprise the
unit based on the relative fair market value of each at the time of issuance. The price allocated to each ordinary share, right
and warrant generally will be the holder’s tax basis in such share or right or warrant, as the case may be.
The
foregoing treatment of our ordinary shares and rights and a holder’s purchase price allocation are not binding on the IRS
or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance
can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly,
each holder is advised to consult its own tax advisor regarding the risks associated with an investment in a unit (including alternative
characterizations of a unit) and regarding an allocation of the purchase price between the ordinary share and right and warrant
that comprise a unit. The balance of this discussion assumes that the characterization of the units described above is respected
for U.S. federal income tax purposes.
U.S. Holders
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926
(Return of a U.S. Transferor of Property to a Foreign Corporation)
to report a transfer of property (including cash) to us.
Substantial penalties may be imposed on a U.S. Holder that fails to
comply with this reporting requirement. Each U.S. Holder is urged
to consult with its own tax advisor regarding this reporting
obligation.
A U.S. holder is required to file with such U.S. holder’s
income tax return new Form 8938 to report the ownership of shares
or securities issued by a foreign corporation exceeding certain
threshold amounts.
Taxation
of Distributions Paid on Ordinary Shares
Subject to the passive foreign investment company
(“PFIC”) rules discussed below, a U.S. Holder generally
will be required to include in gross income as dividends the amount
of any cash distribution paid on our ordinary shares. A cash
distribution on such shares generally will be treated as a dividend
for U.S. federal income tax purposes to the extent the distribution
is paid out of our current or accumulated earnings and profits (as
determined under U.S. federal income tax principles). Such
dividends paid by us will be taxable to a corporate U.S. holder at
regular rates and will not be eligible for the dividends-received
deduction generally allowed to domestic corporations in respect of
dividends received from other domestic corporations. Distributions
in excess of such earnings and profits generally will be applied
against and reduce the U.S. Holder’s basis in its ordinary
shares (but not below zero) and, to the extent in excess of such
basis, will be treated as gain from the sale or exchange of such
ordinary shares.
Possible
Constructive Distributions
The
terms of each warrant provide for an adjustment to the number of shares for which the warrant may be exercised or to the exercise
price of the warrant in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. However,
the U.S. Holders of the warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment
increases the warrant holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in
the number of ordinary shares that would be obtained upon exercise) as a result of a distribution of cash to the holders of our
ordinary shares which is taxable to the U.S. Holders of such ordinary shares as described under “
—
Taxation of Distributions Paid on Ordinary Shares
” above. Such constructive distribution would be subject to
tax as described under that section in the same manner as if the U.S. Holders of the warrants received a cash distribution from
us equal to the fair market value of such increased interest.
86
Taxation
on the Disposition of Ordinary Shares and Rights and Warrants
Upon
a sale or other taxable disposition of our ordinary shares or rights or warrants (which, in general, would include a redemption
of ordinary shares, as discussed below, and including as a result of a dissolution and liquidation in the event we do not consummate
an initial business combination within the required time), and subject to the PFIC rules discussed below, a U.S. Holder generally
will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s
adjusted tax basis in the ordinary shares or rights or warrants.
The
regular U.S. federal income tax rate on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal
income tax rate on ordinary income, except that under tax law currently in effect long-term capital gains recognized by non-corporate
U.S. Holders are generally subject to U.S. federal income tax at a maximum regular rates of 15% or 20% depending upon the U.S.
Holder’s level of taxable income. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s
holding period for the ordinary shares or rights or warrants exceeds one year. It is unclear whether the redemption rights with
respect to the ordinary shares described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period
requirements for this purpose. The deductibility of capital losses is subject to various limitations that are not described herein
because a discussion of such limitations depends on each U.S. Holder’s particular facts and circumstances. Among such limitations
is the deduction for losses upon a taxable disposition by a U.S. Holder of shares or rights or warrants (whether or not held as
part of a unit) if, within a period beginning 30 days before the date of such disposition and ending 30 days after such date,
such U.S. Holder has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law),
or has entered into a contract or option so to acquire, substantially identical shares or securities. U.S. Holders who recognize
losses with respect to a disposition of our ordinary shares or rights or warrants should consult their own tax advisors regarding
the tax treatment of such losses.
Conversion of Ordinary Shares
Subject
to the PFIC rules described below, if a U.S. Holder converts ordinary shares into the right to receive cash pursuant to the exercise
of a shareholder conversion right, for U.S. federal income tax purposes, such conversion will be subject to the following rules.
If the conversion qualifies as a sale of the ordinary shares under Section 302 of the Code, the tax treatment of such conversion
will be as described under “— Taxation on the Disposition of Ordinary Shares and Rights and Warrants” above.
If the conversion does not qualify as a sale of ordinary shares under Section 302 of the Code, a U.S. Holder will be treated as
receiving a distribution with the tax consequences described below. Whether conversion of our shares qualifies for sale treatment
will depend largely on the total number of our ordinary shares treated as held by such U.S. Holder. The conversion of ordinary
shares generally will be treated as a sale or exchange of the ordinary shares (rather than as a distribution) if the receipt of
cash upon the conversion (i) is “substantially disproportionate” with respect to a U.S. Holder, (ii) results in a
“complete termination” of such holder’s interest in us or (iii) is “not essentially equivalent to a dividend”
with respect to such holder. These tests are explained more fully below.
In
determining whether any of the foregoing tests are satisfied, a U.S. Holder must take into account not only our ordinary shares
actually owned by such holder, but also our ordinary shares that are constructively owned by such holder. A U.S. Holder may constructively
own, in addition to our ordinary shares owned directly, ordinary shares owned by related individuals and entities in which such
holder has an interest or that have an interest in such holder, as well as any ordinary shares such holder has a right to acquire
by exercise of an option, which would generally include ordinary shares which could be acquired by ownership of the rights or
pursuant to the exercise of warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding
voting shares actually and constructively owned by a U.S. Holder immediately following the conversion of our ordinary shares must,
among other requirements, be less than 80% of the percentage of our outstanding voting and ordinary shares actually and constructively
owned by such holder immediately before the conversion. There will be a complete termination of a U.S. Holder’s interest
if either (i) all of our ordinary shares actually and constructively owned by such U.S. Holder are converted or (ii) all of our
ordinary shares actually owned by such U.S. Holder are converted and such holder is eligible to waive, and effectively waives,
in accordance with specific rules, the attribution of shares owned by family members and such holder does not constructively own
any other shares. The conversion of the ordinary shares will not be essentially equivalent to a dividend if such conversion results
in a “meaningful reduction” of a U.S. Holder’s proportionate interest in us. Whether the conversion will result
in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances.
However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority
shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful
reduction.” U.S. Holders should consult with their own tax advisors as to the tax consequences of an exercise of the conversion
right.
87
If none of the foregoing tests are satisfied, then the redemption
may be treated as a distribution and the tax effects will be as
described under “
— Taxation of
Distributions Paid on Ordinary Shares
,” above. After
the application of those rules, any remaining tax basis a U.S.
Holder has in the redeemed ordinary shares will be added to the
adjusted tax basis in such holder’s remaining ordinary
shares. If there are no remaining ordinary shares, a U.S. Holder
should consult its own tax advisors as to the allocation of any
remaining basis.
U.S. Holders who actually or constructively own one percent or more
of our shares (by vote or value) may be subject to special
reporting requirements with respect to a conversion of ordinary
shares, and such holders should consult with their own tax advisors
with respect to their reporting requirements.
Exercise
or Lapse of a Right or Warrant
Subject
to the PFIC rules discussed below, a U.S. Holder generally will not recognize gain or loss upon the acquisition of an ordinary
share from the right or on the exercise of a warrant for cash. An ordinary share received upon consummation of an initial business
combination or acquired pursuant to the exercise of a warrant for cash generally will have a tax basis equal to the U.S. Holder’s
tax basis in the right or warrant, increased by the amount paid to exercise the warrant. The holding period of such ordinary share
generally would begin on the day after the date of receipt of shares from the right or exercise of the warrant and will not include
the period during which the U.S. Holder held the right or warrant. If a warrant is allowed to lapse unexercised, a U.S. Holder
generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The
tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be tax-free,
either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S.
federal income tax purposes. In either tax-free situation, a U.S. Holder’s basis in the ordinary shares received would equal
the holder’s basis in the warrant. If the cashless exercise were treated as not being a gain realization event, a U.S. Holder’s
holding period in the ordinary shares would be treated as commencing on the date following the date of exercise of the warrant.
If the cashless exercise were treated as a recapitalization, the holding period of the ordinary shares would include the holding
period of the warrant. It is also possible that a cashless exercise could be treated as a taxable exchange in which gain or loss
would be recognized. In such event, a U.S. Holder could be deemed to have surrendered warrants equal to the number of ordinary
shares having a value equal to the exercise price for the total number of warrants to be exercised. The U.S. Holder would recognize
capital gain or loss in an amount equal to the difference between the fair market value of the ordinary shares represented by
the warrants deemed surrendered and the U.S. Holder’s tax basis in the warrants deemed surrendered. In this case, a U.S.
Holder’s tax basis in the ordinary shares received would equal the sum of the fair market value of the ordinary shares represented
by the warrants deemed surrendered and the U.S. Holder’s tax basis in the warrants exercised. A U.S. Holder’s holding
period for the ordinary shares would commence on the date following the date of exercise of the warrant. Due to the absence of
authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative
tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders
should consult their tax advisors regarding the tax consequences of a cashless exercise.
Unearned Income Medicare Tax
A
3.8% Medicare contribution tax will generally apply to all or some portion of the net investment income of a U.S. Holder that
is an individual with adjusted gross income that exceeds a threshold amount ($250,000 if married filing jointly or if considered
a “surviving spouse” for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other
cases). This 3.8% tax will also apply to all or some portion of the undistributed net investment income of certain U.S. Holders
that are estates and trusts. For these purposes, dividends and gains from the taxable dispositions of the ordinary shares and
rights and warrants will generally be taken into account in computing such a U.S. Holder’s net investment income.
Information Reporting and Backup Withholding
Information
returns may be filed with the IRS with respect to dividends or other distributions we may pay to you and proceeds from the sale
of your ordinary shares, rights and warrants. You will be subject to backup withholding on these payments if you fail to provide
your taxpayer identification number to the paying agent and comply with certain certification procedures or otherwise establish
an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld with respect to your ordinary
shares or rights or warrants under the backup withholding rules will be refunded to you or credited against your United States
federal income tax liability, if any, by the IRS provided that certain required information is furnished to the IRS in a timely
manner.
88
Passive Foreign Investment Company Rules
A foreign (i.e., non-U.S.) corporation will be a PFIC for U.S. tax
purposes if at least 75% of its gross income in a taxable year,
including its pro rata share of the gross income of any corporation
in which it is considered to own at least 25% of the shares by
value, is passive income. Alternatively, a foreign corporation will
be a PFIC if at least 50% of its assets in a taxable year,
ordinarily determined based on fair market value and averaged
quarterly over the year, including its pro rata share of the assets
of any corporation in which it is considered to own at least 25% of
the shares by value, are held for the production of, or produce,
passive income. Passive income generally includes dividends,
interest, rents and royalties (other than rents or royalties
derived from the active conduct of a trade or business) and gains
from the disposition of passive assets.
Because we are a blank check company, with no current active
business, we believe that it is likely that we will meet the PFIC
asset or income test for our current taxable year. However,
pursuant to a start-up exception, a corporation will not be a PFIC
for the first taxable year the corporation has gross income, if (1)
no predecessor of the corporation was a PFIC; (2) the corporation
satisfies the IRS that it will not be a PFIC for either of the
first two taxable years following the start-up year; and (3) the
corporation is not in fact a PFIC for either of those years. The
applicability of the start-up exception to us will not be known
until after the close of our current taxable year. After the
acquisition of a company or assets in a business combination, we
may still meet one of the PFIC tests depending on the timing of the
acquisition and the amount of our passive income and assets as well
as the passive income and assets of the acquired business. If the
company that we acquire in a business combination is a PFIC, then
we will likely not qualify for the start-up exception and will be a
PFIC for our current taxable year ending December 31, 2014. Our
actual PFIC status for our current taxable year or any subsequent
taxable year, however, will not be determinable until after the end
of such taxable year. Accordingly, there can be no assurance with
respect to our status as a PFIC for our current taxable year or any
future taxable year.
If we are determined to be a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder of
our ordinary shares or rights and, in the case of our ordinary
shares, the U.S. Holder did not make either a timely qualified
electing fund (“QEF”) election for our first taxable
year as a PFIC in which the U.S. Holder held (or was deemed to
hold) ordinary shares, as described below, such holder generally
will be subject to special rules with respect to:
•
any gain recognized by the U.S. Holder on the sale or other disposition of its ordinary shares or rights or warrants; and
•
any “excess distribution” made to the U.S. Holder
(generally, any distributions to such U.S. Holder during a taxable
year of the U.S. Holder that are greater than 125% of the average
annual distributions received by such U.S. Holder in respect of the
ordinary shares during the three preceding taxable years of such
U.S. Holder or, if shorter, such U.S. Holder’s holding period
for the ordinary shares).
Under these rules,
•
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period
for the ordinary shares, rights or warrants;
•
the amount allocated to the U.S. Holder’s taxable year in
which the U.S. Holder recognized the gain or received the excess
distribution, or to the period in the U.S. Holder’s holding
period before the first day of our first taxable year in which we
are a PFIC, will be taxed as ordinary income;
•
the amount allocated to other taxable years (or portions thereof)
of the U.S. Holder and included in its holding period will be taxed
at the highest tax rate in effect for that year and applicable to
the U.S. Holder; and
•
the interest charge generally applicable to underpayments of tax
will be imposed in respect of the tax attributable to each such
other taxable year of the U.S. Holder.
In general, if we are determined to be a PFIC, a U.S. Holder will
avoid the PFIC tax consequences described above in respect to our
ordinary shares by making a timely QEF election to include in
income its pro rata share of our net capital gains (as long-term
capital gain) and other earnings and profits (as ordinary income),
on a current basis, in each case whether or not distributed, in the
taxable year of the U.S. Holder in which or with which our taxable
year ends. A U.S. Holder may make a separate election to defer the
payment of taxes on undistributed income inclusions under the QEF
rules, but if deferred, any such taxes will be subject to an
interest charge.
89
A
U.S. Holder may not make a QEF election with respect to its rights to acquire our ordinary shares. As a result, if a U.S. Holder
sells or otherwise disposes of such rights or warrants (other than upon exchange of rights or warrants), any gain recognized generally
will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above,
if we were a PFIC at any time during the period the U.S. Holder held the rights or warrants. If a U.S. Holder that exercises such
warrants properly makes a QEF election with respect to the newly acquired ordinary shares (or has previously made a QEF election
with respect to our ordinary shares), the QEF election will apply to the newly acquired ordinary shares, but the adverse tax consequences
relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue
to apply with respect to such newly acquired ordinary shares (which generally will be deemed to have a holding period for purposes
of the PFIC rules that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election
under the PFIC rules. The purging election creates a deemed sale of such shares at their fair market value. The gain recognized
by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution,
as described above. As a result of the purging election, the U.S. Holder will have a new basis and holding period in the ordinary
shares acquired upon the exercise of the warrants for purposes of the PFIC rules.
The QEF election is made on a shareholder-by-shareholder basis and,
once made, can be revoked only with the consent of the IRS. A U.S.
Holder generally makes a QEF election by attaching a completed IRS
Form 8621 (Return by a Shareholder of a Passive Foreign investment
Company or Qualified Electing Fund), including the information
provided in a PFIC annual information statement, to a timely filed
U.S. federal income tax return for the tax year to which the
election relates. Retroactive QEF elections generally may be made
only by filing a protective statement with such return and if
certain other conditions are met or with the consent of the IRS.
U.S. Holders should consult their own tax advisors regarding the
availability and tax consequences of a retroactive QEF election
under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S.
Holder must receive a PFIC annual information statement from us. If
we determine we are a PFIC for any taxable year, we will endeavor
to provide to a U.S. Holder such information as the IRS may
require, including a PFIC annual information statement, in order to
enable the U.S. Holder to make and maintain a QEF election.
However, there is no assurance that we will have timely knowledge
of our status as a PFIC in the future or of the required
information to be provided.
If a U.S. Holder has made a QEF election with respect to our
ordinary shares, and the special tax and interest charge rules do
not apply to such shares (because of a timely QEF election for our
first taxable year as a PFIC in which the U.S. Holder holds (or is
deemed to hold) such shares or a purge of the PFIC taint pursuant
to a purging election, as described above), any gain recognized on
the sale of our ordinary shares generally will be taxable as
capital gain and no interest charge will be imposed. As discussed
above, U.S. Holders of a QEF are currently taxed on their pro rata
shares of its earnings and profits, whether or not distributed. In
such case, a subsequent distribution of such earnings and profits
that were previously included in income generally should not be
taxable as a dividend to such U.S. Holders. The tax basis of a U.S.
Holder’s shares in a QEF will be increased by amounts that
are included in income, and decreased by amounts distributed but
not taxed as dividends, under the above rules. Similar basis
adjustments apply to property if by reason of holding such property
the U.S. Holder is treated under the applicable attribution rules
as owning shares in a QEF.
Although
a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally
apply for subsequent years to a U.S. Holder who held ordinary shares, rights or warrants while we were a PFIC, whether or not
we meet the test for PFIC status in those subsequent years. A U.S. Holder who makes the QEF election discussed above for our first
taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) our ordinary shares, however, will not be subject
to the PFIC tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be
subject to the QEF inclusion regime with respect to such shares for any taxable year of us that ends within or with a taxable
year of the U.S. Holder and in which we are not a PFIC. On the other hand, if the QEF election is not effective for each of our
taxable years in which we are a PFIC and the U.S. Holder holds (or is deemed to hold) our ordinary shares, the PFIC rules discussed
above will continue to apply to such shares unless the holder makes a purging election, as described above, and pays the tax and
interest charge with respect to the gain inherent in such shares attributable to the pre-QEF election period.
Alternatively,
if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable shares, the U.S. Holder
may make a mark-to-market election with respect to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market
election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) ordinary shares in
us and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in
respect to its ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if
any, of the fair market value of its ordinary shares at the end of its taxable year over the adjusted basis in its
90
ordinary
shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis
of its ordinary shares over the fair market value of its ordinary shares at the end of its taxable year (but only to the extent
of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in
its ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or
other taxable disposition of the ordinary shares will be treated as ordinary income. Currently, a mark-to-market election may
not be made with respect to the warrants.
The mark-to-market election is available only for stock that is
regularly traded on a national securities exchange that is
registered with the Securities and Exchange Commission, including
Nasdaq Capital Market, or on a foreign exchange or market that the
IRS determines has rules sufficient to ensure that the market price
represents a legitimate and sound fair market value. U.S. Holders
should consult their own tax advisors regarding the availability
and tax consequences of a mark-to-market election in respect to our
ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary that
is classified as a PFIC, U.S. Holders generally would be deemed to
own a portion of the shares of such lower-tier PFIC, and generally
could incur liability for the deferred tax and interest charge
described above if we receive a distribution from, or dispose of
all or part of our interest in, the lower-tier PFIC or the U.S.
Holders otherwise were deemed to have disposed of an interest in
the lower-tier PFIC. We will endeavor to cause any lower-tier PFIC
to provide to a U.S. Holder the information that may be required to
make or maintain a QEF election with respect to the lower-tier
PFIC. However, there is no assurance that we will have timely
knowledge of the status of any such lower-tier PFIC. In addition,
we may not hold a controlling interest in any such lower-tier PFIC
and thus there can be no assurance we will be able to cause the
lower-tier PFIC to provide the required information. U.S. Holders
are urged to consult their own tax advisors regarding the tax
issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC
during any taxable year of the U.S. Holder, may have to file an IRS
Form 8621 (whether or not a QEF or market-to-market election is
made) and such other information as may be required by the U.S.
Treasury Department.
The
rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in
addition to those described above. Accordingly, U.S. Holders of our ordinary shares, rights and warrants should consult their
own tax advisors concerning the application of the PFIC rules to our ordinary shares, rights and warrants under their particular
circumstances.
Non-U.S. Holders
Dividends (including constructive dividends) paid or deemed paid to
a Non-U.S. Holder in respect to its ordinary shares generally will
not be subject to U.S. federal income tax, unless the dividends are
effectively connected with the Non-U.S. Holder’s conduct of a
trade or business within the United States (and, if required by an
applicable income tax treaty, are attributable to a permanent
establishment or fixed base that such holder maintains in the
United States).
In
addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other
disposition of our ordinary shares, rights or warrants unless such gain is effectively connected with its conduct of a trade or
business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment
or fixed base that such holder maintains in the United States) or the Non-U.S. Holder is an individual who is present in the United
States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case,
such gain from United States sources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).
Dividends and gains that are effectively connected with the
Non-U.S. Holder’s conduct of a trade or business in the
United States (and, if required by an applicable income tax treaty,
are attributable to a permanent establishment or fixed base in the
United States) generally will be subject to U.S. federal income tax
(but not the Medicare contribution tax) at the same regular U.S.
federal income tax rates applicable to a comparable U.S. Holder
and, in the case of a Non-U.S. Holder that is a corporation for
U.S. federal income tax purposes, may also be subject to an
additional branch profits tax at a 30% rate or a lower applicable
tax treaty rate.
The
U.S. federal income tax treatment of a Non-U.S. Holder’s receipt of a share upon consummation of an initial business combination
or exercise of a warrant, or the lapse of a warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income
tax treatment of the receipt of a share or exercise or lapse of a warrant by a U.S. Holder, as described under “U.S. Holders—Exercise
or Lapse of a Right or Warrant,” above, although to the extent a cashless exercise results in a taxable
91
exchange,
the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holders gain on the sale
or other disposition of our ordinary shares, rights and warrants.
Backup Withholding and Information Reporting
In
general, information reporting for U.S. federal income tax purposes should apply to distributions made on our ordinary shares
within the United States to a U.S. Holder, subject to certain exceptions, and to the proceeds from sales and other dispositions
of our ordinary shares, rights or warrants by a U.S. Holder to or through a U.S. office of a broker. Payments made (and sales
and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances.
In
addition, backup withholding of U.S. federal income tax, currently at a rate of 28%, generally will apply to dividends paid on
our ordinary shares or warrants to a U.S. Holder and the proceeds from sales and other dispositions of shares or rights by a U.S.
Holder, in each case who:
•
fails to provide an accurate taxpayer identification number;
•
is
notified by the IRS that backup withholding is required; or
•
fails to comply with applicable certification requirements.
A Non-U.S. Holder generally will eliminate the requirement for
information reporting and backup withholding by providing
certification of its foreign status, under penalties of perjury, on
a duly executed applicable IRS Form W-8 or by otherwise
establishing an exemption.
We will withhold all taxes required to be withheld by law from any
amounts otherwise payable to any holder of our ordinary shares or
securities, including tax withholding required by the backup
withholding rules. Backup withholding is not an additional tax.
Rather, the amount of any backup withholding will be allowed as a
credit against a U.S. Holder’s or a Non-U.S. Holder’s
U.S. federal income tax liability and may entitle such holder to a
refund, provided that the requisite information is timely furnished
to the IRS. Holders are urged to consult their own tax advisors
regarding the application of backup withholding and the
availability of and procedure for obtaining an exemption from
backup withholding in their particular circumstances.
A 30% withholding tax will be imposed on payments to certain
foreign entities on dividends on and the gross proceeds of
dispositions of U.S. equity interests, unless various U.S.
information reporting and due diligence requirements (generally
relating to ownership by U.S. persons of interests in or accounts
with those entities) have been satisfied. Non-U.S. Holders should
consult their tax advisors regarding the possible implications of
this legislation on their investment in the units.
92
UNDERWRITING
We intend to offer our securities described in this prospectus
through the underwriters named below. EarlyBirdCapital, Inc. is the
representative for the underwriters. We have entered into an
underwriting agreement with the representative. Subject to the
terms and conditions of the underwriting agreement, each of the
underwriters has severally agreed to purchase from us the number of
units listed next to its name in the following table:
|
|
|
|
|
EarlyBirdCapital, Inc.
|
|
|
|
|
|
|
|
Total
|
|
4,000,000
|
A copy of the underwriting
agreement has been filed as an exhibit to the registration
statement of which this prospectus forms a part.
The underwriting agreement provides that the underwriters must
purchase all of the units if they purchase any of them. However,
the underwriters are not required to take or pay for the units
covered by the over-allotment option described below.
Our units are offered subject to a number of conditions,
including:
•
receipt and acceptance of the units by the underwriters; and
•
the underwriters’ right to reject orders in whole or in
part.
In connection with this offering, certain of the underwriters or
securities dealers may distribute prospectuses electronically.
Upon the execution of the underwriting agreement, the underwriters
will be obligated to purchase the units at the prices and upon the
terms stated therein, and, as a result, will thereafter bear any
risk associated with changing the offering price to the public or
other selling terms after completion of this offering.
Over-allotment
Option
We have granted the underwriters an option to buy up to 600,000
additional units. The underwriters may exercise this option solely
for the purpose of covering over-allotments, if any, made in
connection with this offering. The underwriters have 45 days from
the date of this prospectus to exercise this option. If the
underwriters exercise this option, they will each purchase
additional units approximately in proportion to the amounts
specified in the table above.
Commissions and
Discounts
Units sold by the underwriters to the public will initially be
offered at the offering price set forth on the cover of this
prospectus. Any units sold by the underwriters to securities
dealers may be sold at a discount of up to $_____ per unit from the
public offering price. Any of these securities dealers may resell
any units purchased from the underwriters to other brokers or
dealers at a discount of up to $_____ per unit from the public
offering price. If all of the units are not sold at the initial
public offering price, the representative may change the offering
price and the other selling terms. Upon execution of the
underwriting agreement, the underwriters will be obligated to
purchase the units at the prices and upon the terms stated therein,
and, as a result, will thereafter bear any risk associated with
changing the offering price to the public or other selling terms.
No offer or invitation to subscribe for units may be made to the
public in the Cayman Islands.
The following table shows the
per unit and total underwriting discounts and commissions we will
pay to the underwriters assuming both no exercise and full exercise
of the underwriters’ over-allotment option to purchase up to
an additional 600,000 units.
|
|
|
|
|
|
|
|
|
Public offering price
|
|
$
|
10.00
|
|
$
|
40,000,000
|
|
$
|
46,000,000
|
|
Discount
|
|
$
|
0.325
|
|
$
|
1,300,000
|
|
$
|
1,495,000
|
|
Proceeds before expenses
(1)
|
|
$
|
9.675
|
|
$
|
38,700,000
|
|
$
|
44,505,000
|
No discounts or commissions will be paid on the sale of the private
units.
93
Business Combination
Marketing Agreement
We have engaged EarlyBirdCapital to assist us in connection with
our initial business combination. Pursuant to this arrangement,
EarlyBirdCapital will assist us in holding meetings with our
shareholders to discuss the potential business combination and the
target business’s attributes, introduce us to potential
investors that may be interested in purchasing our securities,
assist us in obtaining shareholder approval for the business
combination and assist us with our press releases and certain
public filings in connection with the business combination.
Pursuant to this arrangement, we will pay EarlyBirdCapital a cash
fee equal to 4% of the gross proceeds received in this offering for
such services upon the consummation of our initial business
combination (exclusive of any applicable finders’ fees which
might become payable); provided that up to 25% of the fee may be allocated at our sole discretion to one or more advisors that assist us in identifying and consummating an initial business combination. We will also reimburse EarlyBirdCapital for
up to $20,000 of its reasonable costs and expenses incurred by it
(including reasonable fees and disbursements of counsel) in
connection with the performance of its services pursuant to the
agreement; provided, however, all expenses in excess of $5,000 in
the aggregate shall be subject to our prior written approval, which
approval will not be unreasonably withheld.
Private Units
EarlyBirdCapital
(and/or its designees) has committed to purchase 45,000 private units for an aggregate purchase price of $450,000, or $10.00 per
unit. EarlyBirdCapital has also agreed that if the over-allotment option is exercised by the underwriters in full or in part,
it will purchase from us at a price of $10.00 per unit the number of private units (up to a maximum of 1,733 private units) that
is necessary to maintain in the trust account an amount equal to $10.15 per ordinary share sold to the public in this offering.
The private units are identical to the units being sold in this offering except the private warrants will be non-redeemable and
may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted
transferees. Additionally, because the private warrants will be issued in a private transaction, the holders and their transferees
will be allowed to exercise such warrants for cash even if a registration statement covering the ordinary shares issuable upon
exercise of such warrants is not effective and receive unregistered ordinary shares. The private units, and the ordinary shares
and rights and warrants underlying the private units, the ordinary shares that are issuable for the rights and warrants included
in such units have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1)
of the FINRA Manual commencing on the effective date of the registration statement of which this prospectus forms a part. Pursuant
to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction
that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the
effective date of the registration statement of which this prospectus forms a part. Additionally, the private units purchased
by EarlyBirdCapital may not be sold, transferred, assigned, pledged or hypothecated during the 180-day period following the date
of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter
and any such participating selected dealer. EarlyBirdCapital has agreed that the private units it purchases will not be sold or
transferred by it (except to certain permitted transferees) until after we have completed an initial business combination. We
have granted the holders of private units, including EarlyBirdCapital, the registration rights as described under the section
“
Shares Eligible for Future Sale — Registration Rights
.” Notwithstanding anything to the contrary, the
warrants underlying the private units shall not be exercisable after the five year anniversary of the effective date of the registration
statement of which this prospectus forms a part.
Purchase
Option
We
have agreed to sell to the representative, for $100, an option to purchase up to a total of 400,000 units. The units issuable
upon exercise of this option are identical to those offered by this prospectus. This option is exercisable at $10.00 per unit,
and may be exercised on a cashless basis, in whole or in part, commencing on the later of the consummation of a business combination
or the one-year anniversary of the date of this prospectus. The option expires on the five-year anniversary of the effective date
of the registration statement of which this prospectus forms a part. Since the option is not exercisable until at the earliest
the consummation of a business combination, and the rights will result in the issuance of shares upon consummation of a business
combination, the option will effectively represent the right to purchase 457,142 ordinary shares (which includes the 57,142 ordinary
shares issuable for the rights included in the units) and 400,000 warrants to purchase 200,000 ordinary shares at $11.50 per share,
for $4,000,000. Notwithstanding anything to the contrary, neither the option nor the warrants underlying the purchase option shall
be exercisable after the five year anniversary of the effective date of the registration statement of which this prospectus forms
a part. The option and the 400,000 units and the securities underlying the 400,000 units have been deemed compensation by FINRA
and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of the FINRA Conduct Rules. Accordingly, the option
may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of any
94
hedging, short sale, derivative, put,
or call transaction that would result in the effective economic disposition of the securities by
any person for a period of 180 days immediately following the effective date of the registration statement of which this prospectus
forms a part, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners
and except as otherwise provided in Rule 5110(g)(2) of the FINRA Conduct Rules. Although the purchase option and its underlying
securities have been registered under the registration statement of which this prospectus forms a part, the option grants to holders
demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration
statement of which this prospectus forms a part with respect to the registration under the Securities Act of the securities directly
and indirectly issuable upon exercise of the option. We will bear all fees and expenses attendant to registering the securities,
other than underwriting commissions which will be paid for by the holders themselves. We will have no obligation to net cash settle
the exercise of the purchase option or the warrants underlying the purchase option. The holder of the purchase option will not
be entitled to exercise the purchase option or the warrants underlying the purchase option unless a registration statement covering
the securities underlying the purchase option is effective or an exemption from registration is available. If the holder is unable
to exercise the purchase option or underlying warrants, the purchase option or warrants, as applicable, will expire worthless.
The exercise price and number of units issuable upon exercise of
the option may be adjusted in certain circumstances including in
the event of a share dividend, or our recapitalization,
reorganization, merger or consolidation. However, the option will
not be adjusted for issuances of ordinary shares at a price below
its exercise price.
Listing of our
Securities
There
is presently no public market for our units, ordinary shares, rights or warrants. We have applied to have the units, and the ordinary
shares and rights and warrants once they begin separate trading, listed on Nasdaq under the symbols “ANDAU,” “ANDA”
and “ANDAR” and “ANDAW,” respectively. Although, after giving effect to this offering, we meet on a pro
forma basis the minimum initial listing standards of Nasdaq, which generally only requires that we meet certain requirements relating
to shareholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements,
we cannot assure you that our securities will continue to be listed on Nasdaq as we might not meet certain continued listing standards.
Pricing of
Securities
We have been advised by the representative that the underwriters
propose to offer the units to the public at the offering price set
forth on the cover page of this prospectus.
Prior
to this offering there has been no public market for any of our securities. The public offering price of the units and the terms
of the rights and warrants were negotiated between us and the representative. Factors considered in determining the prices and
terms of the units, including the ordinary shares and rights and warrants underlying the units, include:
•
the history and prospects of companies whose principal business is
the acquisition of other companies;
•
prior offerings of those companies;
•
our prospects for acquiring an operating business at attractive
values;
•
our capital structure;
•
the per share amount of net proceeds being placed into the trust
account;
•
an
assessment of our management and their experience in identifying
operating companies;
•
general conditions of the securities markets at the time of the
offering; and
•
other factors as were deemed relevant.
However, although these factors were considered, the determination
of our offering price is more arbitrary than the pricing of
securities for an operating company in a particular industry since
the underwriters are unable to compare our financial results and
prospects with those of public companies operating in the same
industry.
95
Regulatory Restrictions
on Purchase of Securities
Rules of the SEC may limit the ability of the underwriters to bid
for or purchase our units before the distribution of the units is
completed. However, the underwriters may engage in the following
activities in accordance with the rules:
•
Stabilizing
Transactions
. The underwriters may make bids or
purchases for the purpose of preventing or retarding a decline in
the price of our units, as long as stabilizing bids do not exceed
the offering price of $10.00 and the underwriters comply with all
other applicable rules.
•
Over-Allotments and
Syndicate Coverage Transactions
. The underwriters may
create a short position in our units by selling more of our units
than are set forth on the cover page of this prospectus up to the
amount of the over-allotment option. This is known as a covered
short position. The underwriters may also create a short position
in our units by selling more of our units than are set forth on the
cover page of this prospectus and the units allowed by the
over-allotment option. This is known as a naked short position. If
the underwriters create a short position during the offering, the
representative may engage in syndicate covering transactions by
purchasing our units in the open market. The representative may
also elect to reduce any short position by exercising all or part
of the over-allotment option. Determining what method to use in
reducing the short position depends on how the units trade in the
aftermarket following the offering. If the unit price drops
following the offering, the short position is usually covered with
shares purchased by the underwriters in the aftermarket. However,
the underwriters may cover a short position by exercising the
over-allotment option even if the unit price drops following the
offering. If the unit price rises after the offering, then the
over-allotment option is used to cover the short position. If the
short position is more than the over-allotment option, the naked
short must be covered by purchases in the aftermarket, which could
be at prices above the offering price.
•
Penalty
Bids
. The representative may reclaim a selling
concession from a syndicate member when the units originally sold
by the syndicate member are purchased in a stabilizing or syndicate
covering transaction to cover syndicate short positions.
Stabilization and syndicate covering transactions may cause the
price of our securities to be higher than they would be in the
absence of these transactions. The imposition of a penalty bid
might also have an effect on the prices of our securities if it
discourages resales of our securities.
Neither we nor the underwriters make any representation or
prediction as to the effect that the transactions described above
may have on the price of our securities. These transactions may
occur on Nasdaq, in the over-the-counter market or on any trading
market. If any of these transactions are commenced, they may be
discontinued without notice at any time.
Other Terms
We are obligated to reimburse the underwriters up to $48,000 for
(i) filing fees, costs and expenses (including fees and
disbursements of underwriters’ counsel not to exceed $15,000)
incurred in registering the offering with FINRA; (ii) preparation
of transaction “bibles” and lucite cube
“mementos” (with expenses not to exceed $3,000 for such
transaction “bibles” and lucite cube
“mementos”); and (iii) the costs of an investigative
search firm to conduct background checks on our principals, up to a
maximum of $30,000 in the aggregate.
Except as set forth above, we are not under any contractual
obligation to engage any of the underwriters to provide any
services for us after this offering, and have no present intent to
do so. However, any of the underwriters may, among other things,
introduce us to potential target businesses or assist us in raising
additional capital, as needs may arise in the future. If any
underwriter provides services to us after this offering, we may pay
the underwriter fair and reasonable fees that would be determined
at that time in an arm’s length negotiation; provided that no
agreement will be entered into with the underwriter and no fees for
such services will be paid to the underwriter prior to the date
which is 90 days after the date of this prospectus, unless FINRA
determines that such payment would not be deemed
underwriter’s compensation in connection with this
offering.
Indemnification
We have agreed to indemnify the underwriters against some
liabilities, including civil liabilities under the Securities Act,
or to contribute to payments the underwriters may be required to
make in this respect.
96
Selling
Restrictions
Canada
Resale Restrictions
We intend to distribute our securities in the Province of Ontario,
Canada (the “Canadian Offering Jurisdiction”) by way of
a private placement and exempt from the requirement that we prepare
and file a prospectus with the securities regulatory authorities in
such Canadian Offering Jurisdiction. Any resale of our securities
in Canada must be made under applicable securities laws that will
vary depending on the relevant jurisdiction, and which may require
resales to be made under available statutory exemptions or under a
discretionary exemption granted by the applicable Canadian
securities regulatory authority. Canadian resale restrictions in
some circumstances may apply to resales of interests made outside
of Canada. Canadian purchasers are advised to seek legal advice
prior to any resale of our securities. We may never be a
“reporting issuer”, as such term is defined under
applicable Canadian securities legislation, in any province or
territory of Canada in which our securities will be offered and
there currently is no public market for any of the securities in
Canada, and one may never develop. Canadian investors are advised
that we have no intention to file a prospectus or similar document
with any securities regulatory authority in Canada qualifying the
resale of the securities to the public in any province or territory
in Canada.
Representations of Purchasers
A Canadian purchaser will be required to represent to us and the
dealer from whom the purchase confirmation is received that:
•
the purchaser is entitled under applicable provincial securities
laws to purchase our securities without the benefit of a prospectus
qualified under those securities laws;
•
where required by law, that the purchaser is purchasing as
principal and not as agent;
•
the purchaser has reviewed the text above under Resale
Restrictions; and
•
the purchaser acknowledges and consents to the provision of
specified information concerning its purchase of our securities to
the regulatory authority that by law is entitled to collect the
information.
Rights of Action — Ontario Purchasers Only
Under Ontario securities legislation, certain purchasers who
purchase a security offered by this prospectus during the period of
distribution will have a statutory right of action for damages, or
while still the owner of our securities, for rescission against us
in the event that this prospectus contains a misrepresentation
without regard to whether the purchaser relied on the
misrepresentation. The right of action for damages is exercisable
not later than the earlier of 180 days from the date the purchaser
first had knowledge of the facts giving rise to the cause of action
and three years from the date on which payment is made for our
securities. The right of action for rescission is exercisable not
later than 180 days from the date on which payment is made for our
securities. If a purchaser elects to exercise the right of action
for rescission, the purchaser will have no right of action for
damages against us. In no case will the amount recoverable in any
action exceed the price at which our securities were offered to the
purchaser and if the purchaser is shown to have purchased the
securities with knowledge of the misrepresentation, we will have no
liability. In the case of an action for damages, we will not be
liable for all or any portion of the damages that are proven to not
represent the depreciation in value of our securities as a result
of the misrepresentation relied upon. These rights are in addition
to, and without derogation from, any other rights or remedies
available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario
purchasers should refer to the complete text of the relevant
statutory provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named
herein are located outside of Canada and, as a result, it may not
be possible for Canadian purchasers to effect service of process
within Canada upon us or those persons. All of our assets and the
assets of those persons are located outside of Canada and, as a
result, it may not be possible to satisfy a judgment against us or
those persons in Canada or to enforce a judgment obtained in
Canadian courts against us or those persons outside of Canada.
97
Collection of Personal Information
If a Canadian purchaser is resident in or otherwise subject to the
securities laws of the Province of Ontario, the Purchaser
authorizes the indirect collection of personal information
pertaining to the Canadian purchaser by the Ontario Securities
Commission (the “OSC”) and each Canadian purchaser will
be required to acknowledge and agree that the Canadian purchaser
has been notified by us (i) of the delivery to the OSC of personal
information pertaining to the Canadian purchaser, including,
without limitation, the full name, residential address and
telephone number of the Canadian purchaser, the number and type of
securities purchased and the total purchase price paid in respect
of the securities, (ii) that this information is being collected
indirectly by the OSC under the authority granted to it in
securities legislation, (iii) that this information is being
collected for the purposes of the administration and enforcement of
the securities legislation of Ontario, and (iv) that the title,
business address and business telephone number of the public
official in Ontario who can answer questions about the OSC’s
indirect collection of the information is the Administrative
Assistant to the Director of Corporate Finance, the Ontario
Securities Commission, Suite 1903, Box 5520, Queen Street West,
Toronto, Ontario, M5H 3S8, Telephone: (416) 593-8086, Facsimile:
(416) 593-8252.
Cayman Islands
No offer or invitation to subscribe for shares may be made to the
public in the Cayman Islands.
98
LEGAL MATTERS
Graubard Miller, New York, New York, is acting as United States
counsel in connection with the registration of our securities under
the Securities Act and will pass on the validity of the rights
offered in the prospectus. Legal matters as to Cayman
Islands’ law, as well as the validity of the issuance of the
shares offered in this prospectus, will be passed upon for us by
Maples and Calder, Cayman Islands. Blank Rome LLP, New York, New
York, is acting as counsel for the underwriters in this
offering.
EXPERTS
The financial statements of Andina Acquisition Corp. II as of
August 21, 2015 and for the period from July 1, 2015 (inception)
through August 21, 2015 appearing in this prospectus have been
audited by Marcum LLP, independent registered public accounting
firm, as set forth in their report, thereon (which contains an
explanatory paragraph relating to substantial doubt about the
ability of Andina Acquisition Corp. II to continue as a going
concern as described in Note 1 to the financial statements),
appearing elsewhere in this prospectus, and are included in
reliance on such report given on the authority of such firm as an
experts in auditing and accounting.
WHERE YOU CAN FIND
ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1,
which includes exhibits, schedules and amendments, under the
Securities Act, with respect to this offering of our securities.
Although this prospectus, which forms a part of the registration
statement, contains all material information included in the
registration statement, parts of the registration statement have
been omitted as permitted by rules and regulations of the SEC. We
refer you to the registration statement and its exhibits for
further information about us, our securities and this offering. The
registration statement and its exhibits, as well as our other
reports filed with the SEC, can be inspected and copied at the
SEC’s public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. The public may obtain information about the
operation of the public reference room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a web site at
http://www.sec.gov
which contains the Form S-1 and other reports, proxy and
information statements and information regarding issuers that file
electronically with the SEC.
99
Andina Acquisition Corp. II
INDEX TO FINANCIAL
STATEMENTS
F-1
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of
Directors and Shareholders of
Andina Acquisition Corp. II
We have audited the accompanying balance sheet of Andina
Acquisition Corp. II (the “Company”) as of August 21,
2015, and the related statements of operations, changes in
shareholders’ equity and cash flows for the period from July
1, 2015 (inception) through August 21, 2015. These financial
statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Andina
Acquisition Corp. II, as of August 21, 2015, and the results of its
operations and its cash flows for the period from July 1, 2015
(inception) through August 21, 2015 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company has no present revenue,
its business plan is dependent on the completion of a financing and
the Company’s cash and working capital as of August 21, 2015
are not sufficient to complete its planned activities for the
upcoming year. These conditions raise substantial doubt about the
Company’s ability to continue as a going concern.
Management’s plans regarding these matters are also described
in Notes 1 and 3. These financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
|
/s/ Marcum LLP
|
|
|
|
|
|
|
|
Marcum llp
|
|
|
|
New York, NY
September 3, 2015, except for Note 7 as to which the date is
October 8, 2015
|
|
|
F-2
ANDINA ACQUISITION CORP.
II
August 21,
2015
|
Assets
|
|
|
|
|
|
Deferred offering costs associated with initial
public offering
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’
Equity
|
|
|
|
|
|
Accrued expenses
|
|
$
|
4,077
|
|
|
Due to related party
|
|
|
30,000
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
34,077
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity:
|
|
|
|
|
|
Preferred shares, $0.0001 par value; 1,000,000
shares authorized; no shares issued and outstanding
|
|
|
|
|
|
Ordinary shares, $0.0001 par value; 100,000,000
shares authorized; 1,150,000 shares issued and
outstanding
(1)
|
|
|
115
|
|
|
Additional paid-in capital
|
|
|
24,885
|
|
|
Accumulated deficit
|
|
|
(9,077
|
)
|
|
|
|
|
|
|
|
Total
shareholders’ equity
|
|
|
15,923
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders’ Equity
|
|
$
|
50,000
|
|
The accompanying notes are an integral part of these financial
statements.
F-3
ANDINA ACQUISITION CORP.
II
For The Period From July
1, 2015 (Inception) through August 21, 2015
|
Formation and operating costs
|
|
$
|
9,077
|
|
|
Net
loss
|
|
$
|
(9,077
|
)
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and
diluted
(1)
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per ordinary share
|
|
$
|
(0.01
|
)
|
The accompanying notes are an integral part of these financial
statements.
F-4
ANDINA ACQUISITION CORP.
II
STATEMENT OF CHANGES IN
SHAREHOLDERS’ EQUITY
For The Period From July
1, 2015 (Inception) through August 21, 2015
|
|
|
|
|
Additional Paid-In
|
|
Accumulated
|
|
Total
Shareholders’
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares issued to initial
shareholder
|
|
1,150,000
|
|
$
|
115
|
|
$
|
24,885
|
|
$
|
—
|
|
|
$
|
25,000
|
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,077
|
)
|
|
|
(9,077
|
)
|
|
Balance – August 21, 2015
|
|
1,150,000
|
|
$
|
115
|
|
$
|
24,885
|
|
$
|
(9,077
|
)
|
|
$
|
15,923
|
|
The accompanying notes are an integral part of these financial
statements.
F-5
ANDINA ACQUISITION CORP.
II
For The Period From July
1, 2015 (Inception) through August 21, 2015
|
Cash
Flows from Operating Activities
|
|
|
|
|
|
Net loss
|
|
$
|
(9,077
|
)
|
|
Adjustments to reconcile net loss to net cash
used in operating activities:
|
|
|
|
|
|
Formation costs paid by related party
|
|
|
5,000
|
|
|
Changes in operating assets and
liabilities
|
|
|
|
|
|
Accrued expenses
|
|
|
4,077
|
|
|
Net
cash used in operating activities
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities
|
|
|
|
|
|
Proceeds from issuance of ordinary shares to
initial shareholders
|
|
|
25,000
|
|
|
Payment of deferred offering costs
|
|
|
(25,000
|
)
|
|
Net
cash provided by financing activities
|
|
|
—
|
|
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents – beginning of the
period
|
|
|
—
|
|
|
Cash
and cash equivalents – ending of the period
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash investing and financing
activities:
|
|
|
|
|
|
Payment of deferred offering costs made by
shareholder and included in due to related party
|
|
$
|
25,000
|
|
The accompanying notes are an integral part of these financial
statements.
F-6
Andina Acquisition Corp. II
Notes to Financial Statements
Note 1:-
Organization
and Plan of Business Operations and Going Concern
Consideration
Andina Acquisition Corp. II (the “Company”) was
incorporated in the Cayman Islands on July 1, 2015 as a blank check
company for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, recapitalization, reorganization
or other similar business combination with one or more businesses
or entities (a “Business Combination”). The
Company’s efforts to identify a prospective target business
will not be limited to a particular industry or geographic region,
although the Company initially intends to focus on target
businesses in the Andean region of South America and in Central
America.
At August 21, 2015, the Company had not yet commenced any
operations. All activity through August 21, 2015 relates to the
Company’s formation and the proposed public offering
described below. The Company has selected December 31 as its fiscal
year-end. The Company is an early stage and emerging growth company
and, as such, the Company is subject to all of the risks associated
with early stage and emerging growth companies.
Proposed Public Offering
and Private Placement
The
Company’s ability to commence operations is contingent upon obtaining adequate financial resources through the proposed
public offering of 4,000,000 units (or 4,600,000 units if the underwriters’ over-allotment option is exercised in full)
(“Units”) at a purchase price of $10.00 per unit as discussed in Note 3 (the “Proposed Public Offering”),
and the sale of (i) an aggregate of 265,000 units (“Insider Units”) at a price of $10.00 per unit to certain shareholders,
or their affiliates, (“Initial Shareholders”) and (ii) an aggregate of 45,000 units (“EBC Units” and together
with the Insider Units, the “Private Units”) at a price of $10.00 per unit to EarlyBirdCapital, Inc. (“EBC”
or the “Representative”), and/or their respective designees. These additional Private Units will be purchased in a
private placement that will occur simultaneously with the Proposed Public Offering (the “Private Placement”). All
of the proceeds received from these purchases will be placed in the Trust Account described below. In addition, the Initial Shareholders
and EBC have also agreed that if the over-allotment option is exercised by the underwriters, they and/or their respective designees
will purchase from the Company an additional number of Private Units pro rata, up to a maximum of 28,500 Private Units, that is
necessary to maintain in the Trust Account an amount equal to $10.15 per unit sold to the public in this offering.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public
Offering and Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. Upon
the closing of the Proposed Public Offering, management has agreed that at least $10.15 per Unit sold in the Proposed
Public Offering, including the proceeds of the Private Placements will be held in a trust account (“Trust Account”)
and invested in U.S. government treasuries, bonds or notes having a maturity of 180 days or less or in money market funds meeting
the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and that invest solely
in United States treasuries until the earlier of (i) the consummation of its initial Business Combination or (ii) the Company’s
failure to consummate a Business Combination within 18 months from the consummation of the Proposed Public Offering (or 21 months
from the consummation of the Proposed Public Offering if the Company has entered into a letter of intent, memorandum of understanding
or definitive agreement with a target business for a Business Combination within 18 months from the consummation of this offering
and a Business Combination has not yet been consummated within such 18-month period). Placing funds in the Trust Account may not
protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers,
prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind
in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. One of the
Company’s Directors will agree to be personally liable if the Company is unable to complete a Business Combination within
the required time period to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or
claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold
to the Company. However, such Director may not be able to satisfy those obligations should they arise. The remaining net proceeds
(not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions
and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released
to the Company to fund working capital requirements as well as for any amounts that are necessary to pay the Company’s income
and other tax obligations.
F-7
Andina Acquisition Corp. II
Notes to Financial Statements
Note 1:-
Organization
and Plan of Business Operations and Going Concern
Consideration
(cont.)
The amount of proceeds not held in trust will remain constant at
approximately $750,000 even if the over-allotment is exercised. In
order to meet its working capital needs following the consummation
of the Proposed Public Offering, the Company’s Initial
Shareholders, officers and directors or their affiliates may, but
are not obligated to, loan the Company funds, from time to time or
at any time, in whatever amount they deem reasonable in their sole
discretion. Each loan would be evidenced by a promissory note. The
notes would either be paid upon consummation of the Company’s
initial Business Combination, without interest, or, at the
lender’s discretion, up to $500,000 of the notes may be
converted upon consummation of the Company’s Business
Combination into additional Private Units at a price of $10.00 per
unit. If the Company does not complete a Business Combination, the
loans would not be repaid.
Initial Business
Combination
Pursuant to the Nasdaq Capital Markets listing rules, the
Company’s initial Business Combination must be with a target
business or businesses whose collective fair market value is at
least equal to 80% of the balance in the Trust Account at the time
of the execution of a definitive agreement for such Business
Combination, although this may entail simultaneous acquisitions of
several target businesses. The fair market value of the target will
be determined by the Company’s board of directors based upon
one or more standards generally accepted by the financial community
(such as actual and potential sales, earnings, cash flow and/or
book value). The target business or businesses that the Company
acquires may have a collective fair market value substantially in
excess of 80% of the Trust Account balance. In order to consummate
such a Business Combination, the Company may issue a significant
amount of its debt or equity securities to the sellers of such
business and/or seek to raise additional funds through a private
offering of debt or equity securities.
In connection with any
proposed initial Business Combination, the Company will either (1)
seek shareholder approval of such initial Business Combination at a
meeting called for such purpose at which holders of the outstanding
ordinary shares sold in the Proposed Public Offering (“Public
Shareholders”) may seek to convert such shares (“Public
Shares”), regardless of whether they vote for or against the
proposed Business Combination, into their pro rata share of the
aggregate amount then on deposit in the Trust Account (net of taxes
payable) or (2) provide Public Shareholders with the opportunity to
sell their Public Shares to the Company by means of a tender offer
(and thereby avoid the need for a shareholder vote) for an amount
equal to their pro rata share of the aggregate amount then on
deposit in the Trust Account (net of taxes payable).
Notwithstanding the foregoing, the Initial Shareholders will agree,
pursuant to written letter agreements with the Company, not to
convert any Public Shares held by them into their pro rata share of
the aggregate amount then on deposit in the Trust Account. If the
Company determines to engage in a tender offer, such tender offer
will be structured so that each public shareholder may tender any
or all of his, her or its Public Shares rather than some pro rata
portion of his, her or its shares. In that case, the Company will
file tender offer documents with the SEC which will contain
substantially the same financial and other information about the
initial Business Combination as is required under the SEC’s
proxy rules. The decision as to whether the Company will seek
shareholder approval of a proposed Business Combination or will
allow shareholders to sell their shares to it in a tender offer
will be made by the Company based on a variety of factors such as
the timing of the transaction, whether the terms of the transaction
would otherwise require it to seek shareholder approval or whether
the Company is deemed to be a foreign private issuer (which would
require us to conduct a tender offer rather than seeking
shareholder approval under SEC rules). The Company will consummate
an initial Business Combination only if it has net tangible assets
of at least $5,000,001 upon such consummation of a Business
Combination and, solely if it seeks shareholder approval, a
majority of the outstanding ordinary shares voted are voted in
favor of the Business Combination. The $5,000,001 net tangible
asset value would be determined once a target business is located
and the Company can assess all of the assets and liabilities of the
combined company, which would include the fee payable to EBC as
discussed below, any out-of-pocket expenses incurred by the Initial
Shareholders, officers, directors or their affiliates in connection
with certain activities on the Company’s behalf, such as
identifying and investigating possible business targets and
Business Combinations that have not been repaid at that time, as
well as any other liabilities of the Company’s and the
liabilities of the target business.
The
Initial Shareholders have agreed (i) to vote their insider shares, private shares and any Public Shares purchased in or after
the Proposed Public Offering in favor of any proposed Business Combination and (ii) not to convert any shares (including the insider
shares) in connection with a shareholder vote to approve, or sell their shares to the Company in any tender offer in
F-8
Andina Acquisition Corp. II
Notes to Financial Statements
Note 1:-
Organization
and Plan of Business Operations and Going Concern
Consideration
(cont.)
connection
with, a proposed initial Business Combination; provided that certain of the Initial Shareholders will be permitted to convert,
or sell their public shares to the Company, in connection with a proposed Business Combination. The Representative has also agreed
to vote their private shares in favor of any proposed Business Combination.
Notwithstanding the foregoing, a public shareholder, together with
any affiliate of his or any other person with whom he is acting in
concert or as a “group” (as defined in Section 13(d)(3)
of the Exchange Act) will be restricted from seeking conversion
rights with respect to 20% or more of the ordinary shares sold in
this offering. Accordingly, all shares in excess of 20% of the
shares sold in this offering held by a holder will not be converted
to cash.
Failure to Consummate a
Business Combination
Pursuant
to the terms of the Company’s proposed amended and restated memorandum and articles of association to be effected prior
to the completion of the Proposed Public Offering, failure to consummate a Business Combination within 18 months from the consummation
of the Proposed Public Offering (or 21 months from the consummation of the Proposed Public Offering if the Company has entered
into a letter of intent, memorandum of understanding or definitive agreement with a target business for a Business Combination
within 18 months from the consummation of the Proposed Public Offering and a Business Combination has not yet been consummated
within such 18-month period) will trigger the automatic winding up, dissolution and liquidation. In such event, holders of Public
Shares will share ratably in the Trust Account, including any interest not previously released to the Company, and any net assets
remaining available for distribution to them after payment of liabilities. The Representative and the holders of the insider shares
and private rights will not participate in any liquidation distribution with respect to their insider shares or private rights.
Going Concern
Consideration
At August 21, 2015, the Company had no cash and a working capital
deficit of $34,077. Further, the Company has incurred, and expects
to continue to incur, significant costs in pursuit of its financing
and acquisition plans. These conditions raise substantial doubt
about the Company’s ability to continue as a going concern.
Management plans to address this uncertainty through the Proposed
Public Offering as discussed in Note 3. There is no assurance that
the Company’s plans to raise capital or to consummate a
Business Combination will be successful or successful within the
required time period. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Note 2:-
Significant Accounting Policies
Basis of
Presentation
The accompanying financial statements are presented in U.S. dollars
and have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S.
GAAP”) and pursuant to the accounting and disclosure rules
and regulations of the U.S. Securities and Exchange Commission
(“SEC”).
Loss per
share
Loss per share is computed by
dividing net loss by the weighted-average number of ordinary shares
outstanding during the period excluding ordinary shares subject to
forfeiture. Weighted average shares was reduced for the effect of
an aggregate of 150,000 ordinary shares that are subject to
compulsory repurchase if the over-allotment option is not exercised
by the underwriters.
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those
estimates.
F-9
Andina Acquisition Corp. II
Notes to Financial Statements
Note 2:-
Significant Accounting Policies
(cont.)
Deferred Offering
Costs
Deferred offering costs consist principally of legal, underwriting
fees and other costs incurred through the balance sheet date that
are directly related to the Proposed Public Offering and that will
be charged to shareholders’ equity upon the receipt of the
capital raised. Should the Proposed Public Offering prove to be
unsuccessful, these deferred costs as well as additional expenses
to be incurred will be charged to operations.
Income Taxes
The Company accounts for income taxes under Accounting Standards
Codification (“ASC”) Topic 740 “Income
Taxes” (“ASC 740”). ASC 740 requires the
recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statement and
tax basis of assets and liabilities and for the expected future tax
benefit to be derived from tax loss and tax credit carry forwards.
ASC 740 additionally requires a valuation allowance to be
established when it is more likely than not that all or a portion
of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income
taxes recognized in an enterprise’s financial statements and
prescribes a recognition threshold and measurement process for
financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. ASC 740 also
provides guidance on derecoginition, classification, interest and
penalties, accounting in interim periods, disclosure and
transition. The Company determined that the Cayman Islands is its
only major tax jurisdiction. Based on the Company’s
evaluation, it has been concluded that there are no significant
uncertain tax positions requiring recognition in the
Company’s financial statements. Since the Company was
incorporated on July 1, 2015, the evaluation was performed for the
upcoming 2015 tax year, which will be the only period subject to
examination upon filing of appropriate tax returns. The Company
believes that its income tax positions and deductions would be
sustained on audit and does not anticipate any adjustments that
would result in a material changes to its financial position.
The Company’s policy for recording interest and penalties
associated with audits is to record such expense as a component of
income tax expense. There were no amounts accrued for penalties or
interest as of or during the period from July 1, 2015 (inception)
through August 21, 2015. Management is currently unaware of any
issues under review that could result in significant payments,
accruals or material deviations from its position.
Recent Accounting
Pronouncements
Management does not believe that any recently issued, but not yet
effective, accounting standards if currently adopted would have a
material effect on the accompanying financial statements.
Subsequent
Events
The Company evaluates events that have occurred after the balance
sheet date through October 8, 2015, the date which these financial
statements were available to be issued.
Note 3:- Proposed Public Offering
The
Proposed Public Offering calls for the Company to offer for public sale up to 4,000,000 Units at a proposed offering price of
$10.00 per Unit (plus up to an additional 600,000 Units solely to cover over-allotments, if any). Each Unit consists of one ordinary
share in the Company, one right to receive one-seventh (1/7) of a share upon consummation of an initial Business Combination and
one redeemable warrant to purchase one half of one ordinary share for $11.50. No fractional shares will be issued. In the event
the Company will not be the surviving company upon completion of an initial Business Combination, each holder of a right will
be required to affirmatively convert his, her or its rights in order to receive the 1/7 of a share underlying each right upon
consummation of the Business Combination. There is no length of time within which an investor must affirmatively elect to convert
the rights. However, until a holder affirmatively elects to convert his, her or its rights, the right certificates held by such
holder will not represent the ordinary shares they are convertible for but instead will simply represent the right to receive
such ordinary shares.
F-10
Andina Acquisition Corp. II
Notes to Financial Statements
Note 3:- Proposed Public Offering
(cont.)
Each
Warrant entitles the holder to purchase one-half of one ordinary share at a price of $11.50 per full ordinary share commencing
on the later of the Company’s completion of its initial Business Combination or 12 months from the effective date of the
registration statement relating to the Proposed Public Offering, and expiring five years from the completion of the Company’s
initial Business Combination. The Company will not issue fractional shares. As a result, investors must exercise Warrants in multiples
of two Warrants, at a price of $11.50 per full share, subject to adjustment, to validly exercise the Warrants. The Company may
redeem the Warrants at a price of $0.01 per Warrant upon 30 days’ notice, only in the event that the last sale price of
the ordinary shares is at least $24.00 per share for any 20 trading days within a 30-trading day period (“30-Day Trading
Period”) ending on the third day prior to the date on which notice of redemption is given, provided there is a current registration
statement in effect with respect to the ordinary shares underlying such Warrants commencing five business days prior to the 30-Day
Trading Period and continuing each day thereafter until the date of redemption. If the Company redeems the Warrants as described
above, management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.”
In accordance with the warrant agreement relating to the Warrants to be sold and issued in the Proposed Public Offering the Company
is only required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants. If
a registration statement is not effective within 90 days following the consummation of a Business Combination, Warrant holders
may, until such time as there is an effective registration statement and during any period when the Company shall have failed
to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from
registration under the Securities Act of 1933, as amended. In the event that a registration statement is not effective at the
time of exercise or no exemption is available for a cashless exercise, the holder of such Warrant shall not be entitled to exercise
such Warrant for cash and in no event (whether in the case of a registration statement being effective or otherwise) will the
Company be required to net cash settle the Warrant exercise. Additionally, in no event will the Company be required to net cash
settle the Rights or Warrants. If an initial Business Combination is not consummated, the Rights and Warrants will expire and
will be worthless.
If
the Company is unable to complete an initial Business Combination within the required time period and the Company redeems the
Public Shares for the funds held in the Trust Account, holders of rights and warrants will not receive any of such funds for their
rights and warrants and the rights and warrants will expire worthless.
Note 4:- Due to Related Party
As of August 21, 2015, a
director has advanced an aggregate of $30,000 to cover expenses
related to the Company’s formation and the Proposed Public
Offering. These advances are payable without interest upon the
closing of the Proposed Public Offering. The Company intends to
repay these advances from the proceeds of the Proposed Public
Offering not placed in the Trust Account.
Note 5:- Commitments
Underwriting
Agreement
On August 13, 2015, the Company entered into a non-binding letter
of intent with the Representative setting forth the terms of the
Proposed Public Offering. Such letter of intent is merely a
statement of intent and is subject to change and further
negotiation between the parties and may be adjusted prior to the
execution of the formal Underwriting Agreement to be entered upon
effectiveness of the Proposed Public Offering. It is anticipated
that the Underwriting Agreement will require the Company to pay an
underwriting discount of 3.25% of the gross proceeds of the
Proposed Public Offering as an underwriting discount, of which
$25,000 was already paid as of August 21, 2015 as an advance
against out of pocket expenses. The Company has further engaged the
Representative to assist the Company with its initial Business
Combination. Pursuant to this arrangement, the Company anticipates
that the Representative will assist the Company in holding meetings
with shareholders to discuss the potential Business Combination and
the target business’ attributes, introduce the Company to
potential investors that are interested in purchasing the
Company’s securities, assist the Company in obtaining
shareholder approval for the Business Combination and assist the
Company with its press releases and public filings in connection
with the Business Combination. The Company will pay the
Representative a cash fee of 4% of the gross proceeds of the
Proposed Public Offering for such services upon the consummation of
its initial Business Combination (exclusive of any applicable
finders’ fees which might become payable). The Company will
also reimburse the Representative for up to $20,000 of its
reasonable costs and expenses incurred by it (including reasonable
fees and disbursements of counsel) in connection with the
performance of its services
F-11
Andina Acquisition Corp. II
Notes to Financial Statements
Note 5:- Commitments
(cont.)
pursuant to the agreement; provided, however, all expenses in
excess of $5,000 in the aggregate shall be subject to prior written
approval, which approval will not be unreasonably withheld.
Private Units
The
Initial Shareholders and the Representative have committed that they or their respective designees will purchase from the Company
an aggregate of 310,000 Private Units, at $10.00 per unit for a total purchase price of $3,100,000. These purchases will take
place on a private placement basis simultaneously with the consummation of this offering. The Initial Shareholders and the Representative
have also agreed that if the over-allotment option is exercised by the underwriters, they will purchase from the Company an additional
number of Private Units (up to a maximum of 28,500 Private Units) pro rata with the amount of the over-allotment option exercised
so that at least $10.15 per share sold to the public in the Proposed Public Offering is held in Trust Account regardless of whether
the over-allotment option is exercised in full or part. These additional Private Units will be purchased in a private placement
that will occur simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The proceeds
from the private placement of the Private Units will be added to the proceeds of the Proposed Public Offering and placed in an
account in the United States. The foregoing purchases will only be made by the purchasers if they are able to do so in accordance
with Regulation M and Sections 9(a)(2) and 10(b) and Rule 10b-5 of the Exchange Act.
The
Private Units will be identical to the units sold in the Proposed Public Offering except the warrants included in the Private
Units will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the
initial purchasers or their permitted transferees. Additionally, because the warrants included in the Private Units will be issued
in a private transaction, the holders and their transferees will be allowed to exercise such warrants for cash even if a registration
statement covering the ordinary shares issuable upon exercise of such warrants is not effective and receive unregistered ordinary
shares. Furthermore, the purchasers have agreed (A) to vote the private shares in favor of any proposed Business Combination,
(B) not to propose, or vote in favor of, an amendment to the Company’s proposed amended and restated memorandum and articles
of association to be effected prior to the completion of this offering with respect to its pre-Business Combination activities
prior to the consummation of such a Business Combination unless the Company provides dissenting Public Shareholders with the opportunity
to convert their Public Shares in connection with any such vote, (C) not to convert any private shares for cash from the Trust
Account in connection with a shareholder vote to approve a proposed initial Business Combination or a vote to amend the provisions
of the Company’s amended and restated memorandum and articles of association relating to shareholders’ rights or pre-Business
Combination activity and (D) that the private shares shall not participate in any liquidating distribution upon winding up if
a Business Combination is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the Private
Units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree
to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above)
until the completion of an initial Business Combination.
Unit Purchase
Option
Upon
closing of the Proposed Public Offering, the Company will issue an option to the Representative and/or its designees to purchase
400,000 units for $100 (“Unit Purchase Option”). This option is exercisable at $10.00 per unit, commencing on the
later of the consummation of a Business Combination or the first anniversary of the effective date of the Proposed Public Offering
and terminating on the fifth anniversary of such date. Since the option is not exercisable until the consummation of a Business
Combination at the earliest, and the rights will result in the issuance of shares upon consummation of a Business Combination,
the option will effectively represent the right to purchase 457,142 ordinary shares (which includes the 57,142 ordinary shares
issuable for the rights included in the units, as well as 400,000 warrants to purchase 200,000 ordinary shares for $11.50 per
share). The Unit Purchase Option grants to the holders demand and “piggy back” registration rights for periods of
five and seven years, respectively, from the effective date of the Registration Statement with respect to the securities directly
and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses attendant to registering the
securities, other than underwriting commissions which will be paid for by the holders themselves.
F-12
Andina Acquisition Corp. II
Notes to Financial Statements
Note 5:- Commitments
(cont.)
The
Company intends to account for the fair value of the unit purchase option, inclusive of the receipt of a $100 cash payment, as
an expense of the Proposed Public Offering resulting in a charge directly to shareholder’s equity. The Company estimates
that the fair value of this unit purchase option is approximately $2 million (or $5.01 per unit) using the Black-Scholes option-pricing
model. The fair value of the unit purchase option to be granted to the Representative is estimated as of the date of grant using
the following assumptions: (1) expected volatility of 57.71%, (2) risk-free interest rate of 1.52%, and (3) expected life of five
years. The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option,
such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of
the unit purchase option and the market price of the Units and underlying ordinary shares) to exercise the unit purchase option
without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase option.
Registration
Rights
The Initial Shareholder will be entitled to registration rights
with respect to their insider shares and the purchasers of the
Private Units will be entitled to registration rights with respect
to the Private Units (and underlying securities), pursuant to an
agreement to be signed prior to or on the effective date of the
Proposed Public Offering. The holders of the majority of the
insider shares can elect to exercise these registration rights at
any time commencing three months prior to the date on which these
ordinary shares are to be released from escrow. The holders of a
majority of the Private Units (or underlying securities) issued in
payment of working capital loans made to the Company can elect to
exercise these registration rights at any time after the consummate
a Business Combination. In addition, the holders have certain
“piggy-back” registration rights with respect to
registration statements filed subsequent to the consummation of a
Business Combination. The Company will bear the expenses incurred
in connection with the filing of any such registration
statements.
Note 6:- Shareholders’ Equity
Preferred
Shares
The Company is authorized to issue 1,000,000 preferred shares with
a par value of $0.0001 per share with such designation, rights and
preferences as may be determined from time to time by the
Company’s board of directors. As of August 21, 2015, no
preferred share is issued or outstanding.
Ordinary Shares
The Company is authorized to issue 100,000,000 ordinary shares with
a par value of $0.0001 per share.
In connection with the organization of the Company, a total of
1,150,000 ordinary shares were sold to the Initial Shareholders at
a price of approximately $0.02 per share for an aggregate of
$25,000. This number includes an aggregate of up to 150,000 shares
subject to compulsory repurchase to the extent that the
underwriters’ over-allotment option is not exercised in full
so that the Company’s Initial Shareholders will own 20% of
the issued and outstanding shares (excluding shares underlying the
Private Units) after the Proposed Public Offering.
All of these shares will be placed in escrow until (1) with respect
to 50% of the insider shares, the earlier of one year after the
date of the consummation of the initial Business Combination and
the date on which the closing price of the Company’s ordinary
shares equals or exceeds $12.50 per share, as adjusted, for any 20
trading days within any 30-trading day period commencing after the
initial Business Combination and (2) with respect to the remaining
50% of the insider shares, one year after the date of the
consummation of the initial Business Combination, or earlier, in
either case, if, subsequent to the initial Business Combination,
the Company consummates a liquidation, merger, share exchange or
other similar transaction which results in all of the shareholders
having the right to exchange their shares for cash, securities or
other property. Up to 150,000 of the insider shares may also be
released from escrow earlier than this date for cancellation if the
over-allotment option is not exercised in full as described
above.
F-13
Andina Acquisition Corp. II
Notes to Financial Statements
Note 7:- Subsequent Event
Advisory
Agreement
The Company has engaged B. Riley & Co. LLC (“B.
Riley”) to provide certain advisory services in connection
with the Company’s initial Business Combination. In exchange
for such services, the Company has agreed to pay B. Riley $250,000
in cash upon the consummation of the Proposed Public Offering.
F-14
Until __________, 2015, all dealers that effect transactions in
these securities, whether or not participating in this offering,
may be required to deliver a prospectus. This is in addition to the
dealers’ obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
No dealer, salesperson or any other person is authorized to give
any information or make any representations in connection with this
offering other than those contained in this prospectus and, if
given or made, the information or representations must not be
relied upon as having been authorized by us. This prospectus does
not constitute an offer to sell or a solicitation of an offer to
buy any security other than the securities offered by this
prospectus, or an offer to sell or a solicitation of an offer to
buy any securities by anyone in any jurisdiction in which the offer
or solicitation is not authorized or is unlawful.
$40,000,000
Andina Acquisition Corp. II
4,000,000 Units
_______________
PROSPECTUS
_______________
Sole Book-Running Manager
EarlyBirdCapital, Inc.
PART II
INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 13. Other Expenses
of Issuance and Distribution.
The estimated expenses payable by us in connection with the
offering described in this registration statement (other than the
underwriting discount and commissions) will be as follows:
|
Initial Trustees’ fee
|
|
$
|
1,000
|
(1)
|
|
SEC Registration Fee
|
|
|
5,800
|
|
|
FINRA filing fee
|
|
|
8,000
|
|
|
Accounting fees and expenses
|
|
|
35,000
|
|
|
Nasdaq listing fees
|
|
|
50,000
|
|
|
Printing and engraving expenses
|
|
|
45,000
|
|
|
Directors & Officers liability insurance
premiums
|
|
|
70,000
|
(2)
|
|
Legal fees and expenses
|
|
|
280,000
|
|
|
Miscellaneous
|
|
|
25,200
|
(3)
|
|
Total
|
|
$
|
520,000
|
|
Item 14. Indemnification
of Directors and Officers.
Cayman Islands law does not limit the extent to which a
company’s memorandum and articles of association may provide
for indemnification of officers and directors, except to the extent
any such provision may be held by the Islands courts to be contrary
to public policy, such as to provide indemnification against
willful default, willful neglect, civil fraud or the consequences
of committing a crime. Our memorandum and articles of association
will provide for indemnification of our officers and directors to
the maximum extent permitted by law, including for any liability
incurred in their capacities as such, except through their own
actual fraud, willful default or willful neglect.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling us pursuant to the foregoing provisions, we have been
informed that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is
theretofore unenforceable.
Item 15. Recent Sales of
Unregistered Securities.
(a)
During the
past three years, we sold the following ordinary shares without
registration under the Securities Act:
In July 2015, the Company issued an aggregate of 1,150,000 ordinary
shares to its initial shareholders for an aggregate purchase price
of $25,000, or approximately $0.02 per share, in connection with
the Company’s organization pursuant to the exemption from
registration contained in Section 4(a)(2) of the Securities
Act.
In
addition, the initial shareholders and EarlyBirdCapital have committed to purchase an aggregate of 310,000 private units from
the Company on a private placement basis simultaneously with the consummation of this offering. The initial shareholders and EarlyBirdCapital
have also agreed that if the over-allotment option is exercised by the underwriters in full or in part, they will purchase from
the Company at a price of $10.00 per unit up to an additional 28,500 private units. These issuances will be made pursuant to the
exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to
such sales.
II-1
Item 16. Exhibits and
Financial Statement Schedules.
(a)
The
following exhibits are filed as part of this Registration
Statement:
|
|
|
|
|
1.1
|
|
Form
of Underwriting Agreement.
|
|
1.2
|
|
Business
Combination Marketing Agreement between between the Registrant at EarlyBirdCapital, Inc.
|
|
3.1
|
|
Amended
and Restated Memorandum and Articles of Association.
|
|
4.1
|
|
Specimen
Unit Certificate.
|
|
4.2
|
|
Specimen
Ordinary Share Certificate.
|
|
4.3
|
|
Specimen
Right Certificate.
|
|
4.4
|
|
Form
of Rights Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
4.5
|
|
Form
of Unit Purchase Option between the Registrant and EarlyBirdCapital, Inc.
|
|
4.6
|
|
Specimen
Warrant Certificate
|
|
4.7
|
|
Form
of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
5.1
|
|
Opinion
of Maples and Calder.
|
|
5.2
|
|
Opinion
of Graubard Miller.
|
|
10.1
|
|
Form
of Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and the Company’s officers, directors and shareholders.
|
|
10.2
|
|
Form
of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
10.3
|
|
Form
of Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Shareholders.*
|
|
10.4
|
|
Form
of Registration Rights Agreement among the Registrant and the Initial Shareholders and EarlyBirdCapital.*
|
|
10.5
|
|
Form
of Subscription Agreement among the Registrant, Graubard Miller and the Initial Shareholders and EarlyBirdCapital.
|
|
10.6
|
|
Advisory
Agreement between the Registrant and B. Riley & Co. LLC.*
|
|
14
|
|
Form
of Code of Ethics.*
|
|
23.1
|
|
Consent of Marcum LLP.
|
|
23.2
|
|
Consent
of Maples and Calder (included in Exhibit 5.1).
|
|
23.3
|
|
Consent
of Graubard Miller (included in Exhibit 5.2).
|
|
24
|
|
Power of Attorney (included on signature page of
this Registration Statement).
|
|
99.1
|
|
Form
of Audit Committee Charter.*
|
|
99.2
|
|
Form
of Nominating Committee Charter.*
|
|
99.3
|
|
Form
of Compensation Committee Charter.*
|
Item 17.
Undertakings.
(a)
The
undersigned registrant hereby undertakes:
(1)
To file,
during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
i.
To
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
ii.
To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b)
II-2
if, in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
iii.
To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2)
That, for
the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial
bona fide
offering thereof.
(3)
To remove
from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination
of the offering.
(4)
That for the
purpose of determining any liability under the Securities Act of
1933 in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
i.
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
ii.
Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
iii.
The
portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv.
Any other
communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(5)
That for the
purpose of determining liability under the Securities Act of 1933
to any purchaser, if the registrant is subject to Rule 430C, each
prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included
in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of
first use.
(b)
The
undersigned hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreements, certificates in
such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.
(c)
Insofar as
indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-3
(d)
The
undersigned registrant hereby undertakes that:
(1)
For purposes
of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective.
(2)
For the
purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
II-4
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New York, on the 6
th
day of November, 2015.
|
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
|
|
By:
|
|
/s/ Julio A. Torres
|
|
|
|
Name:
|
|
Julio A. Torres
|
|
|
|
Title:
|
|
Chief Executive Officer
|
POWER OF
ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Julio A. Torres and B. Luke
Weil his true and lawful attorney-in-fact, with full power of
substitution and resubstitution for him and in his name, place and
stead, in any and all capacities to sign any and all amendments
including post-effective amendments to this registration statement,
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitute, each acting alone, may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Julio A. Torres
|
|
Chief
Executive Officer (Principal executive officer) and Director
|
|
November
6, 2015
|
|
Julio
A. Torres
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Mauricio Orellana
|
|
Chief
Financial Officer (Principal financial and accounting officer)
|
|
November
6, 2015
|
|
Mauricio
Orellana
|
|
and
Director
|
|
|
|
|
|
|
|
|
|
/s/
B. Luke Weil
|
|
Director
|
|
November
6, 2015
|
|
B.
Luke Weil
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Matthew S. N. Kibble
|
|
Director
|
|
November
6, 2015
|
|
Matthew
S. N. Kibble
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Edward G. Navarro
|
|
Director
|
|
November
6, 2015
|
|
Edward
G. Navarro
|
|
|
|
|
II-5
Exhibit 1.1
4,000,000 Units
ANDINA ACQUISITION CORP.
II
UNDERWRITING AGREEMENT
New York, New York
[ ● ],
2015
EarlyBirdCapital, Inc.
366 Madison Avenue, 8
th
Floor
New York, New York 10017
As Representative of the Underwriters
named on
Schedule A
hereto
Ladies and Gentlemen:
Andina Acquisition
Corp. II, a Cayman Islands exempted company (the “
Company
”), hereby confirms its agreement with EarlyBirdCapital,
Inc. (the “
Representative
”) and with the other underwriters named on
Schedule A
hereto, for which
the Representative is acting as representative (the Representative, with such other underwriters being collectively referred to
herein as the “
Underwriters
” or, individually, an “
Underwriter
”) as follows:
1.
Purchase and Sale of 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 to the several Underwriters, severally and not
jointly, an aggregate of 4,000,000 units (the “
Firm Units
”) of the Company at a purchase price (net of discounts
and commissions) of $9.675 per Firm Unit. The Underwriters, severally and not jointly, agree to purchase from the Company
the number of Firm Units set forth opposite their respective names on Schedule A.
1.1.2.
The Firm Units are to be offered initially to the public (the “
Offering
”) at the offering price of $10.00
per Firm Unit. Each Firm Unit consists of one ordinary share of the Company, par value $0.0001 per share (the “
Ordinary
Shares
”), one right (the “
Right(s)”
) entitling the holder to receive one-seventh (1/7) of an Ordinary
Share upon consummation of any initial merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization
or other similar business combination with one or more businesses or entities (a “
Business Combination”
) and
one warrant (“
Warrant
”) which entitles the holder to purchase one-half (1/2) of one Ordinary Share for $11.50 per
full share during the period commencing on the later of the consummation by the Company of its Business Combination and one year
from the Effective Date (defined below) and terminating on the earlier of (i) the five-year anniversary of the consummation of
a Business Combination, (ii) the liquidation of the Trust Account (defined below) if the Company is unable to consummate a Business
Combination by the Termination Date (as defined in Section 7.6) or (iii) upon redemption of the Warrants. The Company has the right to redeem the Warrants, in whole but not in part, upon not less than thirty (30) days' prior written
notice at a price of $0.01 per Warrant at any time while the Warrants are exercisable; provided, however, that the last sale
price of the Ordinary Shares has been at least $24.00 for any twenty (20) trading days within a thirty (30) trading day period
ending on the third (3rd) Business Day (defined below) prior to the day on which notice is delivered, and provided that, if,
and only if, there is a current registration statement in effect with respect to the Ordinary Shares underlying such Warrants
commencing five business days prior to and 30-day trading period and continuing each day thereafter until the date of redemption.
For purpose of clarity, the Private Warrants (as defined in Section 1.4.2) are not redeemable while in the hands of the initial
purchasers or their permitted transferees. The Ordinary Shares
and the Rights 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 of its decision to allow earlier separate trading, but in no event will the Representative allow separate
trading until the preparation of an audited balance sheet of the Company reflecting receipt by the Company of the proceeds of
the Offering and the filing of a Current Report on Form 8-K by the Company with the Securities and Exchange Commission (the “
Commission
”)
which includes such balance sheet. The Company will file the Current Report on Form 8-K promptly upon, but in no event
more than four (4) Business Days (as defined below) following, the consummation of the Offering. As used herein, the term “
Business
Day
” shall mean any day other than a Saturday, Sunday or any day on which national banks in New York, New York are not
open for business.
1.1.3.
Payment and Delivery
. Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York time,
on the third (3rd) Business Day following the commencement of trading of the Firm Units, or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of the Representative or at such other place as shall be agreed upon
by the Representative and the Company. The closing of the Offering is referred to herein as the “
Closing
”
and the hour and date of delivery and payment for the Firm Units is referred to herein as the “
Closing Date
.”
Payment for the Firm Units shall be made on the Closing Date through the facilities of Depository Trust Company (“
DTC
”)
by wire transfer in Federal (same day) funds. The Company shall receive an aggregate of $41,350,000 of net proceeds
from the sale of the Firm Units and the Private Units (each as defined below), of which $40,600,000 shall be deposited into
the trust account (the “
Trust Account
”) established by the Company for the benefit of the Public Shareholders
(as defined below), as described in the Registration Statement and pursuant to the terms of an Investment Management Trust Agreement
(the “
Trust Agreement
”) between the Company and Continental Stock Transfer & Trust Company (“
CST&T
”). The
remaining proceeds (less actual expense payments or other fees payable pursuant to this Agreement) shall be paid to the order
of the Company upon delivery of certificates (in form and substance reasonably satisfactory to the Representative) representing
the Firm Units (or through the facilities of the DTC for the account of the Representative). 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 (2) 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 (1) 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. As used herein,
the term “
Public Shareholders
” means the holders of Ordinary Shares sold as part of the Units in the Offering
or acquired in the aftermarket, including any of the Insiders (as defined in Section 1.4.1 herein) to the extent they acquire
such Ordinary Shares in the Offering or in the aftermarket (and solely with respect to such Ordinary Shares).
2
1.2.
Over-Allotment
Option
1.2.1.
The
Representative shall have the option (the “
Over-Allotment Option”
) to purchase all or less than all of the
additional 600,000 units (the “
Option Units
”) for the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Units. Such Option Units shall, at the
Representative’s election, be purchased for each account of the several Underwriters in the same proportion as the
number of Firm Units set forth opposite such Underwriter’s name on Schedule A hereto bears to the total number of units
of Firm Units (subject to adjustment by the Representative to eliminate fractions). Such Option Units shall be
identical in all respects to the Firm Units. The Firm Units and the Option Units are hereinafter collectively
referred to as the “
Units
,” and the Units, the Ordinary Shares, the Rights, and the Warrants included in
the Units and the Ordinary Shares issuable pursuant to the terms of the Rights and upon exercise of the Warrants
are hereinafter referred to collectively as the “
Public Securities
.” No Option Units shall be sold
or delivered unless the Firm Units previously have been, or simultaneously are, sold and delivered. The right
to purchase the Option Units, or any portion thereof, may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice by the Representative to the Company. The
purchase price to be paid for each Option Unit (net of discounts and commissions) will be $9.675 per Option Unit.
1.2.2.
Exercise of Option
. The Over-Allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time) of the Option Units within 45 days after the Effective
Date. The Representative 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 accordance with Section 10.1 herein 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 (5) full Business Days after the date of the notice or such other time as shall be agreed upon
by the Company and the Representative, at the offices of the Representative or at such other place as shall be agreed upon by the
Company and the Representative. Upon exercise of the Over-Allotment Option, the Company will become obligated to convey
to the Representative, and, subject to the terms and conditions set forth herein, the Representative 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: $9.675 per Option Unit shall be deposited in the Trust Fund pursuant to the Trust Agreement
upon delivery of certificates (in form and substance satisfactory to the Representative) representing the Option Units (or through
the facilities of DTC) for the account of the Representative). 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.
3
1.3.
Representative’s
Purchase Option
. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on
the Closing Date an option (“
Representative’s Purchase Option
”) to purchase up to an aggregate of
400,000 units (the “
Representative’s Units
”) for an aggregate purchase price of $100.00. The
Representative’s Purchase Option shall be exercisable whether for cash or on a cashless basis, in whole or in part,
commencing on the later of the consummation of a Business Combination or one year from the Effective Date and expiring on the
five-year anniversary of the Effective Date. The initial exercise price per Representative’s Unit shall be $10.00,
which is equal to one hundred percent (100%) of the initial public offering price of a Unit. The Representative’s
Purchase Option, the Representative’s Units, the Ordinary Shares included in the Representative’s Units, the
Rights included in the Representative’s Units (the
“Representative’s Rights”
), the Warrants
included in the Representative's Units (the "Representative's Warrants"), and the Ordinary Shares issuable pursuant to the
terms of the Representative’s Rights and 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’s Units, the Representative’s Rights, the Representative's Warrants and the Ordinary Shares
included in the Representative’s Units and issuable pursuant to the terms of the Representative’s Rights and
upon exercise of the Representative's Warrants are hereinafter referred to collectively as the
“Representative’s Registrable
Securities.”
Delivery and payment for the Representative’s Purchase Option shall be made on the Closing
Date. The Company shall deliver to the Representative, 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. The Representative’s Purchase Option may not be sold, transferred, assigned, pledged or hypothecated for
180 days following the Effective Date of the Registration Statement except to any underwriter and selected dealer
participating in the Offering and their bona fide officers or partners pursuant to FINRA Conduct Rule 5110(g)(1).
1.4.
Private
Placement
.
1.4.1.
The Company issued to certain persons and entities referenced in Part II, Item 15 of the Registration Statement (collectively,
the “
Insiders
”), for aggregate consideration of $25,000, 1,150,000 Ordinary Shares (the “
Insider Shares
”)
in a private placement intended to be exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended
(the “
Act
”). No underwriting discounts, commissions or placement fees have been or will be payable
in connection with the sale of the Insider Shares. The Insider Shares are subject to restrictions on transfer pursuant
to the terms of the Escrow Agreement (as defined in Section 2.24.3 hereof). The Insiders shall have no right to any
liquidation distributions with respect to any portion of the Insider Shares in the event the Company fails to consummate a Business
Combination. The Insiders shall not have conversion rights with respect to the Insider Shares. To the extent
that the Over-allotment Option is not exercised by the Underwriters in full or in part, up to 150,000 Ordinary Shares out of the
1,150,000 Insider Shares shall be subject to compulsory repurchase by the Company as set forth in the Escrow Agreement.
4
1.4.2.
Simultaneously with the Closing Date, the Insiders and the Representative (and/or its designees) will purchase from the
Company pursuant to the Subscription Agreements (as defined in Section 2.25.2 hereof), an aggregate of 265,000 and 45,000 Units,
respectively, the
“Private Units”
) at a purchase price of $10.00 per Private Unit in a private placement (the
“
Private Placement
”) intended to be exempt from registration under the Act. The Private Units will be identical
to the Firm Units except that the Warrants included in the Private Units (the “
Private Warrants
”) will be exercisable
for cash or on a cashless basis, at the holder's option, and will not be redeemable by the Company, in each case so long as they
are still held by the initial purchasers or their affiliates. None of the Private Units (or underlying securities)
may be sold, assigned or transferred by the purchasers until the consummation of a Business Combination (except for limited exceptions).
No underwriting discounts, commissions or placement fees have been or will be payable in connection with the Private Placement.
The purchasers have also agreed that, in the event the Representative has exercised the Over-allotment Option, they will purchase
up to 26,767 and 1,733 additional Private Units, respectively, on a pro-rata basis, such that the proceeds from the sale of the
Option Units ($9.675 per Option Unit) and additional Private Units shall equal $10.15 per Option Unit.
1.5.
Working
Capital; Trust Account Proceeds
.
1.5.1.
Working Capital
. Upon consummation of the Offering, it is intended that $750,000 of the proceeds from
the sale of the Firm Units and Private Units will be released to the Company to fund the working capital requirements of the Company.
1.5.2.
Trust Account Proceeds
. Prior to the liquidation of the Trust Account in the event the Company has not completed
a Business Combination by the Termination Date, (i) interest earned on the funds held in the Trust Account may be released to the
Company from the Trust Account to pay any taxes incurred by the Company and (ii) any remaining interest income on the funds held
in the Trust Account may be released to the Company from the Trust Account to fund the Company’s working capital requirements,
all as more fully described in the Prospectus.
2.
Representations and Warranties of the Company.
The Company represents and warrants to the Underwriters as follows:
2.1.
Filing
of Registration Statemen
t.
2.1.1.
Pursuant to the Act
. The Company has filed with the Commission a registration statement and an amendment or
amendments thereto, on Form S-1 (File No. 333-207037, including any related preliminary prospectus (the “
Preliminary
Prospectus
”, including any prospectus that is included in the Registration Statement immediately prior to the effectiveness
of the Registration Statement), for the registration of the Public Securities and the Representative’s Registrable Securities
under the Act, which registration statement and amendment or amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations (the “
Regulations
”) of the Commission under the Act.
The conditions for use of Form S-1 to register the Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied. Except as the context may otherwise require, such registration statement, as amended, on file
with the Commission at the time the registration statement becomes effective (including the prospectus, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a
part thereof as of such time pursuant to Rule 430A of the Regulations), is hereinafter called the “
Registration Statement
,”
and the form of the final prospectus dated the Effective Date included in the Registration Statement (or, if applicable, the form
of final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A of the Regulations
filed with the Commission pursuant to Rule 424 of the Regulations), is hereinafter called the “
Prospectus
.” For
purposes of this Agreement, “
Time of Sale
”, as used in the Act, means 5:00 p.m., New York City time, on the
date of this Agreement. Prior to the Time of Sale, the Company prepared preliminary prospectuses, dated [ ● ],
2015 , for distribution by the Underwriters (together the “
Statutory 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 under the Securities Act with the filing of such Rule 462(b) Registration Statement. The
Registration Statement has been declared effective by the Commission on the date hereof. If, subsequent to the date
of this Agreement, the Company or the Representative has determined that at the Time of Sale the Statutory Prospectus included
an untrue statement of a material fact or omitted a statement of material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and have agreed to provide an opportunity to purchasers
of the Firm Units to terminate their old purchase contracts and enter into new purchase contracts, then the Statutory Prospectus
will be deemed to include any additional information available to purchasers at the time of entry into the first such new purchase
contract.
5
2.1.2.
Pursuant
to the Exchange Act
. The Company has filed with the Commission a Registration Statement on Form 8-A (File Number
001-[ ● ]) providing for the registration under the Securities Exchange Act of 1934, as amended
(the “
Exchange Act
”), of the Units, Ordinary Shares, Rights and Warrants. The registration of the
Units, Ordinary Shares, Rights 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 Company’s knowledge, any foreign or state regulatory authority
has issued any order or threatened to issue any order preventing or suspending the use of any Statutory 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.
10b
-5
Representation
. At the time of effectiveness of the Registration Statement (or at the time any
post-effective amendment to the Registration Statement) and at all times subsequent thereto up to the Closing Date, the
Registration Statement, the Statutory Prospectus and the Prospectus contained or will contain all material statements that
are required to be stated therein in accordance with the Act and the Regulations, and did or will, in all material respects,
conform to the requirements of the Act and the Regulations. On the Effective Date and at the Time of Sale, the
Registration Statement did not, and on the Closing Date it will not, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading;
on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus (together with any supplement
thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading; and at the Time of
Sale, the Statutory Prospectus does not include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that the representation and warranty made in this Section 2.3.1 does not apply to (i) statements
contained in the section captioned “Underwriting – Selling Restrictions – Canada” or (ii) 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 Underwriters expressly for use in the Registration Statement, the Statutory Prospectus or
Prospectus or any amendment thereof or supplement thereto, which information, it is agreed, shall consist solely of the
subsection captioned “
Pricing of Securities
.”
6
2.3.2.
Disclosure
of Agreements
. The agreements and documents described in the Registration Statement, the Statutory Prospectus and
the Prospectus conform to the descriptions thereof contained therein and there are no agreements or other documents required
to be described in the Registration Statement, the Statutory Prospectus or the Prospectus or to be filed with the
Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a party or by which its property or business is or
may be bound or affected and (i) that is referred to in the Registration Statement or attached as an exhibit thereto, or (ii)
is material to the Company’s business, has been duly and validly executed by the Company, is in full force and effect
in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the foreign, federal and state securities laws, and (z) that the remedy of
specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought, and none of such agreements or instruments has
been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in breach or
default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of
notice, or both, would constitute a breach or default thereunder. To the Company’s knowledge, performance by the
Company of the material provisions of such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to
environmental laws and regulations.
7
2.3.3.
Prior Securities Transactions
. No securities of the Company have been sold by the Company or by or on behalf
of, or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company since the
date of the Company’s formation, except as disclosed in the Registration Statement.
2.3.4.
Regulations
. The disclosures in the Registration Statement, the Statutory Prospectus and the Prospectus
concerning the effects of foreign, federal, state and local regulation on the Company’s business as currently contemplated
are correct in all material respects and do not omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading.
2.4.
Changes
After Dates in Registration Statement
.
2.4.1.
No Material Adverse Change
. Since the respective dates as of which information is given in the Registration
Statement, the Statutory Prospectus and the Prospectus, except as otherwise specifically stated therein: (i) there has been no
material adverse change in the condition, financial or otherwise, of the Company; (ii) there have been no material transactions
entered into by the Company, other than as contemplated pursuant to this Agreement; (iii) no member of the Company’s board
of directors or management has resigned from any position with the Company and (iv) no event or occurrence has taken place which
materially impairs, or would likely materially impair, with the passage of time, the ability of the members of the Company’s
board of directors or management to act in their capacities with the Company as described in the Registration Statement, the Statutory
Prospectus and the Prospectus.
2.4.2.
Recent Securities Transactions, etc.
Subsequent to the respective dates as of which information is given
in the Registration Statement, the Statutory 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 share capital.
2.5.
Independent Accountants. Marcum LLP (“
Marcum
”), whose report is filed with the Commission as
part of the Registration Statement and included in the Registration Statement, the Statutory Prospectus and the Prospectus,
are independent registered public accountants as required by the Act, the Regulations and the Public Company Accounting
Oversight Board (the “
PCAOB
”), including the rules and regulations promulgated by such
entity. To the Company’s knowledge, Marcum is duly registered and in good standing with the
PCAOB. Marcum has not, during the periods covered by the financial statements included in the Registration
Statement, the Statutory Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act.
8
2.6.
Financial
Statements; Statistical Data.
2.6.1.
Financial
Statements
. The financial statements, including the notes thereto and supporting schedules included
in the Registration Statement, the Statutory Prospectus and the Prospectus, fairly present the financial position and the results
of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared
in conformity with United States generally accepted accounting principles, consistently applied throughout the periods involved;
and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein
in conformity with the Regulations. No other financial statements or supporting schedules are required to be included or
incorporated by reference in the Registration Statement, the Statutory Prospectus or the Prospectus. The Registration
Statement, the Statutory Prospectus and the Prospectus disclose all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may
have a material current or future effect on the Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. There
are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, the Statutory
Prospectus or the Prospectus in accordance with Regulation S-X of the Regulations which have not been included as so required.
2.6.2.
Statistical Data
. The statistical, industry-related and market-related data included in the Registration
Statement, the Statutory Prospectus and/or the Prospectus are based on or derived from sources which the Company reasonably and
in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.
2.7.
Authorized
Capital; Options, etc
. The Company had at the date or dates indicated in each of the Registration Statement, the Statutory
Prospectus and the Prospectus, as the case may be, duly authorized, issued and outstanding capitalization as set forth in the Registration
Statement, the Statutory Prospectus and the Prospectus. Based on the assumptions stated in the Registration Statement, the
Statutory Prospectus and the Prospectus, the Company will have on the Closing Date the adjusted share capitalization set forth
therein. Except as set forth in, or contemplated by, the Registration Statement, the Statutory Prospectus and the Prospectus,
on the Effective Date and on the Closing Date, there will be no options, warrants, or other rights to purchase or otherwise acquire
any authorized, but unissued Ordinary Shares or any security convertible into Ordinary Shares, or any contracts or commitments
to issue or sell Ordinary Shares or any such options, warrants, rights or convertible securities.
9
2.8.
Valid
Issuance of Securities, etc
.
2.8.1.
Outstanding Securities
.
All issued and outstanding Ordinary Shares of
the Company 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 outstanding Ordinary Shares conform to the descriptions thereof contained in the
Registration Statement, the Statutory Prospectus and the Prospectus. All offers, sales and any transfers of the outstanding Ordinary
Shares of the Company were at all relevant times either registered under the Act and the applicable state securities or Blue Sky
laws or exempt from such registration requirements.
2.8.2.
Securities
Sold Pursuant to this Agreement
. The Securities have been duly authorized and reserved for issuance and
when issued and paid for in accordance with this Agreement, 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 Statutory Prospectus and the Prospectus, as the case may be. When
issued, the Representative’s Purchase Option, the Representative’s Rights, the Representative's Warrants and the
Rights included within the Private Units (the “
Private Rights
”), the Private Warrants and the Warrants
included within the Private Units (the "Private Warrants") will constitute valid and binding obligations of the Company to
issue and sell, upon exercise thereof and payment of the respective exercise prices (as applicable) therefor, the number and
type of securities of the Company called for thereby in accordance with the terms thereof and such Representative’s
Purchase Option, Representative’s Rights, Representative's Warrants Private Rights, Private Warrants and the Rights
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 foreign, 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
Ordinary Shares issuable upon (i) exercise of the Representative’s Purchase Option, the Representative’s Warrants, the
Private Warrants, and the Warrants have been reserved for issuance upon the exercise thereof upon payment of
the consideration therefore (in the case of the Representative’s Purchase Option and the Warrants), and (ii) pursuant to the
terms of the Representative’s Rights, Representative's Warrants Private Rights, Private Warrants and Rights, in each
case, and when issued in accordance with the terms thereof, will be duly and validly authorized, validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such
holders.
2.8.3.
No Integration
. Neither the Company nor any of its affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “
integrated
” pursuant to the Act or the Regulations
with the offer and sale of the Securities pursuant to the Registration Statement.
10
2.9.
Registration
Rights of Third Parties
. Except as set forth in the Registration Statement, the Statutory Prospectus and the Prospectus,
no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the
Company have the right to require the Company to register any such securities of the Company under the Act or to include any such
securities in a registration statement to be filed by the Company.
2.10.
Validity
and Binding Effect of Agreements
.
This Agreement, the Trust Agreement, the Subscription
Agreements (as defined in Section 2.24.2 hereof), the Representative’s Purchase Option, the Escrow Agreement and the Registration
Rights Agreement (as defined in Section 2.24.6, the Business Combination Marketing Agreement (as defined in Section 2.26 hereof),
the Rights Agreement (as defined in Section 2.27 hereof), the Warrant Agreement (as defined in Section 2.39 hereof) and the M&A Advisory Agreement (as defined in Section 2.28 hereof)
have been duly and validly authorized by the Company and, when executed and delivered by the Company and will constitute valid
and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights
generally; (ii) as enforceability of any indemnification or contribution provision may be limited under foreign, 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 Trust Agreement, the
Subscription Agreements, the Representative’s Purchase Option, the Escrow Agreement, the Registration Rights Agreement,
the Business Combination Marketing Agreement, the Rights Agreement, the Warrant Agreement and the M&A Advisory
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 or violation 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, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is subject except pursuant to the Trust Agreement; (ii) result
in any violation of the provisions of the Amended and Restated Memorandum and Articles of Association of the Company; or
(iii) violate any existing applicable statute, 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, business or assets.
11
2.12.
No
Defaults; Violations
. No material default or violation exists in the due performance and observance of any term,
covenant or condition of any license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any
other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to
which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company
is subject. The Company is not in violation of any term or provision of its Amended and Restated Memorandum and Articles of
Association of the Company or in violation of any material franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of
its properties or businesses.
2.13.
Corporate
Power; Licenses; Consents
.
2.13.1.
Conduct of Business. The Company has all requisite corporate power and authority, and has all necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs
as of the date hereof to conduct its business for the purposes described in the Registration Statement, the Statutory Prospectus
and the Prospectus. The disclosures in the Registration Statement, the Statutory Prospectus and the Prospectus concerning
the effects of foreign, federal, state and local regulation on this Offering and the Company’s business purpose as currently
contemplated are correct in all material respects and do not omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since
its formation, the Company has conducted no business and has incurred no liabilities other than in connection with its formation
and in furtherance of the Offering.
2.13.2.
Transactions Contemplated Herein
. The Company has all corporate power and authority to enter into this Agreement
and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection
therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or
other body, foreign or domestic, 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 Trust Agreement, the Subscription Agreements, the Representative’s
Purchase Option, the Escrow Agreement, the Registration Rights Agreement, the Business Combination Marketing Agreement, the Rights
Agreement, the Warrant Agreement and the M&A Advisory Agreement and as contemplated by the Registration Statement, the Statutory Prospectus and Prospectus,
except with respect to applicable foreign, federal and state securities laws and the rules and regulations promulgated by the Financial
Industry Regulatory Authority, Inc. (“
FINRA
”).
2.14.
D&O
Questionnaires
. To the Company’s knowledge, all information contained in the questionnaires (the
“
Questionnaires
”) completed by each of the Company’s officers, directors, 5% beneficial owners and
owners of unregistered securities acquired within the past 180 days (the “
Directors/Officers
”) immediately
prior to the initial filing of the Registration Statement and provided to the Representative, as such Questionnaires may have
been updated from time to time and confirmed by each of the Directors/Officers, as well as the biographies included in the
Registration Statement, is true and correct and the Company has not become aware of any information which would cause the
information disclosed in the Questionnaires to become inaccurate and incorrect.
12
2.15.
Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any of the Directors/Officers or any of the Insiders, which has not been disclosed in the Registration Statement, the
Questionnaires, the Statutory Prospectus and the Prospectus.
2.16.
Good
Standing
. The Company has been duly incorporated and is validly existing as a corporation and is in good standing under
the laws of its jurisdiction 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 condition (financial or otherwise), earnings, business
or properties of the Company, whether or not arising from transactions in the ordinary course of business, except as set forth
in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto) (a “
Material Adverse
Effect
”).
2.17.
No
Contemplation of a Business Combination
. Prior to the date hereof, no Company Affiliate (as hereinafter defined)
has, and as of the Closing, the Company and such Company Affiliates will not have: (a) had any specific Business Combination under
consideration or contemplation; (b) directly or indirectly, contacted any potential operating assets, business or businesses which
the Company may seek to acquire (each, a “
Target Business
”) or any owner, officer, director, manager, agent
or representative thereof or had any substantive discussions, formal or otherwise, with respect to effecting any potential Business
Combination with the Company or taken any measure, directly or indirectly to locate a Target Business; or (c) engaged or retained
any agent or other representative to identify or locate any Target Business for the Company.
2.18.
Transactions
Affecting Disclosure to FINRA.
2.18.1.
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 Company Affiliate with respect to the sale of the Securities hereunder or any other arrangements,
agreements or understandings of the Company or, to the Company’s knowledge, any Insider that may affect the Underwriters’
compensation, as determined by FINRA.
2.18.2.
The
Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a
finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital to the Company; (ii) to any FINRA member; or (iii) to any
person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months
prior to the Effective Date, other than payments to the Representative in connection with the Offering.
13
2.18.3.
To the Company’s knowledge, no officer or director or any direct or indirect beneficial owner of any class of the
Company’s securities, including the Insiders and holders of securities to be purchased in the Private Placement (whether
debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) (any such individual
or entity, a “
Company Affiliate
”) is a member, a person associated, or affiliated with a member of FINRA.
2.18.4.
Except as disclosed in writing to Representative’s counsel, to the Company’s knowledge, no Company Affiliate
is an owner of stock or other securities of any member of FINRA (other than securities purchased on the open market).
2.18.5.
Except as disclosed in writing to Representative’s counsel, to the Company’s knowledge, no Company Affiliate
has made a subordinated loan to any member of FINRA.
2.18.6.
No proceeds from the sale of the Public Securities (excluding underwriting compensation), the Representative’s Securities,
the Private Units, or the Insider Shares will be paid to any FINRA member, or any persons associated or affiliated with a member
of FINRA, except as specifically authorized herein.
2.18.7.
Except as contemplated herein with respect to the Representative, the Company has not issued any warrants or other securities,
or granted any options, directly or indirectly to anyone who is a potential underwriter in the Offering or a related person (as
defined by FINRA rules) of such an underwriter within the 180-day period prior to the initial filing date of the Registration Statement.
2.18.8.
Except as disclosed in writing to Representative’s counsel, to the Company’s knowledge no person to whom securities
of the Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement
has any relationship or affiliation or association with any member of FINRA.
2.18.9.
To the Company’s knowledge, no FINRA member intending to participate in the Offering has a conflict of interest (as
defined by FINRA rules) with the Company.
2.18.10.
Except
with respect to the Representative in connection with the Offering, the Company has not entered into any agreement or
arrangement (including, without limitation, any consulting agreement or any other type of agreement) during the 180-day
period prior to the initial filing date of the Registration Statement, which arrangement or agreement provides for the
receipt of any item of value and/or the transfer or issuance of any warrants, options, or other securities from the Company
to a FINRA member, any person associated with a member (as defined by FINRA rules), any potential underwriters in the
Offering and/or any related persons.
14
2.19.
Taxes.
2.19.1.
There are no transfer taxes or other similar fees or charges under Cayman Islands law, U.S. federal law or the laws of any
U.S. state or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement
or the issuance or sale by the Company of the Securities.
2.19.2.
The Company has filed all non-U.S., and U.S. federal, state, and local tax returns that are required to be a filed or has
requested extensions thereof, except in any case in which the failure to so file would not have a Material Adverse Effect, and
has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any
of the foregoing in due and payable, except for any such assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect.
2.19.3.
The Company is not a Passive Foreign Investment Company for Federal income tax purposes.
2.20.
Foreign
Corrupt Practices Ac
t. Neither the Company nor any of the Company Affiliates or any other person acting on behalf of
the Company is aware of or has taken any action, directly or indirectly, that: (i) would result in a violation by such persons
of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “
FCPA
”)
or otherwise subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (ii)
if not done in the past, might have had a Material Adverse Effect or (iii) if not continued in the future, might adversely affect
the assets, business or operations of the Company, including, without limitation, 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). 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.
2.21.
Currency
and Foreign Transactions Reporting Ac
t. The operations of the Company are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “
Money Laundering Laws
”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened.
15
2.22.
Bank
Secrecy Act; Money Laundering; Patriot Act
. Neither the Company, nor to the Company’s knowledge, any Company
Affiliate, has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Laws 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.
2.23.
Officers’
Certificate.
Any certificate signed by any duly authorized officer of the Company and delivered to the Representative
or to its counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.24.
Agreements
With Company Affiliates
.
2.24.1.
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 non-compete provision may be limited under foreign,
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) in the form annexed as an exhibit to the Registration Statement (the “
Insider Letters
”), pursuant
to which each of the Company Affiliates agrees to certain matters, including but not limited to, the voting of Ordinary
Shares held by them and certain matters described as being agreed to by them under the “
Proposed Business
” section of
the Registration Statement, the Statutory Prospectus and Prospectus.
2.24.2.
Subscription Agreements
. The Insiders and the Representative have executed and delivered subscription
agreements, the form of which is annexed as an exhibit to the Registration Statement (the “
Subscription Agreements
”),
pursuant to which such affiliate and the Representative have agreed, among other things, to purchase on the Closing Date an aggregate
of 265,000 and 45,000 Private Units, respectively, in the Private Placement. Pursuant to the Subscription Agreements,
each of the purchasers has waived any and all rights and claims they may have to any proceeds, and any interest thereon, held
in the Trust Account in respect of the Ordinary Shares included in the Private Units 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. The Private
Units and underlying securities have been duly authorized and, when issued and paid for in accordance with the Subscription Agreements,
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 Private Units and the Ordinary Shares and Private Rights and Private Warrants included in
the Private Units and the Ordinary Shares issuable with respect to the Private Rights and upon the exercise of the Private Warrants
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 of the Private Units
and underlying securities has been duly and validly taken.
16
2.24.3.
Escrow Agreement
. The Company has caused the Insiders to enter into an escrow agreement (the “
Escrow
Agreement
”) with CST&T substantially in the form filed as an exhibit to the Registration Statement whereby the Insider
Shares owned by such parties prior to the Offering will be held in escrow by CST&T. To the Company’s knowledge,
the Escrow Agreement is enforceable against each of the Insiders 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, an
agreement or instrument to which any of the Insiders is a party. The Escrow Agreement shall not be amended, modified
or otherwise changed without the prior written consent of the Representative, such consent not to be unreasonably withheld.
2.24.4.
Non-Competition/Solicitation
. No Directors/Officers are subject to any non-competition agreement or non-solicitation
agreement with any employer or prior employer which could materially affect each Director’s/Officer’s ability to be
and act in the capacity of a Director/Officer of the Company.
2.24.5.
Advances
. B. Luke Weil has made advances to the Company in the aggregate amount of $[●] (the “
Insider
Advances
”). The Insider Advances do not bear any interest and are repayable by the Company on the consummation
of the Offering.
2.24.6.
Registration Rights Agreement
. The Company, the Insiders and the Representative have entered into a registration
rights agreement (the “
Registration Rights Agreement
”) substantially in the form annexed as an exhibit to the
Registration Statement, whereby such parties will be entitled to certain registration rights with respect to, among other securities,
the Insider Shares and the Private Units (and underlying securities) as set forth in such Registration Rights Agreement and described
more fully in the Registration Statement.
2.25.
Investment
Management Trust Agreement.
The Company has entered into the Trust Agreement with respect to certain proceeds of the
Offering and the Private Placement substantially in the form filed as an exhibit to the Registration Statement, pursuant to which
the funds held in the Trust Account may be released under limited circumstances.
2.26.
Business
Combination Marketing Agreement
. The Company and the Representative have entered into a separate agreement substantially in
the form filed as an exhibit to the Registration Statement (the “
Business Combination Marketing Agreement
”).
17
2.27.
Rights
Agreement
. The Company has entered into a rights agreement with respect to the Rights that are to be issued in the Offering,
the Private Rights and the Representative’s Rights with CST&T substantially in the form filed as an exhibit to the Registration
Statement (the
“Rights Agreement”
).
2.28.
M&A
Advisory Agreement
. The Company and B. Riley & Co. LLC have entered into a separate agreement substantially in the form
filed as Exhibit to the Registration Statement (the “M&A Advisory Agreement”).
2.29.
Investments
.
No more than 45% of the “value” (as defined in Section 2(a)(41) of the Investment Company Act of 1940 (“
Investment
Company Act
”)) of the Company’s total assets (exclusive of cash items and “
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 Government Securities.
2.30.
Investment
Company Act
. The Company is not required, and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as an “investment
company” under the Investment Company Act.
2.31.
Subsidiaries
.
The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other
business entity.
2.32.
Related
Party Transactions
. No relationship, direct or indirect, exists between or among any of the Company or any Company Affiliate,
on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Company Affiliate, on the other
hand, which is required by the Act, the Exchange Act or the Regulations to be described in the Registration Statement, the Statutory
Prospectus and the Prospectus which is not so described as required. There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business which do not violate SOX (as defined in Section 2.34 below))
or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of
their respective family members, except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus. The
Company has not extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any director or officer of the Company.
2.33.
No
Influence
. The Company has not offered, or caused the Underwriters to offer, the Firm Units to any person or entity
with the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter
the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication
to write or publish favorable information about the Company or any such affiliate.
18
2.34.
Sarbanes-Oxley
. The
Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“
SOX
”),
and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any governmental
or self regulatory entity or agency, that are applicable to it as of the date hereof.
2.35.
Listing
of the Public Securities on the Nasdaq Stock Market
. The Public Securities have been authorized for listing on the
Nasdaq Stock Market and, to the Company’s knowledge, no proceedings have been instituted or threatened which would effect,
and no event or circumstance has occurred since the Effective Date that is reasonably likely lead to proceedings to effect, the
delisting of the Public Securities from the Nasdaq Stock Market. As of the Effective Date, the Company met all applicable
requirements for listing on the Nasdaq Stock Market.
2.36.
Definition
of “Knowledge
”.
As used in herein, th
e term “
knowledge
of the Company
” (or similar language) shall mean the knowledge of the Company’s Directors/Officers, with the assumption
that such officers and directors shall have made reasonable and diligent inquiry of the matters presented.
2.37.
Emerging
Growth Status
. From the date of the Company’s formation through the date hereof, the Company has been and
is an “
emerging growth company
,” as defined in Section 2(a) of the Act (an “
Emerging Growth Company
”).
2.38.
Testing-The-Waters
Communications
. The Company (a) has not engaged in any Testing-the-Waters Communication and (b) has not authorized
anyone to engage in Testing-the-Waters Communications. “Testing-the-Waters Communication” means any oral or written
communication with potential investors undertaken in reliance on Section 5(d) of the Act.
2.39
Warrant
Agreement
. The Company has entered into a warrant agreement with respect to the Warrants, Representative’s Warrants
and Private Warrants with CST&T substantially in the form filed as an exhibit to the Registration Statement (the “Warrant
Agreement”).
3.
Covenants of the Company
. The Company covenants and agrees as follows:
3.1.
Amendments
to Registration Statemen
t. 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 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 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 Statutory Prospectus and 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 during such period to amend the Registration Statement or amend or
supplement the Statutory Prospectus and Prospectus to comply with the Act, the Company will notify the Representative
promptly and prepare and file with the Commission, subject to Section 3.1 hereof, an appropriate amendment to the
Registration Statement or amendment or supplement to the Statutory Prospectus and Prospectus (at the expense of the Company)
so as to correct such statement or omission or effect such compliance.
19
3.2.2.
Filing of Final Prospectus
. The Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424 of the Regulations.
3.2.3.
Exchange
Act Registration
. For a period of five years from the Effective Date (except in connection with a going private
transaction), or until such earlier time upon which the Trust Account is to be liquidated if a Business Combination has not
been consummated by the Termination Date, the Company will use its best efforts to maintain the registration of the Units,
Ordinary Shares, Rights and Warrants (in the case of the Units and the Warrants, until the Warrants expire and are no longer
exercisable or have been exercised in full) under the provisions of the Exchange Act. The Company will not deregister the
Units, Ordinary Shares, Rights or Warrants under the Exchange Act without the prior written consent of
the Representative.
3.2.4.
Free Writing Prospectuses
. The Company represents and agrees that it 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 under the 1933 Act, without the prior consent of the Representative. Any such free writing prospectus consented to by the Representative
is hereinafter referred to as a
“Permitted Free Writing Prospectus
.” The Company represents that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied
with and will comply with the applicable requirements of Rule 433 of the 1933 Act, including timely Commission filing where required,
legending and record keeping.
3.2.5.
Intentionally Omitted
.
3.2.6.
Sarbanes-Oxley Compliance
. As soon as it is legally required to do so, the Company shall take all actions
necessary to obtain and thereafter maintain material compliance with each applicable provision of SOX and the rules and regulations
promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or self regulatory entity
or agency with jurisdiction over the Company.
20
3.3.
Intentionally
Omitted
.
3.4.
Emerging
Growth Company Status
. The Company will promptly notify the Representative if the Company ceases to be an Emerging
Growth Company at any time prior to the earlier of five years after the consummation of the Company’s initial Business Combination,
or the liquidation of the Trust Account if a Business Combination is not consummated by the Termination Date.
3.5.
Delivery
of Materials to Underwriters
. The Company will deliver to each of the several Underwriters, without charge and from time
to time during the period when a prospectus is required to be delivered under the Act or the Exchange Act, such number of copies
of each Statutory Prospectus, the Prospectus and all amendments and supplements to such documents as such Underwriters may reasonably
request.
3.6.
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 foreign or state securities commission of any proceedings for the suspension of the qualification of the Public
Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus;
(v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of
any event during the period described in Section 3.4 hereof that, in the judgment of the Company or its counsel, makes any
statement of a material fact made in the Registration Statement, the Statutory Prospectus or the Prospectus untrue or that requires
the making of any changes in the Registration Statement, the Statutory Prospectus and Prospectus in order to make the statements
therein, (with respect to the Prospectus and the Statutory Prospectus and in light of the circumstances under which they were made),
not misleading. If the Commission or any foreign or 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.
3.7.
Review
of Financial Statements
. Until the earlier of five years following the Effective Date, or until the liquidation of the
Trust Account if a Business Combination is not consummated by the Termination Date, the Company, at its expense, shall cause its
regularly engaged independent certified public accountants to review (but not audit) the Company’s financial statements for
each of the first three fiscal quarters prior to the announcement of quarterly financial information and the filing of the Company’s
Quarterly Reports on Form 10-Q with respect to its quarterly results.
21
3.8.
Transactions.
3.8.1.
Business Combinations
. The Company will not consummate a Business Combination with any entity which is affiliated
with any Company Affiliate unless the Company obtains an opinion from an independent investment banking firm that the Business
Combination is fair to the Company’s shareholders from a financial point of view.
3.8.2.
Compensation
. The Company shall not pay any Insider or Company Affiliate or any of their affiliates any fees
or compensation from the Company, for services rendered to the Company prior to, or in connection with, this Offering or the consummation
of a Business Combination except as described in the Registration Statement.
3.9.
Secondary
Market Trading and Standard & Poor’s.
In the event that at any time any of the Public Securities are not
listed on a national securities exchange:
3.9.1.
the
Company will apply to be included in Standard & Poor’s Daily News and Corporation Records Corporate
Descriptions for a period of five years from the consummation of a Business Combination;
3.9.2.
the Company shall take such steps as may be necessary to obtain a secondary market trading exemption for the Company’s
securities in such jurisdictions as may be requested by the Representative; provided, however, no 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;
3.9.3.
the Company shall also take such other action as may be reasonably requested by the Representative to obtain a secondary
market trading exemption in such other states as may be requested by the Representative.
3.10.
Investor
Relations Firm
. Promptly after the execution of a definitive agreement for a Business Combination, the Company shall
retain an investor relations firm with the expertise necessary to assist the Company both before and after the consummation of
the Business Combination for a term to be agreed upon by the Company and the Representative.
3.11.
Reports
to the Representative
.
3.11.1.
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 and dissolved, the Company will furnish to the Representative and its counsel copies of such
financial statements and other periodic and special reports as the Company from time to time furnishes generally to
holders of any class of its securities, and promptly furnish to the Representative: (i) a copy of each periodic report the
Company shall be required to file with the Commission; (ii) a copy of every press release and every news item and
article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Current
Report on Form 8-K and Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five copies of each
registration statement filed by the Company with the Commission under the Securities Act; 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 that 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 EDGAR shall be deemed to have been delivered to the Representative pursuant to this section.
22
3.11.2.
For a period of five years following the Effective Date or until such earlier time upon which the Company is required to
be liquidated, the Company shall retain a transfer and warrant agent acceptable to the Representative. CST&T is
acceptable to the Underwriters.
3.11.3.
Secondary Market Trading Survey
. In the event that at any time any of the Public Securities are not listed
on a national securities exchange, the Company shall engage GM for a one-time fee of $5,000 to deliver to and update the Underwriters
on a timely basis, a written report detailing those states in which the Public Securities may be traded in non-issuer transactions
under the Blue Sky laws of the fifty States (the “
Secondary Market Trading Survey
”).
3.12.
Disqualification
of Form S-1 and Form S-3
. 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 Form S-3 (or other appropriate form) for the registration of the Warrants under the Act.
3.13.
Payment
of Expenses
. 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 fees and 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 Statutory Prospectus, and the final Prospectus
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 Ordinary Shares, the Rights and the Warrants included in the Units,
including any transfer or other taxes payable thereon; (iii) filing fees, costs and expenses (including fees
and disbursements of the Representative’s counsel up to $15,000) incurred in registering the Offering with FINRA; (iv)
fees and disbursements of the transfer and warrant agent; (v) the preparation and delivery of transaction
“bibles” and lucite cubes or similar commemorative items in a style and quantity as reasonably requested by the
Representative (which expenses for such transaction “bibles” and commemorative items shall not exceed $3,000);
(vi) all costs and expenses of the Company associated with “road show” marketing and “due diligence”
trips for the Company’s management to meet with prospective investors, including without limitation, all travel, food
and lodging expenses associated with such trips incurred by the Company or such management; (vii) background checks obtained
by the Representative for each of the Company’s directors and officers, and (viii) all other costs and expenses
customarily borne by an issuer incident to the performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 3.13. The Representative may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date the expenses set forth above (which shall be mutually agreed upon between the
Company and the Representative prior to Closing) to be paid by the Company to the Representative and others. If
the Offering is not consummated for any reason whatsoever, then the Company shall reimburse the Representative in full for
their respective out of pocket accountable expenses actually incurred through such date, including, without limitation, fees
of counsel to the Representative (which legal fees shall not exceed $100,000).
23
3.14.
Application
of Net Proceeds
. The Company will apply the net proceeds from this Offering received by it in a manner substantially
consistent with the application described under the caption “Use of Proceeds” in the Prospectus.
3.15.
Delivery
of Earnings Statements to Security Holders.
The Company will make generally available to its security holders as soon
as practicable, but not later than the first day of the fifteenth full calendar month following the Effective Date, an earnings
statement (which need not be certified by independent public or independent certified public accountants unless required by the
Act or the Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a period
of at least twelve consecutive months beginning after the Effective Date.
3.16.
Notice
to FINRA
.
3.16.1.
Business Combination
. For a period of ninety days following the Effective Date, 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 Business Combination
candidate or to provide any similar Business Combination-related services, the Company will provide the following information (the
“
Business Combination Information
”) to the Representative: (i) complete details of all services and
copies of agreements governing such services (which details or agreements may be appropriately redacted to account for privilege
or confidentiality concerns); and (ii) justification as to why the person or entity providing the Business Combination-related
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 5110 of FINRA’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
shareholder approval for the Business Combination. Upon the Company’s delivery of the Business Combination Information
to the Representative, the Company hereby expressly authorizes the Representative to provide such information directly to FINRA
as a result of representations the Representative have made to FINRA in connection with the Offering.
3.16.2.
Broker/Dealer
. In the event the Company intends to register as a broker/dealer, merge with or acquire
a registered broker/dealer, or otherwise become a member of FINRA, it shall promptly notify FINRA.
3.17.
Stabilization
. Neither
the Company, nor, to its knowledge, any of its employees, officers, directors or shareholders (without the consent of the
Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Units.
24
3.18.
Internal
Controls
. From and after the Closing Date, 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.
3.19.
Accountants
.
For a period of five years from the Effective Date or until such earlier time upon which the Trust Account is required to be liquidated,
the Company shall retain Marcum or other independent public accountants reasonably acceptable to the Representative.
3.20.
Form
8-Ks
. The Company has retained Marcum to audit the financial statements of the Company as of the Closing Date (the “
Audited
Financial Statements
”) reflecting the receipt by the Company of the proceeds of the Offering and the Private Placement.
Within four (4) Business Days of the Closing Date, the Company shall file a Current Report on Form 8-K with the Commission, which
Report shall contain the Company’s Audited Financial Statements. If the Over-Allotment Option has not been exercised
on the Effective Date, the Company will also file an amendment to the Current Report on Form 8-K, or a new Current Report on Form
8-K, to provide updated financial information of the Company to reflect the exercise and consummation of the Over-Allotment Option.
3.21.
FINRA
.
The Company shall advise the Representative and FINRA if it is aware that any 5% or greater shareholder of the Company becomes
an affiliate or associated person of a FINRA member participating in the distribution of the Securities.
3.22.
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.
3.23.
Investment
Company
. The Company shall cause the proceeds of the Offering to be held in the Trust Account to be invested only as set
forth in the Trust Agreement and disclosed in the Prospectus. The Company will otherwise conduct its business in a manner so
that it will not become subject to the Investment Company Act. Furthermore, once the Company consummates a Business
Combination, it will be engaged in a business other than that of investing, reinvesting, owning, holding or trading
securities.
25
3.24.
Press
Releases
. The Company agrees that it will not issue press releases or engage in any other publicity, without the
Representative’s prior written consent (not to be unreasonably withheld), for a period of ninety (90) days after the Closing
Date; provided that in no event shall the Company be prohibited from issuing any press release or engaging in any other publicity
required by law.
3.25.
Electronic
Prospectus
. The Company shall cause to be prepared and delivered to the Representative, at its expense, promptly,
but in no event later than two (2) Business Days from the effective date of this Agreement, an Electronic Prospectus to be used
by the Underwriters in connection with the Offering. As used herein, the term “
Electronic Prospectus
”
means a form of prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall
be encoded in an electronic format, satisfactory to the Representative, that may be transmitted electronically by the other Underwriters
to offerees and purchasers of the Units for at least the period during which a Prospectus relating to the Units is required to
be delivered under the Securities Act; (ii) it shall disclose the same information as the paper prospectus and prospectus filed
pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format,
satisfactory to the Representative, that will allow recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and
for on-line time). The Company hereby confirms that it has included or will include in the Prospectus filed pursuant
to EDGAR or otherwise with the Commission and in the Registration Statement at the time it was declared effective an undertaking
that, upon receipt of a request by an investor or his or her representative within the period when a prospectus relating to the
Units is required to be delivered under the Securities Act, the Company shall transmit or cause to be transmitted promptly, without
charge, a paper copy of the Prospectus.
3.26.
Reservation
of Shares
. The Company will reserve and keep available that maximum number of its authorized but unissued
securities which are issuable upon exercise of the Warrants, the Private Warrants, the Representative’s Warrants and
Representative’s Purchase Option and underlying the Rights, the Private Rights and the Representative’s Rights
outstanding from time to time.
3.27.
Warrants
held by Insiders
. The Company hereby acknowledges and agrees that the Private Warrants and any Warrants issued to any Insider
or Company Affiliate upon conversion of promissory notes issued for working capital loans previously made to the Company, shall
be exercisable on a cashless basis and shall not be redeemable by the Company, in each event so long as such warrants are held
by the initial holders or their affiliates or permitted transferees.
3.28.
Future
Financings
. The Company agrees that neither it, nor any successor or subsidiary of the Company, will consummate
any public or private equity or debt financing prior to or in connection with the consummation of a Business Combination, unless
all investors in such financing expressly waive, in writing, any rights in or claims against the Trust Account.
26
3.29.
Listing
on a National Securities Exchange
. The Company will use its best efforts to maintain the listing of the Public Securities
on a national securities exchange until the earlier of the consummation of a Business Combination or until the Company’s
securities are no longer registered under the Exchange Act.
3.30.
Business
Combination Announcement
. Within five 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 and the Company’s
investment banker on the Business Combination. 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.
3.31.
Private Placement Proceeds
. On the Closing Date, the Company shall cause to be deposited $3,100,000 of proceeds
from the Private Placement into the Trust Account. On the Option Closing Date, if any, the Company shall cause to be deposited
an amount of additional proceeds from the additional Private Units sold on the Option Closing Date into the Trust Account such
that the amount of funds in the Trust Account shall be $10.15 per Public Share sold in the Offering.
3.32.
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.
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 the Closing Date 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 5:00 p.m., New
York time, on the date of this Agreement or such later date and time as shall be consented to in writing by the
Representative, and, at the 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 Representative’s counsel.
27
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 Commission Stop Order
. At the Closing Date, the Commission has not issued any order or threatened to
issue any order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or any part thereof, and has not
instituted or, to the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
4.1.4.
No Stop Orders
. No order suspending the sale of the Units in any jurisdiction shall have been issued on the
Closing Date, and no proceedings for that purpose shall have been instituted or shall be contemplated.
4.1.5.
Nasdaq Stock Market Listing
. The Public Securities shall have been approved for listing on the Nasdaq
Stock Market.
4.2.
Company
Counsel Matters
.
4.2.1.
Closing Date Opinion of Counsel
. On the Closing Date, the Representative shall have received the favorable
opinion of each of Graubard Miller, U.S. counsel to the Company, and Maples and Calder, Cayman Islands counsel to the Company,
each dated as of the Closing Date, addressed to the Representative as representative for the several Underwriters and in form mutually
acceptable to the Company and the Representative.
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
the Representative) of other counsel reasonably acceptable to the 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 jurisdiction 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 opinions 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 the Closing Date, the Representative shall have
received a letter, addressed to the Representative as representative for the several Underwriters 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 the Representative and to Representative’s counsel from Marcum dated, respectively, as of the date of
this Agreement and as of the Closing Date:
28
(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 Registration Statement,
the Statutory Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g)
of the Exchange Act;
(ii)
Stating that in their opinion the financial statements of the Company included in the Registration Statement and the 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 a limited review which included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest available unaudited interim financial statements), a reading
of the latest available minutes of the shareholders 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 Statutory Prospectus and the 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 Statutory Prospectus and the Prospectus;
or (b) at a date not later than two (2) days prior to the Effective Date or Closing Date, as the case may be, there was any change
in the share capital or long-term debt of the Company, or any decrease in the shareholders’ equity of the Company as compared
with amounts shown in the August 21, 2015 balance sheet included in the Registration Statement, the Statutory Prospectus and the
Prospectus, other than as set forth in or contemplated by the Registration Statement, the Statutory Prospectus and the Prospectus,
or, if there was any decrease, setting forth the amount of such decrease, and (c) during the period from August 21, 2015 to a
specified date not later than two (2) days prior to the Effective Date or Closing Date, as the case may be, there was any decrease
in revenues, net earnings or net earnings per Ordinary Share, in each case, as compared with the Statement of Operations for the
period from July 1, 2015 (Inception) to August 21, 2015 included in the Registration Statement and the Prospectus, or, if there
was any such decrease, setting forth the amount of such decrease;
(iv)
Setting forth, at a date not later than two days prior to the Effective Date, the amount of liabilities of the Company;
(v)
Stating that they have compared specific dollar amounts, numbers of shares, percentages of revenues and earnings,
statements and other financial information pertaining to the Company set forth in the Registration Statement, the Statutory
Prospectus and the Prospectus in each case to the extent that such amounts, numbers, percentages, statements and information
may be derived from the general accounting records, including work sheets, of the Company and excluding any questions
requiring an interpretation by legal counsel, with the results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be in agreement;
(vi)
Stating that they have not during the immediately preceding five year period brought to the attention of the Company’s
management any reportable condition related to internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters Noted in an Audit,” in the Company’s
internal controls; and
(vii)
Statements as to such other matters incident to the transaction contemplated hereby as the Representative may reasonably
request.
4.4.
Officers’
Certificates.
4.4.1.
Officers’ Certificate
. As of 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 a Chief Executive Officer and the Secretary or Assistant Secretary
of the Company (in their capacities as such), 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
and that the conditions set forth in Section 4.5 hereof have been satisfied as of such date and that, as of Closing Date,
the representations and warranties of the Company set forth in Section 2 hereof are true and correct. In addition, the
Representative will have received such other and further certificates of officers of the Company as the Representative may reasonably
request.
4.4.2.
Secretary’s Certificate
. As of each of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or Assistant Secretary of the Company, respectively, certifying:
(i) that the Amended and Restated Memorandum and Articles of Association of the Company are true and complete, have not been modified
and are in full force and effect; (ii) that the resolutions relating to the Offering are in full force and effect and have not
been modified; (iii) all correspondence between the Company or its counsel and the Commission; (iv) all correspondence between
the Company and its counsel and the Nasdaq Stock Market; 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 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 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 Statutory 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 Company Affiliate before or by any court or foreign, 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 Statutory Prospectus and Prospectus; (iii) no stop order shall have been issued under the Act
against the Company and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the
Registration Statement, the Statutory 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 none of the Registration Statement,
the Statutory Prospectus or the Prospectus, or 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 the case of the Statutory Prospectus and Prospectus, in light of the circumstances under which they were made), not
misleading.
29
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 Subscription Agreements, the Registration Rights Agreement, the Business
Combination Marketing Agreement, the Rights Agreement, the Warrant 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 the
Representative’s Purchase Option.
4.7.
Private
Units
. On the Closing Date, the Insiders and the Representative shall have purchased the Private Units and the purchase price
for such Private Units shall be deposited into the Trust Account.
5.
Indemnification.
5.1.
Indemnification
of Underwriters
.
30
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 the Representative that participates in the offer and sale of the Units (each a “
Selected
Dealer
”) and each of their respective directors, officers and employees and each person, if any, who controls any
such Underwriter or Selected Dealer (“
Controlling Person
”) within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, and its counsel, 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 foreign,
federal, state or local statute, law, rule, regulation or ordinance or at common law or otherwise or under the laws, rules
and regulation of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in (i) any Preliminary Prospectus, the Registration Statement, or the Prospectus (as from time to
time each may be amended and supplemented); (ii) in any post-effective amendment or amendments or any new registration
statement and prospectus relating to any the securities of the Company described herein; or (iii) any application or other
document or written communication (in this Section 5 collectively called “
application
”) executed by
the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public
Securities and the Representative’s Registrable Securities under the securities laws thereof or filed with the
Commission, any foreign or state securities commission or agency, NASDAQ, the NYSE MKT, the OTC Bulletin Board or any
securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon and in conformity with written information furnished to the
Company with respect to an Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus,
the Registration Statement the Prospectus or any amendment or supplement thereof, or in any application, as the case may be,
which furnished written information, it is expressly agreed, consists solely of the information described in the last
sentence of Section 2.3.1. With respect to any 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 Preliminary Prospectus, the Registration
Statement or the Prospectus.
5.1.2.
Procedure
.
If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the
Company pursuant to Section 5.1.1, such Underwriter 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) and payment of actual expenses. Such Underwriter 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 or such 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; (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 and/or controlling person shall be borne by the
Company. Notwithstanding anything to the contrary contained herein, if the Underwriter 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.
31
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, and its counsel, 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 the Registration Statement, any Preliminary Prospectus, the 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 Registration Statement,
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or in any such application, which furnished written
information, it is expressly agreed, consists solely of the information described in the last sentence of Section 2.3.1.
In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement, the 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 but is unavailable, then, and in each such case, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided,
that, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 5.3.1, no Underwriter shall be required to contribute any amount in excess of the amount by
which the total price at which the Public Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, 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.
32
5.3.2.
Contribution Procedure
. Within fifteen days after receipt by any party to this Agreement (or its representatives)
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 representatives 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. If any Underwriter or Underwriters shall default in its or their obligations to purchase
the Firm Units and if the number of the Firm Units with respect to which such default relates does not exceed in the aggregate
10% of the number of Firm Units that all Underwriters have agreed to purchase hereunder, then such Firm 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
. In the event that the default addressed in Section 6.1 above relates to more than 10%
of the Firm Units, the Representative may, in its discretion, arrange for the Representative or for another party or parties
to purchase such Firm Units to which such default relates on the terms contained herein. If within one (1) Business Day
after such default relating to more than 10% of the Firm Units the Representative do not arrange for the purchase of such
Firm Units, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another
party or parties satisfactory to the Representative to purchase said Firm Units on such terms. In the event that
neither the Representative nor the Company arrange for the purchase of the Firm Units to which a default relates as provided
in this Section 6, this Agreement may be terminated by the Representative or the Company without liability on the part
of the Company (except as provided in Sections 3.12 and 5 hereof) or the several Underwriters (except as provided in
Section 5 hereof);
provided
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.
33
6.3.
Postponement
of Closing Date.
In the event that the Firm 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, the Representative or the Company shall have the
right to postpone the 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 and/or the Prospectus, as the case may be,
or in any other documents and arrangements, and the Company agrees to file promptly any amendment to, or to supplement, the Registration
Statement and/or the Prospectus, as the case may be, that in the opinion of counsel for the Underwriters may thereby be made necessary. The
term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6 with like
effect as if it had originally been a party to this Agreement with respect to such Securities.
7.
Additional Covenants
.
7.1.
Additional
Shares or Options
. The Company hereby agrees that until the Company consummates a Business Combination, it shall not
issue any Ordinary Shares or any options or other securities convertible into Ordinary Shares or any preferred shares which participate
in any manner in the Trust Account or which vote as a class with the Ordinary Shares on a Business Combination.
7.2.
Trust
Account Waiver Acknowledgments
. The Company hereby agrees that it will use its best efforts, prior to commencing
its due diligence investigation of any Target Business or obtain the services of any vendor, to obtain the acknowledgment
of such Target Business or vendor 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 $40,600,000 for
the benefit of the Public Shareholders and that, except for 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 Shareholders in the event of the conversion of their
shares or in connection with the Company’s liquidation in the event the Company is unable to consummate a Business Combination
within the required time period 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
Exhibit A
and
Exhibit B
, respectively.
34
7.3.
Insider
Letters
. 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 Company Affiliate and the Representative and will not allow any amendments to, or waivers of, such
Insider Letters without the prior written consent of the Representative.
7.4.
Amended
and Restated Memorandum and Articles of Association
. The Company shall not take any action or omit to take any action
that would cause the Company to be in breach or violation of its Amended and Restated Memorandum and Articles of Association.
7.5.
Tender
Offer, Proxy and Other Information
. The Company shall provide the Representative with copies of all proxy or tender offer
documentation and other information and all related material sent to Public Shareholders in connection with a Business Combination.
In addition, the Company shall furnish any other state in which the Offering was registered, such information as may be requested
by such state.
7.6.
Acquisition/Liquidation
of Trust Account Procedure
. The Company agrees that it will comply with its Amended and Restated Memorandum and Articles of
Association in connection with the consummation of a Business Combination or the failure to consummate a Business Combination within
18 or 21 months from the Closing Date (such date being referred to as the “Termination Date”).
7.7.
Rule
419
. The Company agrees that it will use its best efforts to prevent the Company from becoming subject to Rule 419
under the Act prior to the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent
any of the Company’s outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a-51-1
under the Exchange Act during such period.
7.8.
Presentation
of Potential Target Businesses
. The Company shall cause each of the Company Affiliates to agree that, in order to minimize
potential conflicts of interest which may arise from multiple affiliations, the Company Affiliates will present to the Company
for its consideration, prior to presentation to any other person or company, any suitable opportunity to acquire an operating business,
until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Trust Account, subject
to any pre-existing fiduciary obligations the Company Affiliates might have.
35
7.9.
Target
Net Assets
. The Company agrees that the Target Business that it acquires must have a fair market value equal
to at least 80% of the balance in the Trust Account at the time of signing the definitive agreement for the Business
Combination with such Target Business. 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,
cash flow and book value. If the Board of Directors of the Company is not able to independently determine that the
target business meets such fair market value requirement, the Company will obtain an opinion from an unaffiliated,
independent investment banking firm, or another independent entity that commonly renders valuation opinions on the type of
Target Business the Company is seeking to acquire. The Company is not required to obtain such an opinion 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.
Representations and Agreements to Survive Delivery
. Except as the context otherwise requires, all representations,
warranties and agreements contained in this Agreement shall be deemed to be representations, warranties and agreements at the Closing
Date or Option Closing Date, as applicable, and such representations, warranties and agreements of the Underwriters and Company,
including the indemnity agreements contained in Section 5 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter, the Company or any controlling person, and shall survive termination
of this Agreement or the issuance and delivery of the Securities to the several Underwriters until the earlier of the expiration
of any applicable statute of limitations and the seventh (7th) anniversary of the Closing Date, at which time the representations,
warranties and agreements shall terminate and be of no further force and effect.
9.
Effective Date of This Agreement and Termination Thereof.
9.1.
Effective
Date
. This Agreement shall become effective on the Effective Date at the time the Registration Statement is declared
effective by the Commission.
9.2.
Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date: (i) if any
domestic or international event or act or occurrence has materially disrupted or, in the Representative’s sole 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 NYSE MKT, NASDAQ or on the 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 OTC Bulletin Board or by order
of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become
involved in a war or an increase in existing 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 the Representative’s sole opinion, make it inadvisable to proceed with the delivery
of the Units, or (vii) if any of the Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof of a Material Adverse Effect on 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 sole judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by the Underwriters for the sale of the Units.
36
9.3.
Expenses.
In the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the obligations of the Company to pay the out of pocket expenses related to the transactions
contemplated herein shall be governed by Section 3.12 hereof.
9.4.
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.
10.
Miscellaneous.
10.1.
Notices
.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed, delivered
by hand or reputable overnight courier, delivered by facsimile transmission (with printed confirmation of receipt) and confirmed,
or by electronic transmission via PDF and shall be deemed given when so mailed, delivered, or faxed or transmitted (or if mailed,
five days after such mailing):
If
to the Representative:
EarlyBirdCapital, Inc.
366 Madison Avenue, 8
th
Floor
New York, NY 10017
Fax No.: 212-661-4936
Attn: Steven Levine
Email: slevine@ebcap.com
With
a copy (which shall not constitute notice) to:
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Fax No.: 212-885-5001
Attn: Robert J. Mittman, Esq.
Email: rmittman@blankrome.com
37
If
to the Company, to:
Andina Acquisition Corp. II
250 West 57
th
Street – Suite 2223
New York, New York 10107
Fax No.: [ ● ]
Attn: Mr. Julio A. Torres, Chief Executive Officer
Email: [ ● ]
With
a copy (which shall not constitute notice) to:
Graubard Miller
405 Lexington Avenue
New York, New York 10174
Fax No.: (212) 818-8881
Attn: David Alan Miller, Esq.
Email: dmiller@graubard.com
10.2.
Headings
.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
10.3.
Amendment
.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
10.4.
Entire
Agreement
. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof,
and supersede all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
10.5.
Binding
Effect
. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters,
the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provisions herein contained.
10.6.
Governing
Law, Venue, etc.
38
10.6.1.
Governing
Law;
Venue. In connection with Section 5-1401 of the General Obligations Law of the State of New York, this Agreement
shall be governed by, and construed in accordance with,
the
laws of the State of New
York without regard to principles of conflicts of law that would result in the application of the substantive law of
another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating in
any way to this Agreement shall be resolved through final and biding arbitration in accordance with the International
Arbitration Rules of the American Arbitration Association (“
AAA
”). The arbitration shall be
brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York, will be
conducted in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and
that the arbitrator panel’s decision shall be final and enforceable by any court having jurisdiction over the party
from whom enforcement is sought. The cost of such arbitrators and arbitration services, together with the
prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed by the
arbitrators. The Company hereby appoints, without power of revocation, Graubard Miller 405 Lexington Avenue New
York, New York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller, Esq., as their respective agent to accept and
acknowledge on its behalf service of any and all process which may be served in any arbitration, action, proceeding or
counterclaim in any way relating to or arising out of this Agreement. The Company further agrees to take any and
all action as may be necessary to maintain such designation and appointment of such agent in full force and effect for a
period of seven years from the date of the Effective Date.
10.6.2.
Waiver of Right to Jury Trial
. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF
OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE
PROSPECTUS.
10.6.3.
Prevailing Parties
. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
10.7.
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 by fax or email/.pdf transmission
shall constitute valid and sufficient delivery thereof.
10.8.
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.
39
10.9.
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, shareholders, 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
]
40
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,
ANDINA ACQUISITION CORP. II
By:______________________________________
Name:
Title:
Agreed to and accepted
as of the date
first written above:
EARLYBIRDCAPITAL,
INC.
, as Representative of the several Underwriters
By:________________________________________________
Name:
Title:
[Signature Page
to Underwriting Agreement, dated [ ● ], 2015]
41
SCHEDULE A
ANDINA ACQUISITION
CORP. II
4,000,000 Units
|
Underwriter
|
Number of Firm Units
to be Purchased
|
|
EarlyBirdCapital, Inc.
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
4,000,000
|
42
EXHIBIT A
Form of Target Business
Letter
Andina Acquisition Corp. II
250 West 57
th
Street – Suite 2223
New York, New York 10107
Attn: Mr. Julio A. Torres, Chief Executive Officer
Gentlemen:
Reference
is made to the Final Prospectus of Andina Acquisition Corp. II (the “
Company
”), dated ______ __, 2015 (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 $40,600,000
for the benefit of the Public Shareholders and that, except for the interest earned on the amounts held in the Trust Account,
the Company may disburse monies from the Trust Account only: (i) to the holders of IPO Shares in the event of the conversion of
their shares or the dissolution and liquidation of the Trust Account; or (ii) to the Company concurrently with or 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 for any reason
whatsoever.
|
|
|
|
|
Print Name of Target Business
|
|
|
|
|
|
|
|
|
Authorized Signature of Target Business
|
43
EXHIBIT B
Form of Vendor Letter
Andina Acquisition Corp. II
250 West 57
th
Street – Suite 2223
New York, New York 10107
Attn: Mr. Julio A. Torres, Chief Executive Officer
Gentlemen:
Reference is made
to the Final Prospectus of Andina Acquisition Corp. II (the “
Company
”), dated _________ __, 2015 (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 $40,600,000
for the benefit of the Public Shareholders and that, except for the interest earned on the amounts held in the Trust Account,
the Company may disburse monies from the Trust Account only: (i) to the holders of IPO Shares in the event of the conversion of
their shares or the dissolution and liquidation of the Trust Account; or (ii) to the Company concurrently with or 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.
|
|
|
|
|
Print Name of Vendor
|
|
|
|
|
|
Authorized Signature of Vendor
|
EARLYBIRDCAPITAL, INC.
366 Madison Avenue, 8
th
Floor
New York, New York 10017
[ ● ]
,
2015
Andina Acquisition Corp. II
250 West 57
th
Street, Suite 2223
New York, New York 10107
Attention: Julio A. Torres, Chief Executive Office
Dear Mr. Torres:
This is to confirm our agreement whereby
Andina Acquisition Corp. II, a Cayman Islands exempted company (“Company”), has requested EarlyBirdCapital, Inc. (the
“Advisor”) to assist it in connection with the Company consummating a merger, share exchange, asset acquisition, share
purchase, recapitalization, reorganization or other similar business combination (in each case, a “Business Combination”)
with one or more businesses or entities (each a “Target”) as described in the Company’s Registration Statement
on Form S-1 (File No. 333-207037) filed with the Securities and Exchange Commission (“Registration Statement”) in connection
with its initial public offering (“IPO”).
1.
Services and Fees
.
(a) If requested by the Company, the Advisor
will:
|
|
(i)
|
Hold meetings with Company shareholders to discuss the Business Combination and the Target’s attributes;
|
|
|
(ii)
|
Introduce the Company to potential investors to purchase the Company’s securities; and
|
|
|
(iii)
|
Assist the Company with any press releases and filings related to the Business Combination or the Target.
|
(b) As
compensation for the foregoing services, the Company will pay the Advisor a cash fee equal to 4% of the gross proceeds received
from the IPO (“Fee”). ; provided that up to 25% of the Fee may be allocated at the Company’s sole discretion
to one or more advisors that assist the Company in identifying and consummating an initial business combination. The Fee is due
and payable to the Advisor by wire transfer at the closing of the Business Combination (“Closing”). If a proposed
Business Combination is not consummated for any reason, no Fee shall be due or payable to the Advisor hereunder. The Fee shall
be exclusive of any finder’s fees which may become payable to the Advisor pursuant to any subsequent agreement between the
Advisor and the Company or the Target.
2.
Expenses
.
At the Closing, the Company shall reimburse
the Advisor for all reasonable costs and expenses incurred by the Advisor (including reasonable fees and disbursements of counsel)
in connection with the performance of its services hereunder; provided, however, all expenses in excess of $5,000 in the aggregate
shall be subject to the Company’s prior written approval, which approval shall not be unreasonably withheld.
3.
Company Cooperation
.
The Company will provide full cooperation
to the Advisor as may be necessary for the efficient performance by the Advisor of its obligations hereunder, including, but not
limited to, providing to the Advisor and its counsel, on a timely basis, all documents and information regarding the Company and
Target that the Advisor may reasonably request or that are otherwise relevant to the Advisor’s performance of its obligations
hereunder (collectively, the “Information”); making the Company’s management, auditors, suppliers, customers,
consultants and advisors available to the Advisor; and, using commercially reasonable efforts to provide the Advisor with reasonable
access to the management, auditors, suppliers, customers, consultants and advisors of Target. The Company will promptly notify
the Advisor of any change in facts or circumstances or new developments affecting the Company or Target or that might reasonably
be considered material to the Advisor’s engagement hereunder.
4.
Representations; Warranties and
Covenants.
The Company represents, warrants and covenants
to the Advisor that all Information it makes available to the Advisor by or on behalf of the Company in connection with the performance
of its obligations hereunder will not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make statements made, in light of the circumstances under which they were made, not misleading as of the date thereof
and as of the consummation of the Business Combination.
5.
Indemnity
.
The Company shall indemnify the Advisor
and its affiliates and directors, officers, employees, shareholders, representatives and agents in accordance with the indemnification
provisions set forth in Annex I hereto, all of which are incorporated herein by reference.
Notwithstanding the foregoing and Annex
1, the Advisor agrees, if there is no Closing, (i) that it does not have any right, title, interest or claim of any kind in or
to any monies in the Company’s trust account (“Trust Account”) established in connection with the IPO (each,
a “Claim”); (ii) to waive any Claim it may have in the future as a result of, or arising out of, any services provided
to the Company; and (iii) to not seek recourse against the Trust Account for any reason whatsoever.
6.
Use of Name and Reports
.
Without the Advisor’s prior written
consent, neither the Company nor any of its affiliates (nor any director, officer, manager, partner, member, employee or agent
thereof) shall quote or refer to (i) the Advisor’s name or (ii) any advice rendered by the Advisor to the Company or any
communication from the Advisor in connection with performance of their services hereunder, except as required by applicable federal
or state law, regulation or securities exchange rule.
7.
Status as Independent Contractor
.
The
Advisor shall perform its services as an independent contractor and not as an employee of the Company or affiliate thereof. It
is expressly understood and agreed to by the parties that the Advisor shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be expressly agreed to by the Company in writing. In rendering such
services, the Advisor will be acting solely pursuant to a contractual relationship on an arm’
s-length basis. This
Agreement is not intended to create a fiduciary relationship between the parties and neither the Advisor nor any of the Advisor’s
officers, directors or personnel will owe any fiduciary duty to the Company or any other person in connection with any of the matters
contemplated by this Agreement.
8.
Potential Conflicts
.
The Company acknowledges that the Advisor
is a full-service securities firm engaged in securities trading and brokerage activities and providing investment banking and advisory
services from which conflicting interests may arise. In the ordinary course of business, the Advisor and its affiliates may at
any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of the Company, its affiliates or other entities that may be involved in the transactions
contemplated hereby. Nothing in this Agreement shall be construed to limit or restrict the Advisor or any of its affiliates in
conducting such business.
9.
Entire Agreement
.
This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written,
with respect thereto. This Agreement may not be modified or terminated orally or in any manner other than by an agreement in writing
signed by the parties hereto.
10.
Notices
.
Any notices required or permitted to be
given hereunder shall be in writing and shall be deemed given when mailed by certified mail or private courier service, return
receipt requested, addressed to each party at its respective addresses set forth above, or such other address as may be given by
a party in a notice given pursuant to this Section.
11.
Successors and Assigns
.
This Agreement may not be assigned by either
party without the written consent of the other. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and, except where prohibited, to their successors and assigns.
12.
Non-Exclusivity
.
Nothing herein shall be deemed to restrict
or prohibit the engagement by the Company of other consultants providing the same or similar services or the payment by the Company
of fees to such parties. The Company’s engagement of any other consultant(s) shall not affect the Advisor’s right to
receive fees and reimbursement of expenses pursuant to this Agreement.
13.
Applicable Law; Venue
.
This Agreement shall be construed and enforced
in accordance with the laws of the State of New York without giving effect to conflict of laws.
In the event of any dispute under this Agreement,
then and in such event, each party hereto agrees that the dispute shall either be (i) submitted to JAMS in New York County, New
York, for its decision and determination in accordance with Expedited Procedures of JAMS’ Comprehensive Arbitration Rules
and Procedures or (ii) brought and enforced in the courts of the State of New York, County of New York under the accelerated adjudication
procedures of the Commercial Division, or the United States District Court for the Southern District of New York, in each event
at the discretion of the party initiating the dispute. Once a party files a dispute (if arbitration, by sending JAMS a Demand for
Arbitration) with one of the above forums, the parties agree that all issues regarding such dispute or this Agreement must be resolved
before such forum rather than seeking to resolve it through another alternative forum set forth above.
In the event the dispute is brought before
JAMS, each of the parties agrees that the decision and/or award made by the arbitrators shall be final and enforceable by any court
having jurisdiction over the party from whom enforcement is sought. Furthermore, the parties to any such arbitration shall be entitled
to make one motion for summary judgment within 60 days of the commencement of the arbitration, which shall be decided by the arbitrator[s]
prior to the commencement of the hearings. If the amount in controversy in the arbitration exceeds $1.5 million, the arbitration
shall be heard by three arbitrators, unless the parties agree to one arbitrator.
In the event the dispute is brought by a
party in the courts of the State of New York or the United States District Court for the Southern District of New York, each party
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each party 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 a party
may be served by transmitting a copy thereof by registered or certified mail, postage prepaid, addressed to such party at the address
set forth at the beginning of this Agreement. Such mailing shall be deemed personal service and shall be legal and binding upon
the party being served in any action, proceeding or claim. The parties 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.
The Company hereby appoints, without power
of revocation, Graubard Miller 405 Lexington Avenue New York, New York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller, Esq.,
as their respective agent to accept and acknowledge on its behalf service of any and all process which may be served in any arbitration,
action, proceeding or counterclaim in any way relating to or arising out of this Agreement. The Company further agrees
to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force and effect
for a period of seven years from the date of this Agreement.
14.
Counterparts
.
This Agreement may be executed in several
original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
If the foregoing correctly sets forth the
understanding between the by Advisor and the Company with respect to the foregoing, please so indicate your agreement by signing
in the place provided below, at which time this letter shall become a binding contract.
|
|
|
|
|
|
EARLYBIRDCAPITAL, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
AGREED AND ACCEPTED BY:
|
|
|
|
|
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
Title:
|
|
[Signature Page to Business Combination
Marketing Agreement)
ANNEX I
Indemnification
In connection with the Company’s engagement
of EarlyBirdCapital, Inc. (the “Advisor”) pursuant to that certain letter agreement (“Agreement”) of which
this Annex forms a part, Andina Acquisition Corp. II (the “Company”) hereby agrees, subject to the second paragraph
of Section 4 of the Agreement, to indemnify and hold harmless the Advisor and its affiliates and its respective directors, officers,
shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against
any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by
any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively a “Claim”), that (A)
are related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements
omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with
the Company’s engagement of the Advisor, or (B) otherwise relate to or arise out of the Advisor’s activities on the Company’s behalf
under the Advisor’s engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable
fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any
such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified
Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted
from the gross negligence or willful misconduct of any person seeking indemnification for such Claim. The Company further agrees
that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of the Advisor
except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.
The Company further agrees that it will
not, without the prior written consent of the Advisor, settle, compromise or consent to the entry of any judgment in any pending
or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual
or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release
of each Indemnified Person from any and all liability arising out of such Claim.
Promptly upon receipt by an Indemnified
Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought
hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but
failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the
extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects or is
requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably
satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal
counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict
of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel
to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different
from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent
or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding
anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any
Claim, the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert
crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including
without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise
or settlement thereof.
In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his,
her or its own counsel therefor at his, her or its own expense.
The Company agrees that if any indemnity
sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not the Advisor
is an Indemnified Person), the Company and the Advisor shall contribute to the Claim for which such indemnity is held unavailable
in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the Advisor on the other,
in connection with the Advisor’s engagement referred to above, subject to the limitation that in no event shall the amount of the
Advisor’s contribution to such Claim exceed the amount of fees actually received by the Advisor from the Company pursuant to the
Advisor’s engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and the Advisor on
the other, with respect to the Advisor’s engagement shall be deemed to be in the same proportion as (a) the total value paid or
proposed to be paid or received by the Company or its shareholders as the case may be, pursuant to the transaction (whether or
not consummated) for which the Advisor is engaged to render services bears to (b) the fee paid or proposed to be paid to the Advisor
in connection with such engagement.
The Company’s indemnity, reimbursement and
contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect
any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the Company is at
fault in any way.
Exhibit 3.1
THE COMPANIES LAW (2013 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
ANDINA ACQUISITION CORP. II
(adopted by special resolution dated
[ ] 2015)
THE COMPANIES LAW (2013 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
ANDINA ACQUISITION CORP. II
(adopted by special resolution dated
[ ] 2015)
|
|
1
|
The name of the Company is Andina Acquisition Corp. II
|
|
|
2
|
The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide.
|
|
|
3
|
The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
|
|
|
4
|
The liability of each Member is limited to the amount unpaid on such Member's shares.
|
|
|
5
|
The share capital of the Company is US$10,100 divided into 100,000,000 shares of a par value of
US$0.0001 each and 1,000,000 preferred shares of a par value of US$0.0001 each.
|
|
|
6
|
The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.
|
|
|
7
|
Capitalised terms that are not defined in this Memorandum of Association bear the respective meanings
given to them in the Articles of Association of the Company.
|
THE COMPANIES LAW (2013 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
ANDINA ACQUISITION CORP. II
(adopted by special resolution dated
[ ] 2015)
|
|
1.1
|
In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith:
|
|
"
Articles
"
|
means these articles of association of the Company.
|
|
|
|
|
"
Audit Committee
"
|
means the audit committee of the Company formed pursuant to Article 41.2 hereof, or any successor audit committee
|
|
|
|
|
"
Auditor
"
|
means the person for the time being performing the duties of auditor of the Company (if any).
|
|
|
|
|
"
Business Combination
"
|
has the meaning given to it in Article 48.1.
|
|
|
|
|
"
business day
"
|
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City.
|
|
|
|
|
"
clearing house
"
|
a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
|
|
|
|
|
"
Company
"
|
means the above named company.
|
|
|
|
|
"
Designated Stock Exchange
"
|
means the Over-the-Counter Bulletin Board or any national securities exchange including the National Market System or the Capital Market of the Nasdaq Stock Market, Inc., the NYSE MKT LLC or the New York Stock Exchange.
|
|
"
Directors
"
|
means the directors for the time being of the Company.
|
|
|
|
|
"
Dividend
"
|
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles.
|
|
|
|
|
"
Electronic Record
"
|
has the same meaning as in the Electronic Transactions Law.
|
|
|
|
|
"
Electronic Transactions Law
"
|
means the Electronic Transactions Law (2003 Revision) of the Cayman Islands.
|
|
|
|
|
"
Founders
"
|
means all Members immediately prior to the consummation of the IPO.
|
|
|
|
|
"
IPO
"
|
means the Company's initial public offering of securities.
|
|
|
|
|
"
IPO Repurchase
"
|
has the meaning given to it in Article 48.3
|
|
|
|
|
"
Member
"
|
has the same meaning as in the Statute.
|
|
|
|
|
"
Memorandum
"
|
means the memorandum of association of the Company.
|
|
|
|
|
"
Ordinary Resolution
"
|
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
|
|
|
|
|
"
Over-allotment Option
"
|
means the option of the Underwriters to purchase up to an additional 600,000 units (as defined at Article 3.3) at a price equal to $10.00 per unit, less underwriting discounts and commissions.
|
|
|
|
|
"
Repurchase Price
"
|
has the meaning given to it in Article 48.3.
|
|
|
|
|
"
Register of Members
"
|
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
|
|
|
|
|
"
Registered Office
"
|
means the registered office for the time being of the Company.
|
|
|
|
|
"
Seal
"
|
means the common seal of the Company and includes every duplicate seal.
|
|
"
SEC
"
|
means the United States Securities and Exchange Commission.
|
|
|
|
|
"
Share
"
|
means a share in the Company and includes a fraction of a share in the Company.
|
|
|
|
|
"
Special Resolution
"
|
has the same meaning as in the Statute, and includes a unanimous written resolution.
|
|
|
|
|
"
Statute
"
|
means the Companies Law (2013 Revision) of the Cayman Islands.
|
|
|
|
|
"
Treasury Share
"
|
means a Share held in the name of the Company as a treasury share in accordance with the Statute.
|
|
|
|
|
"
Trust Fund
"
|
has the meaning given to it in Article 48.1.
|
|
|
|
|
"
Underwriters
"
|
means EarlyBirdCapital, Inc. on its own behalf and for other underwriters from time to time, and any successor underwriter.
|
|
|
(a)
|
words importing the singular number include the plural number and vice versa;
|
|
|
(b)
|
words importing the masculine gender include the feminine gender;
|
|
|
(c)
|
words importing persons include corporations as well as any other legal or natural person;
|
|
|
(d)
|
"written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record;
|
|
|
(e)
|
"shall" shall be construed as imperative and "may" shall be construed as permissive;
|
|
|
(f)
|
references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced;
|
|
|
(g)
|
any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
|
|
|
(h)
|
the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
|
|
|
(i)
|
headings are inserted for reference only and shall be ignored in construing the Articles;
|
|
|
(j)
|
any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record;
|
|
|
(k)
|
any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Law;
|
|
|
(l)
|
sections 8 and 19(3) of the Electronic Transactions Law shall not apply;
|
|
|
(m)
|
the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and
|
|
|
(n)
|
the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share.
|
|
|
2
|
Commencement of Business
|
|
|
2.1
|
The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit.
|
|
|
2.2
|
The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration.
|
|
|
3.1
|
Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and, where applicable, the rules of the Designated Stock Exchange and/or any competent regulatory
authority, and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over
or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions,
whether in regard to Dividend or other distribution, voting, return of capital or otherwise and to such persons, at such times
and on such other terms as they think proper, and may also (subject to the Statute and the Articles) vary such rights.
|
|
|
3.2
|
The Company may issue rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities
in the Company on such terms as the Directors may from time to time determine.
|
|
|
3.3
|
The Company may issue units of securities in the Company, which may be comprised of Shares, rights,
options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe
for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors may from time
to time determine. The securities comprising any such units which are issued pursuant to the IPO can only be traded separately
from one another 90 days after the date of the prospectus relating to the IPO unless the Underwriters determine that an earlier
date is acceptable. Prior to such date, the units can be traded, but the securities comprising such units cannot be traded separately
from one another.
|
|
|
3.4
|
The Company shall not issue Shares to bearer.
|
|
|
4.1
|
The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute.
|
|
|
4.2
|
The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time.
|
|
|
5
|
Closing Register of Members or Fixing Record Date
|
|
|
5.1
|
For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed
newspaper or any other newspaper or by any other means in accordance with the requirements of the Designated Stock Exchange, provide
that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days.
|
|
|
5.2
|
In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose.
|
|
|
5.3
|
If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof.
|
|
|
6
|
Certificates for Shares
|
|
|
6.1
|
A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and subject to the Articles and no new certificate shall be issued until the former certificate
representing a like number of relevant Shares shall have been surrendered and cancelled.
|
|
|
6.2
|
The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
|
|
|
6.3
|
If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence,
as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.
|
|
|
6.4
|
Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery.
|
|
|
6.5
|
Share certificates shall be issued within the relevant time limit as prescribed by the Statute,
if applicable, or as the Designated Stock Exchange may from time to time determine, whichever is shorter, after the allotment or,
except in the case of a Share transfer which the Company is for the time being entitled to refuse to register and does not register,
after lodgement of a Share transfer with the Company.
|
|
|
7.1
|
Subject to the terms of these Articles, any Member may transfer all or any of his Shares by an
instrument of transfer provided that such transfer complies with applicable rules of the SEC and federal securities laws of the
United States. If the Shares in question were issued in conjunction with rights, options or warrants issued pursuant to Article
3 on terms that one cannot be transferred without the other, the Directors shall refuse to register the transfer of any such Share
without evidence satisfactory to them of the like transfer of such option or warrant.
|
|
|
7.2
|
The instrument of transfer of any Share shall be in writing in the usual or common form or in a
form prescribed by the Designated Stock Exchange or in any other form approved by the Directors and shall be executed by or on
behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may be under hand or,
if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other
manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the holder of a Share
until the name of the transferee is entered in the Register of Members.
|
|
|
8
|
Redemption, Repurchase and Surrender of Shares
|
|
|
8.1
|
Subject to the provisions of the Statute, and, where applicable, the rules of the Designated Stock
Exchange and/or any competent regulatory authority, the Company may issue Shares that are to be redeemed or are liable to be redeemed
at the option of the Member or the Company. The redemption of such Shares, except Shares in the IPO, shall be effected in such
manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of the such Shares. With
respect to repurchasing shares of the Company:
|
|
|
(a)
|
members who hold Shares issued in the IPO are entitled to request repurchase of such Shares in
the circumstances described in Article 48.3; and
|
|
|
(b)
|
shares held by the Founders shall be compulsorily repurchased on a
pro rata
basis to the
extent that the Over-allotment Option is not exercised in full so that the Founders will own 20% of the Company's issued and outstanding
Shares after the IPO (exclusive of any securities purchased in a private placement simultaneously with the IPO).
|
|
|
8.2
|
Subject to the provisions of the Statute, and, where applicable, the rules of the Designated Stock
Exchange and/or any competent regulatory authority, the Company may purchase its own Shares (including any redeemable Shares) in
such manner and on such other terms as the Directors may agree with the relevant Member. For the avoidance of doubt, repurchases
of Shares in the circumstances described at Articles 8.1(a) and 8.1(b) above shall not require further approval of the Members.
|
|
|
8.3
|
The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital.
|
|
|
8.4
|
The Directors may accept the surrender for no consideration of any fully paid Share.
|
|
|
9.1
|
The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share.
|
|
|
9.2
|
The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration).
|
|
|
10
|
Variation of Rights of Shares
|
|
|
10.1
|
If at any time the share capital of the Company is divided into different classes of Shares, all
or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether
or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such
variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation
shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class, or
with the sanction of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the
holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such
variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such
meeting all the provisions of the Articles relating to general meetings shall apply
mutatis mutandis
, except that the necessary
quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder
of Shares of the class present in person or by proxy may demand a poll.
|
|
|
10.2
|
For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.
|
|
|
10.3
|
The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith.
|
|
|
11
|
Commission on Sale of Shares
|
The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
|
|
12
|
Non Recognition of Trusts
|
The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
|
|
13.1
|
The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share.
|
|
|
13.2
|
The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold.
|
|
|
13.3
|
To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles.
|
|
|
13.4
|
The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale.
|
|
|
14.1
|
Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.
|
|
|
14.2
|
A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed.
|
|
|
14.3
|
The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof.
|
|
|
14.4
|
If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part.
|
|
|
14.5
|
An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call.
|
|
|
14.6
|
The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid.
|
|
|
14.7
|
The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.
|
|
|
14.8
|
No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable.
|
|
|
15.1
|
If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the
call was made will be liable to be forfeited.
|
|
|
15.2
|
If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.
|
|
|
15.3
|
A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person.
|
|
|
15.4
|
A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to
the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with
interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of those Shares.
|
|
|
15.5
|
A certificate in writing under the hand of one Director or officer of the Company that a Share
has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to
be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title
to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of
the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in
reference to the forfeiture, sale or disposal of the Share.
|
|
|
15.6
|
The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified.
|
|
|
16
|
Transmission of Shares
|
|
|
16.1
|
If a Member dies the survivor or survivors (where he was a joint holder) or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares.
The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or
sole holder.
|
|
|
16.2
|
Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of
such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the
same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member
before his death or bankruptcy or liquidation or dissolution, as the case may be.
|
|
|
16.3
|
A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is
not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles) the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share
until the requirements of the notice have been complied with.
|
|
|
17
|
Amendments of Memorandum and Articles of Association and Alteration of Capital
|
|
|
17.1
|
The Company may by Ordinary Resolution:
|
|
|
(a)
|
increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;
|
|
|
(b)
|
consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares;
|
|
|
(c)
|
convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination;
|
|
|
(d)
|
by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and
|
|
|
(e)
|
cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled.
|
|
|
17.2
|
All new Shares created in accordance with the provisions of the preceding Article shall be subject
to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise
as the Shares in the original share capital.
|
|
|
17.3
|
Subject to the provisions of the Statute, the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution and Article 48.13, the Company may by Special Resolution:
|
|
|
(b)
|
alter or add to the Articles;
|
|
|
(c)
|
alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and
|
|
|
(d)
|
reduce its share capital or any capital redemption reserve fund.
|
|
|
18
|
Offices and Places of Business
|
Subject to the provisions of
the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
|
|
19.1
|
All general meetings other than annual general meetings shall be called extraordinary general meetings.
|
|
|
19.2
|
The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them,
it shall be held at the Registered Office on the second Wednesday in December of each year at ten o'clock in the morning. At these
meetings the report of the Directors (if any) shall be presented.
|
|
|
19.3
|
The Directors may call general meetings, and they shall on a Members' requisition forthwith proceed
to convene an extraordinary general meeting of the Company.
|
|
|
19.4
|
A Members' requisition is a requisition of Members holding at the date of deposit of the requisition
not less than ten per cent. in par value of the issued Shares which as at that date carry the right to vote at general meetings
of the Company.
|
|
|
19.5
|
The Members' requisition must state the objects of the meeting and must be signed by the requisitionists
and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists.
|
|
|
19.6
|
If there are no Directors as at the date of the deposit of the Members' requisition or if the Directors
do not within twenty-one days from the date of the deposit of the Members' requisition duly proceed to convene a general meeting
to be held within a further twenty-one days, the requisitionists, or any of them representing more than one-half of the total voting
rights of all of the requisitionists, may themselves convene a general meeting, but any meeting so convened shall be held no later
than the day which falls three months after the expiration of the said twenty-one day period.
|
|
|
19.7
|
A general meeting convened as aforesaid by requisitionists shall be convened in the same manner
as nearly as possible as that in which general meetings are to be convened by Directors.
|
|
|
20
|
Notice of General Meetings
|
|
|
20.1
|
At least ten days' notice shall be given of any general meeting. Every notice shall specify the
place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and shall
be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that
a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the
provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so
agreed:
|
|
|
(a)
|
in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and
|
|
|
(b)
|
in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety five per cent. in par value of the Shares giving
that right.
|
|
|
20.2
|
The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting.
|
|
|
21
|
Proceedings at General Meetings
|
|
|
21.1
|
No business shall be transacted at any general meeting unless a quorum is present. The holders
of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by
its duly authorised representative or proxy shall be a quorum.
|
|
|
21.2
|
A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting.
|
|
|
21.3
|
A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held.
|
|
|
21.4
|
If a quorum is not present within half an hour from the time appointed for the meeting to commence
or if during such a meeting a quorum ceases to be present, the meeting, if convened upon a Members' requisition, shall be dissolved
and in any other case it shall stand adjourned to the same day in the next week at the same time and/or place or to such other
day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour
from the time appointed for the meeting to commence, the Members present shall be a quorum.
|
|
|
21.5
|
The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting.
|
|
|
21.6
|
If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting.
|
|
|
21.7
|
The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place.
|
|
|
21.8
|
When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting.
|
|
|
21.9
|
A resolution put to the vote of the meeting shall be decided on a poll.
|
|
|
21.10
|
A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be
the resolution of the general meeting at which the poll was demanded.
|
|
|
21.11
|
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs,
and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of
the poll.
|
|
|
21.12
|
In the case of an equality of votes the chairman shall be entitled to a second or casting vote.
|
|
|
22.1
|
Subject to any rights or restrictions attached to any Shares, every Member present in any such
manner shall have one vote for every Share of which he is the holder.
|
|
|
22.2
|
In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members.
|
|
|
22.3
|
A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court,
and any such committee, receiver, curator bonis or other person may vote by proxy.
|
|
|
22.4
|
No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.
|
|
|
22.5
|
No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall
be final and conclusive.
|
|
|
22.6
|
Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or
more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify
the number of Shares in respect of which each proxy is entitled to exercise the related votes.
|
|
|
22.7
|
A Member holding more than one Share need not cast the votes in respect of his Shares in the same
way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed
under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against
a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed.
|
|
|
23.1
|
The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member.
|
|
|
23.2
|
The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote.
|
The chairman may in any event
at his discretion declare that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy that
is not deposited in the manner permitted, or which has not been declared to have been duly deposited by the chairman, shall be
invalid.
|
|
23.3
|
The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked.
An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.
|
|
|
23.4
|
Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy.
|
|
|
24.1
|
Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as
it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised
shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise
if it were an individual Member.
|
|
|
24.2
|
If a clearing house (or its nominee(s)), being a corporation, is a Member, it may authorise such
persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided
that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence
of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house (or its nominee(s)) as if such
person was the registered holder of such Shares held by the clearing house (or its nominee(s)).
|
|
|
25
|
Shares that May Not be Voted
|
Shares in the Company that are
beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding Shares at any given time.
There shall be a board of Directors
consisting of not less than one person provided however that the Company may by Ordinary Resolution increase or reduce the limits
in the number of Directors.
|
|
27.1
|
Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors.
|
|
|
27.2
|
All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution.
|
|
|
27.3
|
The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
|
|
|
27.4
|
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party.
|
|
|
28
|
Appointment and Removal of Directors
|
|
|
28.1
|
The Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution
remove any Director.
|
|
|
28.2
|
The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors.
|
|
|
29
|
Vacation of Office of Director
|
The office of a Director shall
be vacated if:
|
|
(a)
|
the Director gives notice in writing to the Company that he resigns the office of Director; or
|
|
|
(b)
|
the Director absents himself (for the avoidance of doubt, without being represented by proxy) from
three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass
a resolution that he has by reason of such absence vacated office; or
|
|
|
(c)
|
the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or
|
|
|
(d)
|
the Director is found to be or becomes of unsound mind; or
|
|
|
(e)
|
all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors.
|
|
|
30
|
Proceedings of Directors
|
|
|
30.1
|
The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be two if there are two or more Directors, and shall be one if there is only one Director.
|
|
|
30.2
|
Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote.
|
|
|
30.3
|
A person may participate in a meeting of the Directors or committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting.
|
|
|
30.4
|
A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened
and held.
|
|
|
30.5
|
A Director may, or other officer of the Company on the direction of a Director shall, call a meeting
of the Directors by at least two days' notice in writing to every Director which notice shall set forth the general nature of the
business to be considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such
notice of a meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the
Members shall apply
mutatis mutandis.
|
|
|
30.6
|
The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.
|
|
|
30.7
|
The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting.
|
|
|
30.8
|
All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding
that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them
were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been
duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as
the case may be.
|
|
|
30.9
|
A Director may be represented at any meetings of the board of Directors by a proxy appointed in
writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that
of the appointing Director.
|
A Director who is present at
a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action
with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent
by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favour of such action.
|
|
32.1
|
A Director may hold any other office or place of profit under the Company (other than the office
of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the
Directors may determine.
|
|
|
32.2
|
A Director may act by himself or by, through or on behalf of his firm in a professional capacity
for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.
|
|
|
32.3
|
A Director may be or become a director or other officer of or otherwise interested in any company
promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such
Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of,
or from his interest in, such other company.
|
|
|
32.4
|
No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall
any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in
connection with any such contract or transaction by reason of such Director or alternate Director holding office or of the fiduciary
relationship thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which he
is interested provided that the nature of the interest of any Director in any such contract or transaction shall be disclosed by
him at or prior to its consideration and any vote thereon.
|
|
|
32.5
|
A general notice that a Director is a shareholder, director, officer or employee of any specified
firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure
for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such
general notice it shall not be necessary to give special notice relating to any particular transaction.
|
The Directors shall cause minutes
to be made in books kept for the purpose of all appointments of officers made by the Directors, all proceedings at meetings of
the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names
of the Directors present at each meeting.
|
|
34
|
Delegation of Directors' Powers
|
|
|
34.1
|
The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors. Any such delegation may be made subject to any conditions
the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked
or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they are capable of applying.
|
|
|
34.2
|
The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying.
|
|
|
34.3
|
The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time.
|
|
|
34.4
|
The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him.
|
|
|
34.5
|
The Directors may appoint such officers of the Company (including, for the avoidance of doubt and
without limitation, any secretary) as they consider necessary on such terms, at such remuneration and to perform such duties, and
subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the
terms of his appointment an officer of the Company may be removed by resolution of the Directors or Members. An officer of the
Company may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.
|
|
|
35
|
No Minimum Shareholding
|
The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
|
|
36
|
Remuneration of Directors
|
|
|
36.1
|
The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine, provided that no remuneration shall be paid to any Director prior to the consummation of a Business Combination.
The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled to be paid all travelling,
hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of
Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the
Company, or otherwise in connection with the business of the Company or the discharge of their duties as a Director, or to receive
a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly
the other.
|
|
|
36.2
|
The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director.
|
|
|
37.1
|
The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a Director or some officer of the Company or other person
appointed by the Directors for the purpose.
|
|
|
37.2
|
The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used.
|
|
|
37.3
|
A Director or officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.
|
|
|
38
|
Dividends, Distributions and Reserve
|
|
|
38.1
|
Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically
state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised
or unrealised profits of the Company, out of the share premium account or as otherwise permitted by the Statute.
|
|
|
38.2
|
Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.
|
|
|
38.3
|
The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise.
|
|
|
38.4
|
The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner
as may seem expedient to the Directors.
|
|
|
38.5
|
Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met.
|
|
|
38.6
|
The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company.
|
|
|
38.7
|
Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.
|
|
|
38.8
|
No Dividend or other distribution shall bear interest against the Company.
|
|
|
38.9
|
Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company.
|
The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
|
|
40.1
|
The Directors shall cause proper books of account to be kept with respect to all sums of money
received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and
purchases of goods by the Company and the assets and liabilities of the Company. Proper books of account shall not be deemed to
be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company's
affairs and to explain its transactions.
|
|
|
40.2
|
The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.
|
|
|
40.3
|
The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.
|
|
|
41.1
|
The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine.
|
|
|
41.2
|
Without prejudice to the freedom of the Directors to establish any other committee, if the Shares
(or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the Designated Stock
Exchange, the Directors shall establish and maintain an Audit Committee as a committee of the board of Directors and shall adopt
a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The
composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the SEC and the Designated
Stock Exchange. The Audit Committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.
|
|
|
41.3
|
If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit
Committee for the review and approval of potential conflicts of interest.
|
|
|
41.4
|
The remuneration of the Auditor shall be fixed by the Board or the Audit Committee (if one exists).
|
|
|
41.5
|
If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming
incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor.
|
|
|
41.6
|
Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and
explanation as may be necessary for the performance of the duties of the Auditor.
|
|
|
41.7
|
Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members.
|
|
|
42.1
|
Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served in accordance
with the requirements of the Designated Stock Exchange.
|
|
|
42.2
|
Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery
of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays
or public holidays) following the day on which the notice was delivered to the courier. Where a notice is sent by post, service
of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and
shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands)
following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of the notice shall be
deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day
that it was transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting the e-mail to
the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent,
and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient.
|
|
|
42.3
|
A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred.
|
|
|
42.4
|
Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of
joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings.
|
|
|
43.1
|
If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up:
|
|
|
(a)
|
if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or
|
|
|
(b)
|
if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.
|
|
|
43.2
|
If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the sanction of a Special Resolution of the Company and any other sanction required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like sanction, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability.
|
|
|
44
|
Indemnity and Insurance
|
|
|
44.1
|
Every Director and officer of the Company (which for the avoidance of doubt, shall not include
auditors of the Company), together with every former Director and former officer of the Company (each an "
Indemnified Person
")
shall be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages
or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act
in carrying out their functions other than such liability (if any) that they may incur by reason of their own actual fraud or wilful
default. No Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether
direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud or wilful default
of such Indemnified Person. No person shall be found to have committed actual fraud or wilful default under this Article unless
or until a court of competent jurisdiction shall have made a finding to that effect.
|
|
|
44.2
|
The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and
any advancement shall be returned to the Company (without interest) by the Indemnified Person.
|
|
|
44.3
|
The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach
to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation
to the Company.
|
Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
|
|
46
|
Transfer by Way of Continuation
|
If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
|
|
47
|
Mergers and Consolidations
|
The Company shall, with the approval
of a Special Resolution, have the power to merge or consolidate with one or more constituent companies (as defined in the Statute),
upon such terms as the Directors may determine.
|
|
48.1
|
Notwithstanding any other provision of these Articles, this Article 48 shall apply during the period
commencing upon the adoption of these Articles and terminating upon the first to occur of the consummation of any Business Combination
and the distribution of the Trust Fund (as defined below) pursuant to Article 48.4. A “
Business Combination
”
shall mean a merger, share exchange, asset acquisition, share purchase, recapitalisation, reorganisation or similar business combination,
with one or more businesses or entities (the “
target business
”).
|
In the event
of a conflict between this Article 48 and any other Articles, the provisions of this Article 48 shall prevail, and this Article
48.1 may not be amended prior to the consummation of a Business Combination. “
Trust Fund
” shall mean the trust
account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the
IPO, together with the proceeds of the private placement to (a) certain of the Founders and (b) the Underwriters simultaneously
with the closing date of the IPO, will be deposited.
|
|
48.2
|
Prior to the consummation of any Business Combination, the Company shall either:
|
|
|
(a)
|
submit such Business Combination to its Members for approval.
|
|
|
(b)
|
provide holder of Shares issued in the IPO with the opportunity to have such Shares repurchased
by means of a tender offer for an amount equal to their pro rata share of the Trust Fund.
|
In the event the Company
determines to engage in a tender offer, the Company shall initiate such tender offer (a “Pre-Business Combination Tender”)
by filing tender offer documents with the SEC in accordance with Rule 13e-4 and Regulation 14E of the Securities Exchange Act of
1934, as amended, to repurchase IPO Shares. The closing of the Business Combination and the closing of the Pre-Business Combination
Tender shall be cross-conditioned.
In the event
the Company determines to seek shareholder approval for any proposed Business Combination pursuant to this Article, in the event
that a majority of the Shares voted are voted for the approval of the Business Combination, the Company shall be authorised to
consummate the Business Combination, provided that the Company shall not consummate any Business Combination unless the Company
has net tangible assets of at least US$5,000,001 upon such consummation.
|
|
48.3
|
Any Member holding Shares issued to persons who are not a Founder, officer or Director may, contemporaneously
with the vote on a Business Combination, elect to have their Shares issued in the IPO repurchased for cash (the “
IPO Repurchase
”),
provided that no such Member acting together with any affiliate of his or any other person with whom he is acting in concert or
as a partnership, syndicate, or other group for the purposes of acquiring, holding, or disposing of Shares may exercise this redemption
right with respect to more than 20 per cent. of the Shares issued in the IPO. If so demanded, the Company shall pay any such redeeming
Member, regardless of whether he is voting for or against such proposed Business Combination, a per Share repurchase price equal
to their pro rata share of the Trust Fund (such repurchase price being referred to herein as the “
Repurchase Price
”).
|
The Repurchase
Price shall be paid promptly following the consummation of the relevant Business Combination. If the proposed Business Combination
is not approved or completed for any reason then such repurchases shall be cancelled and share certificates returned to the relevant
Members as appropriate.
|
|
48.4
|
In the event that the Company does not consummate a Business Combination by eighteen months
after the closing date of the IPO (or twenty-one months after the closing date of the IPO if the Company has entered into a
definitive agreement with a target business for a Business Combination within eighteen months from the date of the IPO and
such Business Combination has not yet been consummated within such eighteen month period):
|
|
|
(a)
|
the Company shall, subject to applicable laws, distribute the proceeds of the Trust Fund (calculated
as of the date that is two days prior to the proposed distribution date) to Members holding Shares issued in the IPO on a pro rata
basis (subject to any funds set aside for claims of creditors); and
|
|
|
(b)
|
thereafter the Company's sole business purpose shall be to dissolve (an "
Automatic
Dissolution Event
") and the Company shall be dissolved and liquidated accordingly. Only the holders of the
IPO Shares shall be entitled to receive liquidating distributions, and the Company shall pay no liquidating distributions with
respect to any other outstanding securities of the Company.
|
|
|
48.5
|
A holder of Shares issued in the IPO shall be entitled to receive distributions from the Trust
Fund only in the event of an IPO Repurchase or a distribution of the Trust Fund pursuant to Article 48.4. In no other circumstance
shall a holder of Shares issued in the IPO have any right or interest of any kind in the Trust Fund.
|
|
|
48.6
|
After the issue of Shares in the IPO, and prior to the consummation of a Business Combination,
the Directors shall not issue additional Shares that participate in any manner in the Trust Fund or that vote as a class with Shares
issued in the IPO on any Business Combination.
|
|
|
48.7
|
The uninterested independent directors shall approve any transaction or transactions between the
Company and any of the following parties:
|
|
|
(a)
|
any shareholder owning an interest in the voting power of the Company that gives such shareholder
a significant influence over the Company; and
|
|
|
(b)
|
any Director or executive officer of the Company and any affiliate or relative of such Director
or executive officer.
|
|
|
48.8
|
Any payment made to members of the Audit Committee (if one exists) shall require the review and
approval of the Directors, with any Director interested in such payment abstaining from such review and approval.
|
|
|
48.9
|
A Director may vote in respect of any Business Combination in which such Director has a conflict
of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict
to the other Directors and abstain from voting in connection with the Business Combination.
|
|
|
48.10
|
The Directors shall be divided into three classes: Class A, Class B and Class C. The number of
Directors in each class shall be as nearly equal as possible. Upon the adoption of these amended and restated Articles, the existing
Directors shall by resolution classify themselves as Class A, Class B or Class C Directors. The Class A Directors shall stand elected
for a term expiring at the Company’s first annual general meeting, the Class B Directors shall stand elected for a term expiring
at the Company’s second annual general meeting and the Class C Directors shall stand elected for a term expiring at the Company’s
third annual general meeting. Commencing at the Company's first annual general meeting, and at each annual general meeting thereafter,
Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at the third succeeding
annual general meeting after their election. Except as the Statute or other applicable law may otherwise require, in the interim
between annual general meetings or extraordinary general meetings called for the election of Directors and/or the removal of one
or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies in the board of Directors,
including unfilled vacancies resulting from the removal of Directors for cause, may be filled by the vote of a majority of the
remaining Directors then in office, although less than a quorum (as defined in these Articles), or by the sole remaining Director.
All Directors shall hold office until the expiration of their respective terms of office and until their successors shall have
been elected and qualified. A Director elected to fill a vacancy resulting from the death, resignation or removal of a Director
shall serve for the remainder of the full term of the Director whose death, resignation or removal shall have created such vacancy
and until his successor shall have been elected and qualified.
|
|
|
48.11
|
The Audit Committee shall monitor compliance with the terms of the IPO and, if any non-compliance
is identified, the Audit Committee shall be charged with the responsibility to take all action necessary to rectify such non-compliance
or otherwise cause compliance with the terms of the IPO.
|
Exhibit 4.1
|
NUMBER
|
UNITS
|
|
|
|
|
U-__________
|
|
SEE
REVERSE FOR
CERTAIN DEFINITIONS
|
ANDINA
ACQUISITION CORP. II
|
|
UNITS CONSISTING OF ONE
ORDINARY SHARE AND
ONE RIGHT TO RECEIVE ONE-SEVENTH
OF ONE ORDINARY SHARE
AND ONE WARRANT TO PURCHASE ONE HALF OF ONE ORDINARY SHARE
|
|
|
|
|
|
THIS CERTIFIES THAT
|
|
|
|
|
|
|
|
|
is the owner of
|
|
|
Units.
|
Each Unit (“Unit”)
consists of one (1) ordinary share, par value $.0001 per share, of Andina Acquisition Corp. II, a Cayman Islands exempted
company (the “Company”), one (1) right (“Right”) to receive one-seventh of one ordinary share upon
the Company’s completion of an initial business combination as defined in and within the time period as required by its
Memorandum and Articles of Association, as the same may be amended from time to time (a “Business Combination”)
and one (1) warrant ("Warrant") to purchase one-half of one ordinary share. The securities comprising the Units represented
by this certificate are not transferable separately prior to the ninetieth (90th) day after the date of the prospectus
relating to the Company’s initial public offering, unless EarlyBirdCapital, Inc. determines that an earlier date is
acceptable. The terms of the Rights and Warrants are governed by a Rights Agreement and Warrant Agreement, each, dated as of
_______, 2015, between the Company and Continental Stock Transfer & Trust Company, as Agent, and are subject to the terms
and provisions contained therein, all of which terms and provisions the holder of this certificate consents to by acceptance
hereof. Copies of the Rights Agreement and Warrant Agreement are on file at the office of the Right Agent or Warrant Agent at
17 Battery Place, New York, New York 10004, and are available to any Right holder on written request and without cost.
This certificate is
not valid unless countersigned by the Transfer Agent and Registrar of the Company.
Witness the facsimile
seal of the Company and the facsimile signatures of its duly authorized officers.
This Unit Certificate
shall be governed and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws
principles thereof.
By
|
|
|
|
|
|
|
C
hairman
|
|
|
S
ecretary
|
|
|
|
|
|
Andina Acquisition Corp. II
The Company will
furnish without charge to each shareholder who so requests, a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of shares or series thereof of the Company and the qualifications,
limitations, or restrictions of such preferences and/or rights.
The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
|
|
|
|
|
|
|
|
|
|
|
|
TEN COM –
|
as tenants in common
|
UNIF GIFT MIN ACT -
|
|
Custodian
|
|
|
|
|
TEN ENT –
|
as tenants by the entireties
|
|
(Cust)
|
|
(Minor)
|
|
|
|
JT TEN –
|
as joint tenants with right of survivorship
|
under Uniform Gifts to Minors
|
|
|
|
and not as tenants in common
|
|
Act
|
|
|
|
|
|
|
|
|
|
(State)
|
|
|
Additional Abbreviations
may also be used though not in the above list.
For value received, ___________________________
hereby sell, assign and transfer unto
|
PLEASE INSERT SOCIAL SECURITY OR OTHER
|
|
|
IDENTIFYING NUMBER OF ASSIGNEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
|
|
|
represented by the within Certificate, and do hereby irrevocably constitute and appoint
|
|
|
|
Attorney
|
|
to transfer the said Units on the books of the within named Company will full power of substitution in the premises.
|
|
|
|
Notice:
|
The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
|
|
Signature(s) Guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
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).
|
|
The holder of this certificate shall be entitled to receive funds
from the trust account only in the event of the Company’s liquidation upon failure to consummate a business combination within
the required time period set forth in the Company’s Amended and Restated Memorandum and Articles of Association as the same
may be amended from time to time, or if the holder seeks to convert his shares upon consummation of A business combination or in
connection with certain amendments to the Company’s Amended and Restated Memorandum and Articles of Association. In no other
circumstances shall the holder have any right or interest of any kind in or to the trust account.
ANDINA ACQUISITION
CORP. II
INCORPORATED UNDER
THE LAWS OF THE CAYMAN ISLANDS
ORDINARY SHARES
SEE REVERSE FOR
CERTAIN DEFINITIONS
|
|
This Certifies that
|
CUSIP G0441P 10 4
|
|
|
|
|
|
|
|
|
is the owner of
|
|
|
FULLY PAID AND
NON-ASSESSABLE ORDINARY SHARES OF THE PAR VALUE OF $.0001 EACH OF
ANDINA ACQUISITION
CORP. II
transferable on the
books of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
The Company
will be forced to liquidate if it is unable to complete an initial business combination as defined in and within the time period
as required by its Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time.
This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.
Dated:
|
|
|
|
|
|
|
CHAIRMAN
|
|
|
SECRETARY
|
|
|
|
|
|
The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
|
|
|
|
|
|
|
|
|
|
|
|
TEN COM –
|
as tenants in common
|
UNIF GIFT MIN ACT -
|
|
Custodian
|
|
|
|
|
TEN ENT –
|
as tenants by the entireties
|
|
(Cust)
|
|
(Minor)
|
|
|
|
JT TEN –
|
as joint tenants with right of survivorship
|
under Uniform Gifts to Minors
|
|
|
|
and not as tenants in common
|
|
Act
|
|
|
|
|
|
|
|
|
|
(State)
|
|
|
Additional Abbreviations
may also be used though not in the above list.
Andina Acquisition
Corp. II
The Company will
furnish without charge to each shareholder who so requests the powers, designations, preferences and relative, participating, optional
or other special rights of each class of shares or series thereof of the Company and the qualifications, limitations, or restrictions
of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to
all the provisions of the Amended and Restated Memorandum and Articles of Association and all amendments thereto and resolutions
of the Board of Directors providing for the issue of Preferred Shares (copies of which may be obtained from the secretary of the
Company), to all of which the holder of this certificate by acceptance hereof assents.
For value received, ___________________________
hereby sell, assign and transfer unto
|
PLEASE INSERT SOCIAL SECURITY OR OTHER
|
|
|
IDENTIFYING NUMBER OF ASSIGNEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares
|
|
|
|
|
of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
|
|
|
|
Attorney
|
|
to transfer the said stock on the books of the within named Company will full power of substitution in the premises.
|
|
|
|
Notice:
|
The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
|
|
Signature(s) Guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
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).
|
|
The holder of this certificate shall be entitled to receive funds
from the trust account only in the event of the Company’s liquidation upon failure to consummate a business combination within
the required time period set forth in the Company’s Amended and Restated Memorandum and Articles of Association as the same
may be amended from time to time, or if the holder seeks to convert his shares upon consummation of A business combination or in
connection with certain amendments to the Company’s Amended and Restated Memorandum and Articles of Association. In no other
circumstances shall the holder have any right or interest of any kind in or to the trust account.
ANDINA ACQUISITION
CORP. II
INCORPORATED UNDER
THE LAWS OF THE CAYMAN ISLANDS
RIGHT
SEE REVERSE FOR
CERTAIN DEFINITIONS
|
|
|
CUSIP G0441P 12 0
|
|
|
|
|
|
|
|
THIS CERTIFIES THAT, for value received
|
|
|
is the registered holder of a right or rights (the “Right”)
to receive one-seventh of one ordinary share, par value $.0001 per share, of Andina Acquisition Corp. II (the “Company”)
for each Right evidenced by this Right Certificate on the Company’s completion of an initial business combination (as defined
in the prospectus relating to the Company’s initial public offering (“Prospectus”) upon surrender of this Right
Certificate pursuant to the Rights Agreement between the Company and Continental Stock Transfer & Trust Company. In no event
will the Company be required to net cash settle any Right or issue a fractional Ordinary Share.
Upon liquidation of
the Company in the event an initial business combination is not consummated during the required period as identified in the Company’s
Amended and Restated Memorandum and Articles of Association, the Right(s) shall expire and be worthless. The holder of a Right
shall have no right or interest of any kind in the Company’s trust account (as defined in the Prospectus).
Upon due presentment
for registration of transfer of the Right Certificate at the office or agency of Continental Stock Transfer & Trust Company,
the Right Agent, a new Right Certificate or Right Certificates of like tenor and evidencing in the aggregate a like number of Rights
shall be issued to the transferee in exchange for this Right Certificate, without charge except for any applicable tax or other
governmental charge.
The Company and the
Right Agent may deem and treat the registered holder as the absolute owner of this Right Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any conversion hereof, of any distribution to the registered
holder, and for all other purposes, and neither the Company nor the Right Agent shall be affected by any notice to the contrary.
Holders of Rights are
not entitled to any of the rights of a shareholder of the Company.
Dated:
|
|
|
|
|
|
|
CHAIRMAN
|
|
|
SECRETARY
|
|
|
|
|
|
The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
|
|
|
|
|
|
|
|
|
|
|
|
TEN COM –
|
as tenants in common
|
UNIF GIFT MIN ACT -
|
|
Custodian
|
|
|
|
|
TEN ENT –
|
as tenants by the entireties
|
|
(Cust)
|
|
(Minor)
|
|
|
|
JT TEN –
|
as joint tenants with right of survivorship
|
under Uniform Gifts to Minors
|
|
|
|
and not as tenants in common
|
|
Act
|
|
|
|
|
|
|
|
|
|
(State)
|
|
|
Additional Abbreviations
may also be used though not in the above list.
Andina Acquisition
Corp. II
The Company will
furnish without charge to each shareholder who so requests the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof of the Company and the qualifications, limitations, or restrictions
of such preferences and/or rights. This certificate and the rights represented thereby are issued and shall be held subject to
all the provisions of the Rights Agreement, and all amendments thereto, to all of which the holder of this certificate by acceptance
hereof assents.
For value received, ___________________________
hereby sell, assign and transfer unto
|
PLEASE INSERT SOCIAL SECURITY OR OTHER
|
|
|
IDENTIFYING NUMBER OF ASSIGNEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights represented by
the within Certificate, and do hereby irrevocably constitute and appoint
|
|
|
|
Attorney
|
|
to transfer the said Rights on the books of the within named Company will full power of substitution in the premises.
|
|
|
|
Notice:
|
The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
|
|
Signature(s) Guaranteed:
|
|
|
|
|
|
|
|
|
|
|
|
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).
|
|
The holder of this certificate shall have no right or interest of
any kind in or to the funds held in the Company’s trust fund (as defined in the Prospectus).
RIGHTS AGREEMENT
Agreement made as of _____________, 2015
between Andina Acquisition Corp. II, a Cayman Islands exempted company, with offices at 250 West 57
th
St., Suite 2223,
New York, New York 10107 (“Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with
offices at 17 Battery Place, New York, New York 10004 (“Right Agent”).
WHEREAS, the Company is engaged in a public
offering (“Public Offering”) and has filed with the Securities and Exchange Commission (the “SEC”) a Registration
Statement on Form S-1, No. 333-207037 (“Registration Statement”), for the registration, under the Securities Act of
1933, as amended (“Act”) of its units, each unit (“Unit”) comprised of one ordinary share of the Company,
par value $.0001 per share (“Ordinary Share”), and one right to receive one-seventh of one Ordinary Share upon the
happening of the triggering event described herein and, in connection therewith, will issue and deliver up to 4,600,000 rights
(“Public Rights”) to the investors in the Public Offering; and
WHEREAS, the Company has received binding
commitments from its initial shareholders (the “Initial Shareholders”) and EarlyBirdCapital, Inc. (“EarlyBirdCapital”)
to purchase in a private placement (“Private Offering”) up to an aggregate of 338,500 Units, and in connection therewith,
will issue and deliver up to an aggregate of 338,500 rights (“Private Rights” and together with the Public Rights,
the “Rights”) upon consummation of such Private Offering; and
WHEREAS, the Company may issue up to an
additional 500,000 Rights in consideration of certain working capital loans that may be made by the Company’s officers, directors,
initial shareholders or affiliates; and
WHEREAS, the Company desires the Right Agent
to act on behalf of the Company, and the Right Agent is willing to so act, in connection with the issuance, registration, transfer
and exchange of the Rights; and
WHEREAS, the Company desires to provide
for the form and provisions of the Rights, the terms upon which they shall be issued, and the respective rights, limitation of
rights, and immunities of the Company, the Right Agent, and the holders of the Rights; and
WHEREAS, all acts and things have been done
and performed which are necessary to make the Rights, when executed on behalf of the Company and countersigned by or on behalf
of the Right 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 Right Agent
. The Company hereby
appoints the Right Agent to act as agent for the Company for the Rights, and the Right Agent hereby accepts such appointment and
agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2.
Rights
.
2.1.
Form of Right
. Each Right shall be issued
in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein
and shall be signed by, or bear the facsimile signature of, the Chairman of the Board, President or Chief Executive Officer and
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 Right shall have ceased to serve in the capacity in which such person
signed the Right before such Right 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 Right Agent pursuant to this Agreement, a Right shall be invalid and of no effect and may not be exchanged
for Ordinary Shares.
2.3.
Registration
.
2.3.1.
Right Register
. The Right Agent shall
maintain books (“Right Register”) for the registration of original issuance and the registration of transfer of the
Rights. Upon the initial issuance of the Rights, the Right Agent shall issue and register the Rights in the names of the respective
holders thereof in such denominations and otherwise in accordance with instructions delivered to the Right Agent by the Company.
2.3.2.
Registered Holder
. Prior to due presentment
for registration of transfer of any Right, the Company and the Right Agent may deem and treat the person in whose name such Right
shall be registered upon the Right Register (“registered holder”) as the absolute owner of such Right and of each Right
represented thereby (notwithstanding any notation of ownership or other writing on the Right Certificate made by anyone other than
the Company or the Right Agent), for the purpose of the exchange thereof, and for all other purposes, and neither the Company nor
the Right Agent shall be affected by any notice to the contrary.
2.4.
Detachability of Rights
. The securities comprising
the Units, including the Rights, will not be separately transferable until the ninetieth (90th) day after the date hereof unless
EBC informs the Company of its decision to allow earlier separate trading, but in no event will separate trading of the securities
comprising the Units begin until (i) the Company files a Current Report on Form 8-K which includes an audited balance sheet reflecting
the receipt by the Company of the gross proceeds of the Public Offering including the proceeds received by the Company from the
exercise of the over-allotment option, if the over-allotment option is exercised on the date hereof, and (ii) the Company issues
a press release and files a Current Report on Form 8-K announcing when such separate trading shall begin.
3.
Terms and Exchange of Rights
3.1.
Rights
. Each Right shall entitle the holder
thereof to receive one-seventh of one Ordinary Share upon the happening of an Exchange Event (described below). No additional consideration
shall be paid by a holder of Rights in order to receive his, her or its Ordinary Shares upon an Exchange Event as the purchase
price for such Ordinary Shares has been included in the purchase price for the Units. In no event will the Company be required
to net cash settle the Rights. Each holder of a Right will be required to affirmatively convert his, her or its Rights in order
to receive the 1/7 of a share underlying each right (without paying any additional consideration) upon consummation of the Exchange
Event. Each holder of a Right will be required to indicate his, her or its election to convert the Rights into the underlying shares
as well as to return the original certificates evidencing the Rights to the Company.
3.2.
Exchange Event
. An Exchange Event shall occur
upon the Company’s consummation of an initial Business Combination (as defined in the Company’s Amended and Restated
Memorandum and Articles of Association).
3.3.
Exchange of Rights
.
3.3.1.
Issuance of Certificates
. As soon as
practicable upon the occurrence of an Exchange Event, the Company shall direct holders of the Rights to return their Rights certificates
to the Right Agent. Upon receipt of a valid Rights certificate, the Company shall issue to the registered holder of such Right(s)
a certificate or certificates for the full number of Ordinary Shares to which he, she or it is entitled, registered in such name
or names as may be directed by him, her or it. Notwithstanding the foregoing, or any provision contained in this Rights Agreement
to the contrary, in no event will the Company be required to net cash settle the Rights. The Company shall not issue fractional
shares upon exchange of Rights. At the time of an Exchange Event, the Company will instruct the Right Agent to round down to the
nearest whole Ordinary Share.
3.3.2.
Valid Issuance
. All Ordinary shares
issued upon an Exchange Event in conformity with this Agreement, and registered on the Company’s register of members, shall
be validly issued, fully paid and nonassessable.
3.3.3.
Date of Issuance
. Each person in whose
name any such certificate for Ordinary Shares is issued shall for all purposes be deemed to have become the holder of record of
such shares on the date that he is registered on the Company’s register of members.
3.3.4
Company Not Surviving Following
Exchange Event
. Upon an Exchange Event in which the Company does not continue as the publicly held reporting entity, the definitive
agreement with the target business for a Business Combination will provide for the holders of Rights to receive the same per share
consideration the holders of the Ordinary Shares will receive in such transaction, for the number of shares such holder is entitled
to pursuant to Section 3.1 above.
3.5
Duration of Rights
. If an Exchange Event does
not occur within the time period set forth in the Company’s Amended and Restated Memorandum and Articles of Association,
as the same may be amended from time to time, the Rights shall expire and shall be worthless.
4.
Transfer and Exchange of Rights
.
4.1.
Registration of Transfer
. The Right Agent
shall register the transfer, from time to time, of any outstanding Right upon the Right Register, upon surrender of such Right
for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon
any such transfer, a new Right certificate representing an equal aggregate number of Rights shall be issued and the old Right certificate
shall be cancelled by the Right Agent. The Right certificate(s) so cancelled shall be delivered by the Right Agent to the Company
from time to time upon request.
4.2.
Procedure for Surrender of Rights
. Rights
may be surrendered to the Right Agent, together with a written request for exchange or transfer, and thereupon the Right Agent
shall issue in exchange therefor one or more new Right certificate(s) as requested by the registered holder of the Rights so surrendered,
representing an equal aggregate number of Rights; provided, however, that in the event that a Right surrendered for transfer bears
a restrictive legend, the Right Agent shall not cancel such Right certificate and issue new Right certificate(s) in exchange therefor
until the Right Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating
whether the new Right certificate(s) must also bear a restrictive legend.
4.3.
Fractional Rights
. The Right Agent shall
not be required to effect any registration of transfer or exchange which will result in the issuance of a Right certificate for
a fraction of a Right.
4.4.
Service Charges
. No service charge shall
be made for any exchange or registration of transfer of Rights.
4.5.
Adjustments to Conversion Ratios
. The number
of Ordinary Shares that the holders of Rights are entitled to receive as a result of the occurrence of an Exchange Event shall
be equitably adjusted to reflect appropriately the effect of any share split, reverse share split, share dividend, reorganization,
recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Ordinary Shares occurring
on or after the date hereof and prior to the Exchange Event.
4.6
Right Execution and Countersignature
.
The Right Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Rights
required to be issued pursuant to the provisions of this Section 4, and the Company, whenever required by the Right Agent, will
supply the Right Agent with Rights duly executed on behalf of the Company for such purpose.
5.
Other Provisions Relating to Rights of Holders of Rights
.
5.1.
No Rights as Shareholder
. Until exchange
of a Right for Ordinary Shares as provided for herein, a Right does not entitle the registered holder thereof to any of the rights
of a shareholder 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 shareholders in respect of the meetings of shareholders or
the election of directors of the Company or any other matter.
5.2.
Lost, Stolen, Mutilated, or Destroyed
Right
Certificate(s). If any Right certificate(s) is lost, stolen, mutilated, or destroyed, the Company and the Right 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 Right certificate,
include the surrender thereof), issue a new Right certificate of like denomination, tenor, and date as the Right certificate so
lost, stolen, mutilated, or destroyed. Any such new Right certificate shall constitute a substitute contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Right certificate shall be at any time enforceable
by anyone.
5.3.
Reservation of Ordinary Shares
. The Company
shall at all times reserve and keep available a number of its authorized but unissued Ordinary Shares that will be sufficient to
permit the exchange of all outstanding Rights issued pursuant to this Agreement.
6.
Concerning the Right Agent and Other Matters
.
6.1.
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 Right Agent in respect of the issuance or
delivery of Ordinary Shares upon the exchange of Rights, but the Company shall not be obligated to pay any transfer taxes in respect
of the Rights or such shares.
6.2.
Resignation, Consolidation, or Merger of Right
Agent
.
6.2.1.
Appointment of Successor Right Agent
.
The Right 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 Right Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Right Agent in place
of the Right 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 Right Agent or by the holder of the Right (who shall, with such notice, submit
his, her or its Right for inspection by the Company), then the holder of any Right may apply to the Supreme Court of the State
of New York for the County of New York for the appointment of a successor Right Agent at the Company’s cost. Any successor
Right 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 Right Agent shall be vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Right Agent with like effect as if originally named as Right Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Right Agent shall execute and deliver,
at the expense of the Company, an instrument transferring to such successor Right Agent all the authority, powers, and rights of
such predecessor Right Agent hereunder; and upon request of any successor Right 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 Right
Agent all such authority, powers, rights, immunities, duties, and obligations.
6.2.2.
Notice of Successor Right Agent
. In
the event a successor Right Agent shall be appointed, the Company shall give notice thereof to the predecessor Right Agent and
the transfer agent for the Ordinary Shares not later than the effective date of any such appointment.
6.2.3.
Merger or Consolidation of Right Agent
.
Any corporation into which the Right Agent may be merged or with which it may be consolidated or any corporation resulting from
any merger or consolidation to which the Right Agent shall be a party shall be the successor Right Agent under this Agreement without
any further act.
6.3.
Fees and Expenses of Right Agent
.
6.3.1.
Remuneration
. The Company agrees to
pay the Right Agent reasonable remuneration for its services as such Right Agent hereunder and will reimburse the Right Agent upon
demand for all expenditures that the Right Agent may reasonably incur in the execution of its duties hereunder.
6.3.2.
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 Right Agent for the carrying out or performing
of the provisions of this Agreement.
6.4.
Liability of Right Agent
.
6.4.1.
Reliance on Company Statement
. Whenever
in the performance of its duties under this Right Agreement, the Right 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 President, Chief Executive Officer or Chief Financial Officer and delivered to the Right Agent. The Right
Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
6.4.2.
Indemnity
. The Right Agent shall be
liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Right
Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything
done or omitted by the Right Agent in the execution of this Agreement except as a result of the Right Agent’s gross negligence,
willful misconduct, or bad faith.
6.4.3.
Exclusions
. The Right Agent shall have
no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Right (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right; nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Ordinary Shares to be issued pursuant to this Agreement or any Right or as to whether any Ordinary
Shares will when issued be valid and fully paid and nonassessable.
6.5.
Acceptance of Agency
. The Right Agent hereby
accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth.
6.6
Waiver
. The Right Agent hereby waives any
right of set-off or any other 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 Right 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.
7.
Miscellaneous Provisions
.
7.1.
Successors
. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Right Agent shall bind and inure to the benefit of their respective
successors and assigns.
7.2.
Notices
. Any notice, statement or demand
authorized by this Right Agreement to be given or made by the Right Agent or by the holder of any Right to or on the Company shall
be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service
within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company
with the Right Agent), as follows:
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
Attn: Chief Executive Officer
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Right or by the Company to or on the Right Agent shall be sufficiently given when so delivered
if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such
notice, postage prepaid, addressed (until another address is filed in writing by the Right Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Robert E. McMonagle
with a copy (which shall not constitute notice) in each case
to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: David Alan Miller, Esq.
and
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Robert J. Mittman, Esq.
and
EarlyBirdCapital, Inc.
366 Madison Avenue
8
th
Floor
New York, New York 10017
Attn: General Counsel and Investment Banking Department
Facsimile: 212-661-0200
7.3.
Applicable Law
. The validity, interpretation,
and performance of this Agreement and of the Rights shall be governed in all respects by 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 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 inconvenience 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.
7.4.
Persons Having Rights under this Agreement
.
Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the
Rights and, for the purposes of Sections 3, 7.4 and 7.8 hereof, EarlyBirdCapital, any right, remedy, or claim under or by reason
of this Right Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. EarlyBirdCapital shall be deemed
to be a third-party beneficiary of this Agreement with respect to Sections 3, 7.4 and 7.8 hereof. All covenants, conditions, stipulations,
promises, and agreements contained in this Right Agreement shall be for the sole and exclusive benefit of the parties hereto (and
EarlyBirdCapital with respect to the Sections 3, 7.4 and 7.8 hereof) and their successors and assigns and of the registered holders
of the Rights.
7.5.
Examination of the Right Agreement
. A copy
of this Agreement shall be available at all reasonable times at the office of the Right Agent in the Borough of Manhattan, City
and State of New York, for inspection by the registered holder of any Right. The Right Agent may require any such holder to submit
his, her or its Right for inspection by it.
7.6.
Counterparts
. This Agreement may be executed
in any number of original or facsimile 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.
7.7.
Effect of Headings
. The Section headings
herein are for convenience only and are not part of this Right Agreement and shall not affect the interpretation thereof.
7.8
Amendments
. This 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 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 shall require the written consent or vote
of the registered holders of a majority of the then outstanding Rights. The provisions of this Section 7.8 may not be modified,
amended or deleted without the prior written consent of EarlyBirdCapital.
7.9
Severability
. This Right 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 Right 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 Right Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the day and year first above written.
|
|
|
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
By:
|
|
|
|
|
Name: Julio A. Torres
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
|
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
Exhibit 4.5
THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER
OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A PERIOD
OF 180 DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) EARLYBIRDCAPITAL, INC. (“
EBC
”)
OR AN UNDERWRITER OR SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF EBC OR OF ANY SUCH
UNDERWRITER OR SELECTED DEALER, EXCEPT IN ACCORDANCE WITH FINRA RULE 5110(G)(2).
THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF
THE CONSUMMATION BY ANDINA ACQUISITION CORP. II (“
COMPANY
”) OF A MERGER, SHARE EXCHANGE, ASSET ACQUISITION,
SHARE PURCHASE, RECAPITALIZATION, REORGANIZATION OR OTHER SIMILAR BUSINESS COMBINATION WITH ONE OR MORE ENTITIES (“
BUSINESS
COMBINATION
”) (AS DESCRIBED MORE FULLY IN THE COMPANY’S REGISTRATION STATEMENT (DEFINED HEREIN)) AND _________,
2016. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, ON THE EXPIRATION DATE (DEFINED HEREIN).
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
400,000 UNITS
OF
ANDINA ACQUISITION CORP. II
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by
or on behalf of EarlyBirdCapital, Inc. (“
Holder
”), as registered owner of this Purchase Option, to Garnero
Group Acquisition Company (“
Company
”), Holder is entitled, at any time or from time to time upon
the later of the consummation of a Business Combination or
[ ● ]
,
2016 (“
Commencement Date
”), and at or before 5:00 p.m., New York City local time, on the five year anniversary
of the effective date (“
Effective Date
”) of the Company’s registration statement (“
Registration
Statement
”) pursuant to which Units are offered for sale to the public (“
Offering
”), but
not thereafter (“
Expiration Date
”), to subscribe for, purchase and receive, in whole or in part, up to
Four Hundred Thousand (400,000) units (“
Units
”) of the Company, each Unit consisting of one ordinary
share of the Company, par value $0.0001 per share (“
Ordinary Shares
”), one right entitling the Holder
to receive one seventh (1/7) of an Ordinary Share upon consummation of a Business Combination and one warrant (“
Warrant(s)
”),
each to purchase one half (1/2) of an Ordinary Share. Each Right is the same as the right included in the Units being
registered for sale to the public by way of the Registration Statement (the “
Right(s)
”). Each Warrant
is the same as the warrant 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 Ordinary Shares, Rights 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.
2.1
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 Ordinary Shares and Warrants) in the manner required by Section 2.1, and
subject to Section 6.1 hereof, the Holder shall have the right (but not the obligation) to convert any exercisable but unexercised
portion of this Purchase Option into Units (“
Cashless Exercise Right
”) as follows: upon exercise
of the Cashless Exercise Right, the Company shall deliver to the Holder (without payment by the Holder of any of the Exercise Price
in cash) that number of Units (or that number of Ordinary Shares, Rights and Warrants comprising that number of Units) equal to
the number of Units to be exercised multiplied by 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). 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 the Units, Ordinary
Shares and Public Warrants are still trading, (i) if the Units are listed on a national securities exchange or quoted on the OTC
Bulletin Board (or successor exchange), the average reported last sale price of the Units in the principal trading market for the
Units as reported by the exchange, Nasdaq or the Financial Industry Regulatory Authority (“
FINRA
”), as
the case may be, for the three trading days preceding the date in question; or (ii) if the Units are not listed on a national securities
exchange or quoted on the OTC Bulletin Board (or successor exchange), but is traded in the residual over-the-counter market, the
average reported last sale price for Units for the three trading days preceding the date in question for which such quotations
are reported by the Pink Sheets, LLC or similar publisher of such quotations; (B) in the event that the Units are not still trading
but the Ordinary Share and Public Warrants underlying the Units are still trading, the aggregate of (i) the product of (x) the
Current Market Price of the Ordinary Share and (y) the number of the Ordinary Shares underlying one Unit (which shall include the
portion of an Ordinary Share the holder of a Unit would automatically receive in connection with the Right included in each such
Unit) plus (ii) the product of (x) the Current Market Price of the Public Warrants and (y) the number of the Warrants included
in one Unit; or (C) in the event that neither the Units nor Public Warrants are still trading, the aggregate of (i) the product
of (x) the Current Market Price of the Ordinary Share and (y) the number of the Ordinary Shares underlying one Unit (which shall
include the portion of an Ordinary Share the holder of a Unit would automatically receive in connection with the Right included
in each such Unit) plus (ii) the remainder derived from subtracting (x) the exercise price of the Warrants multiplied by the number
of Ordinary Shares issuable upon exercise of the Warrants underlying one Unit from (y) the product of (aa) the Current Market Price
of the Ordinary Shares multiplied by (bb) the number of Ordinary Shares underlying the Warrants included in each such Unit. The
“
Current Market Price
” shall mean (i) if the Ordinary Shares (or Public Warrants, as the case may be)
are listed on a national securities exchange or quoted on the OTC Bulletin Board (or successor exchange), the average reported
last sale price of the Ordinary Shares (or Public Warrants) in the principal trading market for the Ordinary Share (or Public Warrants)
as reported by the exchange, Nasdaq or FINRA, as the case may be, for the three trading days preceding the date in question; (ii)
if the Ordinary Shares (or Public Warrants, as the case may be) are not listed on a national securities exchange or quoted on the
OTC Bulletin Board (or successor exchange), but are traded in the residual over-the-counter market, the average reported last sale
price for the Ordinary Share (or Public Warrants) on for the three trading days 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 Ordinary
Share cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors of the Company shall determine,
in good faith. In the event the Public Warrants have expired and are no longer exercisable, no “Value” shall
be attributed to the Warrants underlying this Purchase Option.
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.
2.4
No
Obligation to Net Cash Settle
. Notwithstanding anything to the contrary contained in this Purchase Option, in no event will
the Company be required to net cash settle the exercise of the Purchase Option or the Rights or Warrants underlying the Purchase
Option. The holder of the Purchase Option and the Warrants underlying the Purchase Option will not be entitled to exercise the
Purchase Option or the Warrants underlying such Purchase Option unless it exercises such Purchase Option pursuant to the Cashless
Exercise Right or a registration statement is effective, or an exemption from the registration requirements is available at such
time and, if the holder is not able to exercise the Purchase Option or the underlying Warrants, the Purchase Option and/or the
underlying Warrants, as applicable, will expire worthless.
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 (or the Ordinary Shares, Rights and Warrants underlying this Purchase Option)
for a period of 180 days pursuant to FINRA Conduct Rule 5110(g)(1) following the Effective Date to anyone other than (i) EBC
or an underwriter or selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of EBC 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 Graubard Miller 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 funds sufficient to pay any Exercise Price (except
to the extent that the Holder elects to exercise this Purchase Option by means of a cashless exercise as provided in Section 2.3
above) 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.
5.1
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 use its best efforts 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, Ordinary Shares, the Warrants and the Ordinary Shares underlying the Rights
and the Warrants (collectively, the “
Registrable Securities
”). On such occasion, the Company will use
its best efforts to 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. The Company shall not be obligated to effect more than one (1) Demand
Registration under this Section 5.1 in respect of all Registrable Securities.
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.
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 Ordinary Shares or other securities which the Company desires to
sell and the Ordinary 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 Ordinary 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 Ordinary Shares or other securities registrable pursuant to the terms of the Registration Rights Agreement between
the Company and the initial investors in the Company and EBC (and/or its designees), dated as of June 25, 2014 (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 Ordinary 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 the Company does not have to
continue its obligations under Section 5.1 with respect to such proposed offering.
5.1.6
Terms.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any
legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders
shall pay any and all underwriting commissions. The Company agrees to use its reasonable best efforts to qualify or register the
Registrable Securities in such states as are reasonably requested by the Majority Holder(s); provided, however, that in no event
shall the Company be required to register the Registrable Securities in a state in which such registration would cause (i) the
Company to be obligated to qualify to do business in such state, or would subject the Company to taxation as a foreign corporation
doing business in such jurisdiction or (ii) the principal shareholders of the Company to be obligated to escrow their ordinary
shares of the Company. The Company shall use its best efforts to cause any registration statement or post-effective amendment filed
pursuant to the demand rights granted under Section 5.1.1 to remain effective 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 Ordinary Shares which
the Company desires to sell, taken together with Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary 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 Ordinary
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.
5.2.4
Terms
.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any
legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities but the Holders
shall pay any and all underwriting commissions related to the Registrable Securities. In the event of such a proposed registration,
the Company shall furnish the then Holders of outstanding Registrable Securities with not less than fifteen days written notice
prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for
each applicable registration statement filed (during the period in which the Purchase Option is exercisable) by the Company until
such time as all of the Registrable Securities have been registered and sold. The Holders of the Registrable Securities shall exercise
the “piggy-back” rights provided for herein by giving written notice, within ten days of the receipt of the Company’s
notice of its intention to file a registration statement. The Company shall use its best efforts to cause any registration statement
filed pursuant to the above “piggyback” rights to remain effective for at least nine months from the date that the
Holders of the Registrable Securities are first given the opportunity to sell all of such securities.
5.3
General
Terms
.
5.3.1
Indemnification
.
The Company shall, to the fullest extent permitted by applicable law, 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, EBC 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.
5.3.2
Exercise
of Purchase Options
. Nothing contained in this Purchase Option shall be construed as requiring the Holder(s) to exercise their
Purchase Options or Warrants underlying such Purchase Options prior to or after the initial filing of any registration statement
or the effectiveness thereof.
5.3.3
Documents
Delivered to Holders
. The Company shall furnish EBC, 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) a “cold comfort” letter dated the
effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated
the date of the closing under 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 EBC, 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 EBC, 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 FINRA. 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 EBC, as representative of
the Holders, shall reasonably request. The Company shall not be required to disclose any confidential information or other records
to EBC, 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.
5.3.4
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.
5.3.5
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 to use its best efforts to obtain 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).
5.3.6
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.
6.1
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
Ordinary Shares is increased by a share dividend payable in Ordinary Shares or by a split-up of Ordinary Shares or other similar
event, then, on the effective date thereof, the number of Ordinary 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 Ordinary Shares, and the exercise
price applicable thereto, underlying the Rights and the Warrants underlying each of the Units purchasable hereunder shall be adjusted
in accordance with the terms of the Rights and the Warrants, as the case may be.
6.1.2
Aggregation
of Shares
. If after the date hereof, and subject to the provisions of Section 6.3, the number of outstanding Ordinary Shares
is decreased by a consolidation, combination or reclassification of Ordinary Shares or other similar event, then, on the effective
date thereof, the number of Ordinary 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 Ordinary 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.
6.1.3
Replacement
of Securities upon Reorganization, etc
. In case of any reclassification or reorganization of the outstanding Ordinary Shares
other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Ordinary 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
Ordinary 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 Ordinary Shares of the Company obtainable
upon exercise of this Purchase Option and the underlying Rights and Warrants immediately prior to such event; and if any reclassification
also results in a change in Ordinary Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.4
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 Ordinary 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 Ordinary 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 Ordinary 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 to
the nearest whole number of Warrants, Ordinary 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 but unissued Ordinary Shares,
solely for the purpose of issuance upon exercise of the Purchase Options (including the Ordinary Shares underlying the Rights)
or the Warrants underlying the Purchase Option, such number of Ordinary 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 Ordinary 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 Ordinary 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 Ordinary Shares issuable upon exercise of the Purchase Options (including
the Ordinary Shares underlying the Rights), (ii) Rights issuable upon exercise of the Purchase Options, (iii) Warrants issuable
upon exercise of the Purchase Options and (iv) Ordinary 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 OTC Bulletin Board or any successor trading market) on which the Units, the Ordinary 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 Ordinary 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 Ordinary Shares any additional shares of the Company or securities convertible into or exchangeable
for shares 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:
Andina Acquisition Corp. II
250 West 57
th
Street – Suite 2223
New York, New York 10107
Attn: Mr. Julio A. Torres. Chief Executive Officer
Fax.:
[ ● ]
Email:
[ ● ]
9.1
Amendments
.
The Company and EBC 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 EBC may deem necessary or desirable and that the Company and EBC 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 resolved through final and biding arbitration
in accordance with the International Arbitration Rules of the American Arbitration Association (“AAA”). The
arbitration shall be brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York,
will be conducted in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel
and that the arbitrator panel’s decision shall be final and enforceable by any court having jurisdiction over the party from
whom enforcement is sought. The cost of such arbitrators and arbitration services, together with the prevailing party’s
legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed by the arbitrators. The
Company hereby appoints, without power of revocation, Graubard Miller, 405 Lexington Avenue New York, New York 10174 Fax No.: (212)
818-8881 Attn: David Alan Miller, Esq., as agent to accept and acknowledge on its behalf service of any and all process which may
be served in any arbitration, action, proceeding or counterclaim in any way relating to or arising out of this Purchase Option.
9.6
Waiver,
Etc
. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Option shall not
be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Option or any
provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Option.
No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Option shall be effective
unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought;
and no waiver of any such breach, non-compliance or non- fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach or non-compliance.
9.7
Execution
in Counterparts
. This Purchase Option may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.
9.8
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 EBC 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 25th day of June, 2014.
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
Form to be used to exercise Purchase Option:
Andina Acquisition Corp. II
250 West 57
th
Street – Suite 2223
New York, New York 10107
Attn: Mr. Julio A. Torres. Chief Executive Officer
Fax:
[ ● ]
Email:
[ ● ]
Date:_________________, 20___
The undersigned hereby elects irrevocably
to exercise all or a portion of the within Purchase Option and to purchase ____ Units of Andina Acquisition Corp. II and hereby
makes payment of $____________ (at the rate of $_________ per Unit) in payment of the Exercise Price pursuant thereto. Please issue
the securities 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” based 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.
|
Signature(s) Guaranteed:
|
|
|
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
Name
Address
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Purchase Option):
FOR VALUE RECEIVED,______________________________________________
does hereby sell, assign and transfer unto___________________________________________ the right to purchase __________ Units of
Andina Acquisition Corp. II (“
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__
|
|
|
|
|
Signature
|
|
|
|
|
|
|
|
|
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.
|
Signature(s) Guaranteed:
|
|
|
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 4.6
|
NUMBER
________-
|
|
(SEE REVERSE SIDE FOR LEGEND)
THIS WARRANT WILL BE VOID IF NOT EXERCISED
PRIOR TO THE EXPIRATION DATE (DEFINED BELOW)
|
|
WARRANTS
|
ANDINA ACQUISITION CORP. II
CUSIP ____
WARRANT
THIS CERTIFIES THAT, for value received is the registered
holder of a warrant or warrants (the “Warrant”), expiring at 5:00 p.m., New York City time, on the five year
anniversary of the completion by Andina Acquisition Corp. II, a Cayman Islands exempted Company (the “Company”),
of an initial merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar
business combination with one or more businesses or entities (a “Business Combination”), to purchase one half
(1/2) of one fully paid and non-assessable ordinary share, par value $.0001 per share (“Shares”), of the Company
for each Warrant evidenced by this Warrant Certificate. The Warrant entitles the holder thereof to purchase from the Company,
commencing on the later of (a) _______, 2016 [one year from the date of the final prospectus] and (b) the Company’s
completion of a Business Combination, such whole number of Shares of the Company at the price of $11.50 per whole share, upon
surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent,
Continental Stock Transfer & Trust Company, but only subject to the conditions set forth herein and in the Warrant
Agreement between the Company and Continental Stock Transfer & Trust Company. In no event will the Company be required to
net cash settle any warrant exercise. The Warrant Agreement provides that upon the occurrence of certain events the Warrant
Price and the number of Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be
adjusted. The term Warrant Price as used in this Warrant Certificate refers to the price per Share at which Shares may be
purchased at the time the Warrant is exercised.
No fraction of a Share
will be issued upon any exercise of a Warrant. A warrantholder may exercise its warrants only for a whole number of shares. This
means that only an even number of warrants may be exercised at any given time by a warrantholder.
Upon any exercise
of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder
hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant
has not been exercised.
Warrant Certificates,
when surrendered at the office or agency of the Warrant Agent by the registered holder hereof in person or by attorney duly authorized
in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment
of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a
like number of Warrants.
Upon due presentment
for registration of transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee
in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for
any applicable tax or other governmental charge.
The Company and the
Warrant Agent may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the registered
holder, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant does
not entitle the registered holder to any of the rights of a shareholder of the Company.
The Company reserves
the right to call the Warrant at any time prior to its exercise with a notice of call in writing to the holders of record of the
Warrant, giving at least 30 days’ notice of such call, at any time while the Warrant is exercisable, if the last sale price
of the Shares has been at least $24.00 per share on each of 20 trading days within any 30 trading day period (the “30-day
trading period”) ending on the third business day prior to the date on which notice of such call is given and if, and only
if, there is a current registration statement in effect with respect to the Shares underlying the Warrants for each day of the
30-day trading period and continuing each day thereafter until the date of redemption. The call price of the Warrants is to be
$.01 per Warrant. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in the notice
of call shall be canceled on the books of the Company and have no further value except for the $.01 call price.
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder irrevocably
elects to exercise ______________ Warrants represented by this Warrant Certificate, and to purchase the ordinary shares issuable
upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name of
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
and, if such number of Warrants shall not
be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered
in the name of, and delivered to, the Registered Holder at the address stated below:
|
Dated: _____________________
|
|
|
|
(SIGNATURE)
|
|
|
|
|
|
|
|
|
(ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(TAX IDENTIFICATION NUMBER)
|
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
For Value Received, _______________________ hereby sell, assign,
and transfer unto
|
(PLEASE TYPE OR PRINT NAME AND ADDRESS)
|
|
|
|
|
|
|
|
|
|
|
|
|
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
______________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitute and appoint _________________________________ Attorney to transfer this Warrant
Certificate on the books of the Company, with full power of substitution in the premises.
|
Dated: _________________________
|
|
|
|
|
|
|
(SIGNATURE)
|
|
The
signature to the assignment of the Subscription Form must correspond to the name written upon the face of this Warrant Certificate
in every particular, without alteration or enlargement or any change whatsoever, and must be guaranteed by a commercial bank or
trust company or a member firm of the NYSE Amex, New York Stock Exchange, Pacific Stock Exchange or Chicago Stock Exchange.
Exhibit 4.7
WARRANT AGREEMENT
Agreement made as of _______, 2015 between
Andina Acquisition Corp. II, a Cayman Islands company, with offices at 50 West 57th Street, Suite 2223, New York, NY 10107 (“Company”),
and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, New York
10004 (“Warrant Agent”).
WHEREAS, the Company has received binding
commitments (“Subscription Agreements”) from its initial shareholders and from EarlyBirdCapital, Inc. (“EBC”)
to purchase up to an aggregate of 338,500 units, each unit (“Unit”) comprised of one Ordinary Share of the Company,
par value $.0001 per share (“Ordinary Share”), one right to receive one-seventh of one Ordinary Share and one warrant
to purchase one half of one Ordinary Share for $11.50, subject to adjustment as described herein, and in connection therewith,
will issue and deliver up to an aggregate of 338,500 warrants (“Private Warrants”) upon consummation of such private
placement (“Private Offering”); and
WHEREAS, the Company is engaged in a public
offering (“Public Offering”) of Units and, in connection therewith, will issue and deliver up to 4,600,000 warrants
(“Public Warrants”) to the public investors and (ii) 400,000 warrants (underlying unit purchase options) to EBC or
its designees (“EBC Warrants” and, together with the Private Warrants and Public Warrants, the “Warrants”);
and
WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, No. 333-207037 (“Registration
Statement”), for the registration, under the Securities Act of 1933, as amended (“Act”) of, among other securities,
the Public Warrants and the Ordinary Shares issuable upon exercise of the Public 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, shall be in substantially the form of Exhibit A hereto, the
provisions of which are incorporated herein and shall be signed by the Chairman of the Board or Chief Executive Officer and 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 Warrants
. The securities comprising the Units will not be separately transferable until the ninetieth (90
th
)
day after the date hereof unless EBC informs the Company of its decision to allow earlier separate trading, but in no event will
separate trading of the securities comprising the Units begin until (i) the Company files a Current Report on Form 8-K which includes
an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering including the proceeds
received by the Company from the exercise of the over-allotment option, if the over-allotment option is exercised on the date hereof,
and (ii) the Company issues a press release and files a Current Report on Form 8-K announcing when such separate trading shall
begin.
2.5
Warrant
Attributes
.
2.5.1
Private
Warrants
. The Private Warrants will be issued in the same form as the Public Warrants but they (i) will be exercisable either
for cash or on a cashless basis at the holder’s option pursuant to Section 3.3.1(c) and (ii) will not be redeemable by the
Company, in either case as long as such warrants are held by the initial purchasers or their affiliates and permitted transferees
(as prescribed in Section 5.6 hereof). The provisions of this Section 2.5.1 may not be modified, amended or deleted without the
prior written consent of EBC.
2.5.2
EBC
Warrants
. The EBC Warrants shall have the same terms and be in the same form as the Public Warrants.
3.
Terms
and Exercise of Warrants
3.1.
Warrant
Price
. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the Company the number of Ordinary Shares stated therein, at the
price of $11.50 per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section
3.1. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which Ordinary Shares
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 (as defined below) for a period of not less than 10 business days; provided, however, that the Company
shall provide at least 10 business days prior written notice of such reduction to registered holders of the Warrants; provided,
further, however, that any such reduction shall be applied consistently to all of the Warrants.
3.2.
Duration
of Warrants
. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the later of the
consummation by the Company of a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or
other similar business combination with one or more businesses or entities (“Business Combination”) (as described more
fully in the Registration Statement) and ______, 2016 [one year from the date of this agreement], and terminating at 5:00 p.m.,
New York City time on the earlier to occur of (i) five years from the consummation of a Business Combination (ii) the liquidation
of the Company, and (iii) the Redemption Date as provided in Section 6.2 of this Agreement (“Expiration Date”); provided,
however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in Section
7.4 below. 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, that the Company will provide written notice to registered
holders of the Warrants of such extension of not less than 20 days.
3.3.
Exercise
of Warrants
.
3.3.1.
Payment
.
Subject to the provisions of the Warrant 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, and by paying in full the Warrant Price for each full Ordinary Share as to which the Warrant is exercised and any
and all applicable taxes due in connection with the exercise of the Warrant, as follows:
(a) in
lawful money of the United States, in good certified check or good bank draft payable to the order of the Warrant Agent;
(b) in
the event of redemption pursuant to Section 6 hereof in which the Company’s management has elected to require all holders
of Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of Ordinary
Shares equal to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied
by the difference between the Warrant Price and the “Fair Market Value” (defined below) by (y) the Fair Market Value.
Solely for purposes of this Section 3.3.1(b), the “Fair Market Value” shall mean the average reported last sale price
of the Ordinary Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption
is sent to holders of Warrant pursuant to Section 6 hereof; or
(c) with
respect to any Private Warrants, so long as such Private Warrants are held by the initial purchasers or their affiliates and permitted
transferees (as prescribed in Section 5.6 hereof), by surrendering such Private Warrants for that number of Ordinary Shares equal
to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the
difference between the exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided,
however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for
purposes of this Section 3.3.1(c), the “Fair Market Value” shall mean the average reported last sale price of the Ordinary
Shares for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice; or
(d) in
the event the post-effective amendment or registration statement required by Section 7.4 hereof is not effective and current, then
during the period beginning on the 91
st
day after the closing of the Business Combination and ending upon the effectiveness
of such post-effective amendment or registration statement, and during any other period after such date of effectiveness when the
Company shall fail to have maintained an effective registration statement covering the Ordinary Shares issuable upon exercise of
the Warrants, by surrendering such Warrants for that number of Ordinary Shares equal to the quotient obtained by dividing (x) the
product of the number of Ordinary Shares underlying the Warrants, multiplied by the difference between the exercise price of the
Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall
be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this Section 3.3.1(d), the
“Fair Market Value” shall mean the average reported last sale price of the Ordinary Shares for the 10 trading days
ending on the day prior to the date of exercise.
3.3.2.
Issuance
of Certificates
. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the
Warrant Price (if any), the Company shall issue to the registered holder of such Warrant a certificate or certificates for the
number of full Ordinary Shares to which he is entitled, registered in such name or names as may be directed by him, her or it,
and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such
Warrant shall not have been exercised. Notwithstanding the foregoing, in no event will the Company be required to net cash settle
the Warrant exercise. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such
exercise would be unlawful.
3.3.3.
Valid
Issuance
. All Ordinary Shares issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly
issued, fully paid and nonassessable.
3.3.4.
Date
of Issuance
. Each person in whose name any such certificate for Ordinary Shares 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 share 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 share transfer books are open.
3.3.5.
Maximum
Percentage
. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the
provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless
he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the
holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect
to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would
beneficially own in excess of 9.8% (the “Maximum Percentage”) of the Ordinary Shares outstanding immediately after
giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Ordinary Shares beneficially
owned by such person and its affiliates shall include the number of Ordinary Shares issuable upon exercise of the Warrant with
respect to which the determination of such sentence is being made, but shall exclude Ordinary Shares that would be issuable upon
(x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y)
exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such
person and its affiliates (including, without limitation, any convertible notes or convertible preferred shares or warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence,
for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining the number of
outstanding Ordinary Shares, the holder may rely on the number of outstanding Ordinary Shares as reflected in (1) the Company’s
most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the
Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of Ordinary Shares outstanding. For any reason at any time, upon the written
request of the holder of the Warrant, the Company shall, within two (2) business days, confirm orally and in writing to such holder
the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined
after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the
date as of which such number of outstanding Ordinary Shares was reported. By written notice to the Company, the holder
of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage
specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after
such notice is delivered to the Company.
4.
Adjustments
.
4.1.
Share
Dividends - Split Ups
. If after the date hereof, the number of outstanding Ordinary Shares is increased by a share dividend
payable in Ordinary Shares, or by a split up of the Ordinary Shares, or other similar event, then, on the effective date of such
share dividend, split up or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall be increased
in proportion to such increase in outstanding Ordinary Shares. A rights offering to all holders of the Ordinary Shares entitling
holders to purchase Ordinary Shares at a price less than the “Fair Market Value” (as defined below) shall be deemed
a share dividend of a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually sold in such
rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable
for the Ordinary Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Ordinary Share paid in such rights
offering divided by (y) the Fair Market Value. For purposes of this subsection 4.1, (i) if the rights offering is for securities
convertible into or exercisable for Ordinary Shares, in determining the price payable for the Ordinary Shares, there shall be taken
into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and
(ii) “Fair Market Value” means the volume weighted average price of the Ordinary Shares as reported during the ten
(10) trading day period ending on the trading day prior to the first date on which the Ordinary Shares trade on the applicable
exchange or in the applicable market, regular way, with the right to receive such rights.
4.2.
Aggregation
of Shares
. If after the date hereof, the number of outstanding Ordinary Shares is decreased by a consolidation, combination,
reverse share split or reclassification of the Ordinary Shares or other similar event, then, on the effective date of such consolidation,
combination, reverse share split, reclassification or similar event, the number of Ordinary Shares issuable on exercise of each
Warrant shall be decreased in proportion to such decrease in outstanding Ordinary Shares.
4.3
Extraordinary
Dividends
. If the Company, at any time while the Warrants (or rights to purchase the Warrants) are outstanding and
unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Ordinary Shares
on account of such Ordinary Shares (or other shares of the Company’s share capital into which the Warrants are convertible),
other than (a) as described in subsection 4.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the conversion
rights of the holders of the Ordinary Shares in connection with a proposed initial Business Combination, (d) as a result of the
repurchase of Ordinary Shares by the Company in connection with an initial Business Combination or as otherwise permitted by the
Investment Management Trust Agreement between the Company and the Warrant Agent dated of even date herewith or (e) 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 Warrant Price shall be decreased,
effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and 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 Ordinary
Share in respect of such Extraordinary Dividend. For purposes of this subsection 4.3, “Ordinary Cash Dividends” means
any cash dividend or cash distribution which, when combined on a per share basis with the per share amounts of all other cash dividends
and cash distributions paid on the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend
or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and
excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of Ordinary
Shares issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering).
4.4
Adjustments
in Exercise Price
. Whenever the number of Ordinary Shares 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 Ordinary Shares purchasable upon the exercise
of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Ordinary Shares so
purchasable immediately thereafter.
4.5.
Replacement
of Securities upon Reorganization, etc
. In case of any reclassification or reorganization of the outstanding Ordinary Shares
(other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such Ordinary 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
Ordinary Shares), 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 Ordinary Shares 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 Ordinary Shares covered by Section 4.1 or 4.2, then such adjustment
shall be made pursuant to Sections 4.1, 4.2, 4.4 and this Section 4.5. The provisions of this Section 4.5 shall
similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
4.6.
Notices
of Changes in Warrant
. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant,
the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence
of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, then, in any such event, the Company shall give written notice to
each 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.
4.7.
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 or down to the nearest whole number the number of the Ordinary Shares to be issued to the Warrant
holder.
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; provided, however, that 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.
4.9
Other
Events
. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of
this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid
an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company
shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing,
which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate
the intent and purpose of this Section 4 and, if such firm determines that an adjustment is necessary, the terms of such adjustment.
The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5.
Transfer
and Exchange of Warrants
.
5.1.
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.
5.2.
Procedure
for Surrender of Warrants
. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered
holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event
that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new
Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer
may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3.
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.
5.4.
Service
Charges
. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5.
Warrant
Execution and Countersignature
. The Warrant Agent is hereby authorized to countersign and to 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.
5.6.
Private
Warrants
. The Warrant Agent shall not register any transfer of Private Warrants until after the consummation by the Company
of a Business Combination, except for transfers made in accordance with the Subscription Agreements, on the condition that prior
to such registration for transfer, the Warrant Agent shall be presented with written documentation pursuant to which each transferee
or the trustee or legal guardian for such transferee agrees to be bound by the terms of the Subscription Agreements.
6.
Redemption
.
6.1.
Redemption
.
Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at
any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred
to in Section 6.2, at the price of $.01 per Warrant (“Redemption Price”), provided that the last sales price of the
Ordinary Shares has been at least $24.00 per share (subject to adjustment in accordance with Section 4 hereof), on each of twenty
(20) trading days within any thirty (30) trading day period (“30-Day Trading Period”) ending on the third business
day prior to the date on which notice of redemption is given and provided further that there is a current registration statement
in effect with respect to the Ordinary Shares underlying the Warrants for each day in the 30-Day Trading Period and continuing
each day thereafter until the Redemption Date (defined below).
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 (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than 30 days prior to the Redemption Date to the registered holders of the Warrants to be redeemed
at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the registered holder received such notice.
6.3.
Exercise
After Notice of Redemption
. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with
Section 3 of this 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 Redemption Date. In the event the Company determines to require all holders of Warrants to exercise their
Warrants on a “cashless basis” pursuant to Section 3.3.1(b), the notice of redemption will contain the information
necessary to calculate the number of Ordinary Shares to be received upon exercise of the Warrants, including the “Fair Market
Value” in such case. 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
Exclusion
of Certain Warrants
. The Company understands that the redemption rights provided for by this Section 6 apply only to outstanding
Warrants. To the extent a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by redemption.
However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such exercise provided that the
criteria for redemption is met. Additionally, any of the Private Warrants shall not be redeemable by the Company as long as such
Private Warrants continue to be held by initial purchasers and affiliates or their permitted transferees (as prescribed in Section
5.6 hereof). However, once such Private Warrants are no longer held by the initial purchasers or their affiliates or permitted
transferees, such Private Warrants shall then be redeemable by the Company pursuant to Section 6 hereof. The provisions of this
Section 6.4 may not be modified, amended or deleted without the prior written consent of EBC.
7.
Other
Provisions Relating to Rights of Holders of Warrants
.
7.1.
No
Rights as Shareholder
. A Warrant does not entitle the registered holder thereof to any of the rights of a shareholder 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 shareholders in respect of the meetings of shareholders 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 Ordinary Shares
. The Company shall at all times reserve and keep available a number of its authorized but unissued Ordinary
Shares that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4.
Registration
of Ordinary Shares
. The Company agrees that as soon as practicable, but in no event later than the closing of a Business Combination,
it shall use its best efforts to 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 Ordinary Shares issuable upon exercise of the Warrants, and it shall use
its best efforts to take such action as is necessary to qualify for sale, in those states in which the Warrants were initially
offered by the Company, the Ordinary Shares issuable upon exercise of the Warrants. In either case, the Company will use its best
efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the expiration
of the Warrants in accordance with the provisions of this Agreement. In addition, the Company agrees to use its best 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. If any such post-effective amendment or registration statement has not been declared effective by the
90-day anniversary following the closing of the Business Combination, holders of the Warrants shall have the right, during the
period beginning on the 91
st
day after the closing of the Business Combination and ending upon such post-effective amendment
or registration statement being declared effective by the SEC, and during any other period after such date of effectiveness when
the Company shall fail to have maintained an effective registration statement covering the Ordinary Shares issuable upon exercise
of the Warrants, to exercise such Warrants on a “cashless basis” as determined in accordance with Section 3.3.1(d).
The Company shall provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with
securities law experience) stating that (i) the issuance of Ordinary Shares upon exercise of the Warrants on a cashless basis in
accordance with this Section 7.4 is not required to be registered under the Act and (ii) the Ordinary Shares issued upon such exercise
will be freely tradable under U.S. federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144
under the Act) of the Company and, accordingly, will not be required to bear a restrictive legend. For the avoidance of any doubt,
unless and until all of the Warrants have been exercised on a cashless basis, the Company shall continue to be obligated to comply
with its registration obligations under the first three sentences of this Section 7.4. The provisions of this Section 7.4 may not
be modified, amended or deleted without the prior written consent of EBC.
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 Ordinary Shares 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 at the Company’s
cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing
under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and
State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination
by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder,
without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall
execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2.
Notice
of Successor Warrant Agent
. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the transfer agent for the Ordinary Shares 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 Agreement without any further act.
8.3.
Fees
and Expenses of Warrant Agent
.
8.3.1.
Remuneration
.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse
the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2.
Further
Assurances
. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for
the carrying out or performing of the provisions of this 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 Chairman of the Board 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 Agreement.
8.4.2.
Indemnity
.
The Warrant Agent shall be liable hereunder only for its own gross 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 Agreement except as a result of the Warrant
Agent’s gross negligence, willful misconduct, or bad faith.
8.4.3.
Exclusions
.
The Warrant Agent shall have no responsibility with respect to the validity of this 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 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 Ordinary Shares to be issued pursuant to this Agreement or any Warrant
or as to whether any Ordinary Shares 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 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 Ordinary Shares
through the exercise of Warrants.
8.6
Waiver
.
The Warrant Agent hereby waives any right of set-off or any other 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 Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
9.2.
Notices
.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder
of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by
certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent), as follows:
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
Attn: Chief Executive Officer
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when
so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit
of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as
follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Compliance Department
with a copy in each case to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: David Alan Miller, Esq.
and
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Robert J. Mittman, Esq.
and
EarlyBirdCapital, Inc.
366 Madison Avenue, 8th Floor
New York, New York 10017
Attn: David M. Nussbaum, Chairman
9.3.
Applicable
Law
. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all
respects by the laws of the State of New York, without giving effect to 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 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 inconvenience 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. The Company hereby appoints, without power of revocation, Graubard Miller 405 Lexington Avenue New York, New
York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller, Esq., as its agent to accept and acknowledge on its behalf service
of any and all process which may be served in any arbitration, action, proceeding or counterclaim in any way relating to or arising
out of this Agreement. The Company further agrees to take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect until the Warrants expire.
9.4.
Persons
Having Rights under this Agreement
. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto
and the registered holders of the Warrants and, for the purposes of Sections 2.5, 6.4, 7.4, 9.4 and 9.8 hereof, EBC, any right,
remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. EBC shall be deemed to be a third-party beneficiary of this Agreement with respect to Sections 2.5, 6.4, 7.4, 9.4 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 EBC with respect to the Sections 2.5, 6.4, 7.4, 9.4 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 Agreement may be executed in any number of original or facsimile 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 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 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 or vote of 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 pursuant to Sections 3.1 and 3.2, respectively, without the consent of the registered holders.
The provisions of this Section 9.8 may not be modified, amended or deleted without the prior written consent of EBC.
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.
IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the day and year first above written.
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
Exhibit 5.1
Our
ref
MSJ/705889-000001/38592784v1
Andina Acquisition
Corp. II
PO Box 309
Ugland House
Grand Cayman
KY1-1104
Cayman Islands
3
November
2015
Dear
Sirs
Andina
Acquisition Corp. II (the "Company")
We
have acted as Cayman Islands counsel to the Company to provide this legal opinion in connection with the
Company's registration statement on Form S-1, including all amendments or supplements thereto, filed with the United States
Securities and Exchange Commission (the "
Commission
") under the United States Securities Act of 1933
(the "
Act
"), as amended, (File No. 333-207037) (including its exhibits, the
"
Registration Statement
") related to the offering and sale of (i) up to 4,000,000 units (the
"
Units
"), each Unit consisting of one ordinary share of the Company, par value $0.0001 per share (each an
"
Ordinary Share
" and together, the "
Ordinary Shares
"), one right to receive one-seventh
(1/7) of an ordinary share on the consummation of an initial business combination (the "
Rights
") and one
warrant to purchase one half of one Ordinary Share (the "Warrants"); (ii) up to 600,000 Units (the "
Over-Allotment
Units
"), which the underwriters, for whom EarlyBirdCapital, Inc. is acting as representative
("
Representative
"), will have a right to purchase from the Company to cover over allotments, if any; (iii)
up to 400,000 Units (the "
Purchase Option Units
") which the Representative and/or its designees will have
the right to purchase; (iv) all Ordinary Shares and all Rights and all Warrants issued as part of the Units and the
Over-Allotment Units and the Purchase Option Units; and (iv) all Ordinary Shares that may be issued upon conversion of the
Rights and upon exercise of the Warrants included in the Units and the Over-Allotment Units and the Purchase Option Units.
This opinion is given in accordance with the terms of the Legal Matters section of the Registration Statement.
We
have reviewed originals, copies, drafts or conformed copies of the following documents:
|
|
1.1
|
the
Certificate of Incorporation dated 1 July 2015 and the Memorandum and Articles of Association
of the Company as registered on 1 July 2015 (the "
Memorandum and Articles
")
and the Memorandum and Articles of Association of the Company adopted by Special Resolution
passed on 18 October 2015 and effective immediately prior to the closing of the Company's
initial public offering;
|
|
|
1.2
|
The
written resolutions of the board of directors of the Company dated 18 October 2015 (together,
the "
Resolutions
") and the corporate records of the Company maintained
at its registered office in the Cayman Islands;
|
|
|
1.3
|
a
Certificate of Good Standing issued by the Registrar of Companies in the Cayman Islands
(the "
Certificate of Good Standing
");
|
|
|
1.4
|
a
certificate from a director of the Company a copy of which is attached hereto (the "
Director's
Certificate
");
|
|
|
1.5
|
the
Registration Statement;
|
|
|
1.6
|
a
draft of the form of the unit certificate representing the Units and the Over-Allotment
Units and the Purchase Option Units (the "
Unit Certificates
");
|
|
|
1.7
|
a
draft of the form of the rights agreement and the right certificate constituting the
Rights (the "
Rights Documents
"); and
|
|
|
1.8
|
a
draft of the form of the warrant agreement and the warrant certificate constituting the
Warrants (the "
Warrant Documents
");
|
|
|
1.9
|
a
draft of the underwriting agreement between the Company and EarlyBirdCapital, Inc., as
representative of the underwriters (the "
Underwriting Agreement
" and,
together with the Unit Certificates and the Rights Documents and the Warrant Documents, the "
Documents
").
|
The
following opinion is given only as to, and based on, circumstances and matters of fact existing and known to us on the date of
this opinion. This opinion only relates to the laws of the Cayman Islands which are in force on the date of this opinion. In giving
this opinion we have relied (without further verification) upon the certifications as to matters of fact contained in the Director’s
Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have not independently
verified:
|
|
2.1
|
other
than in respect of the Company under the laws of the Cayman Islands, the Documents have
been or will be authorised and duly executed and unconditionally delivered by or on behalf
of all relevant parties in accordance with all relevant laws;
|
|
|
2.2
|
the
Documents are, or will be, legal, valid, binding and enforceable against all relevant
parties in accordance with their terms under the laws of the State of New York and all
other relevant laws (other than the laws of the Cayman Islands);
|
|
|
2.3
|
the
choice of the laws of the State of New York as the governing law of the Documents has
been made in good faith and would be regarded as a valid and binding selection which
will be upheld by the courts of the State of New York and any other relevant jurisdiction
(other than the Cayman Islands) as a matter of the laws of the State of New York and
all other relevant laws (other than the laws of the Cayman Islands);
|
|
|
2.4
|
copy
documents, conformed copies or drafts of documents provided to us are true and complete
copies of, or in the final forms of, the originals;
|
|
|
2.5
|
all
signatures, initials and seals are genuine;
|
|
|
2.6
|
The
Company will receive money or money's worth in consideration for the issue of the Ordinary
Shares, and none of the Ordinary Shares were or will be issued for less than par value;
|
|
|
2.7
|
other
than in respect of the Company under the laws of the Cayman Islands, the power, authority
and legal right of all parties under all relevant laws and regulations to enter into,
execute, deliver and perform their respective obligations under the Documents;
|
|
|
2.8
|
no
invitation has been or will be made by or on behalf of the Company to the public in the
Cayman Islands to subscribe for any of the Units, the Over-Allotment Units, the Purchase
Option Units, the Rights, the Warrants or the Ordinary Shares;
|
|
|
2.9
|
no
monies paid to or for the account of any party under the Documents represent or will
represent criminal property or terrorist property (as defined in the Proceeds of Crime
Law 2008, and the Terrorism Law (2015 Revision), respectively); and
|
|
|
2.10
|
there
is nothing under any law (other than the law of the Cayman Islands) which would or might
affect the opinions hereinafter appearing. Specifically, we have made no independent
investigation of the laws of the State of New York.
|
Based
upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations
as we deem relevant, we are of the opinion that:
|
|
3.1
|
The
Company has been duly incorporated and is validly existing and in good standing under
the laws of the Cayman Islands.
|
|
|
3.2
|
The
Ordinary Shares to be offered and issued by the Company as contemplated by the Registration
Statement (including the issuance of the Ordinary Shares upon the conversion of the Rights
in accordance with the Rights Documents) have been duly authorised for issue, and when
issued by the Company against payment in full of the consideration as set out in the
Registration Statement and in accordance with the terms set out in the Registration Statement
(including the issuance of the Ordinary Shares upon the exercise of the Warrants in accordance with the Warrant Documents and
upon the conversion of the Rights in accordance with the Rights Documents), such
Ordinary Shares will be validly issued, fully paid and non-assessable. As a matter
of Cayman Islands law, a share is only issued when it has been entered in the
register of members (shareholders).
|
|
|
3.3
|
The
execution, delivery and performance of the Rights Documents and Warrant Documents has been authorised by and
on behalf of the Company and, once the Rights Documents and Warrant Documents have been executed and delivered
by any director or officer of the Company, the Rights Document and Warrant Documents will be duly executed
and delivered on behalf of the Company and will constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms.
|
The
opinions expressed above are subject to the following qualifications:
|
|
4.1
|
The
term "
enforceable
" as used above means that the obligations assumed
by the Company under the Documents are of a type which the courts of the Cayman Islands
will enforce. It does not mean that those obligations will necessarily be enforced in
all circumstances in accordance with their terms. In particular:
|
|
|
4.1.1
|
enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of
debts or moratorium or other laws of general application relating to or affecting the
rights of creditors;
|
|
|
4.1.2
|
enforcement
may be limited by general principles of equity. For example, equitable remedies such
as specific performance may not be available, inter alia, where damages are considered
to be an adequate remedy;
|
|
|
4.1.3
|
where
obligations are to be performed in a jurisdiction outside the Cayman Islands, they may
not be enforceable in the Cayman Islands to the extent that performance would be illegal
under the laws of that jurisdiction;
|
|
|
4.1.4
|
some
claims may become barred under the statutes of limitation or may be or become subject
to defences of set off, counterclaim, estoppel and similar defences;
|
|
|
4.1.5
|
arrangements
that constitute penalties will not be enforceable;
|
|
|
4.1.6
|
enforcement
may be prevented by reason of fraud, coercion, duress, undue influence, misrepresentation,
public policy or mistake or limited by the doctrine of frustration of contracts; and
|
|
|
4.1.7
|
provisions
imposing confidentiality obligations may be overridden by compulsion of applicable law
or the requirements of legal and/or regulatory process;
|
|
|
4.2
|
To
maintain the Company in good standing under the laws of the Cayman Islands, annual filing
fees must be paid and returns made to the Registrar of Companies.
|
Under
Cayman Islands law, the register of members (shareholders) is
prima facie
evidence of title to shares and this register
would not record a third party interest in such shares. However, there are certain limited circumstances where an application
may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position.
Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified
where it considers that the register of members does not reflect the correct legal position. As far as we are aware, such applications
are rarely made in the Cayman Islands, but if such an application were made in respect of the Company's Ordinary Shares, then
the validity of such shares may be subject to re-examination by a Cayman Islands court.
Except
as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with
respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial
terms of the transactions the subject of this opinion.
In
this opinion, the phrase "non-assessable" means, with respect to the Ordinary Shares in the Company, that a shareholder
shall not, solely by virtue of its status as a shareholder, be liable for additional assessments or calls on the Ordinary Shares
by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment of an agency
relationship or an illegal or improper purpose or other circumstance in which a court may be prepared to pierce or lift the corporate
veil).
We
hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under
the heading "Legal Matters" in the prospectus included in the Registration Statement. In providing our consent, we do
not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Commission thereunder.
This opinion
is addressed to you and may be relied upon by you, your counsel and purchasers of Units pursuant to the Registration Statement.
This opinion is limited to the matters detailed herein and is not to be read as an opinion with respect to any other matter.
Yours
faithfully
/s/
Maples and Calder
Maples and Calder
Andina Acquisition Corp. II
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
3
November 2015
TO
:
Maples and
Calder
PO Box 309,
Ugland House
Grand Cayman
KY1-1104
Cayman Islands
Dear
Sirs
Andina
Acquisition Corp. II
(the "
Company
")
I,
B. Luke Weil, being a director of the Company, am aware that you are being asked to provide a legal opinion (the "
Opinion
")
in relation to certain aspects of Cayman Islands law. Capitalised terms used in this certificate have the meaning given to them
in the Opinion. I hereby certify that:
|
|
1
|
The
Memorandum and Articles remain in full force and effect and are unamended.
|
|
|
2
|
The
Company has not entered into any mortgages or charges over its property or assets other
than those entered in the register of mortgages and charges.
|
|
|
3
|
The
Resolutions were duly passed in the manner prescribed in the Memorandum and Articles
(including, without limitation, with respect to the disclosure of interests (if any)
by directors of the Company) and have not been amended, varied or revoked in any respect.
|
|
|
4
|
The
authorised share capital of the Company is US$10,100 divided into 100,000,000 shares
of a par value of US$0.0001 each and 1,000,000 preferred shares of a par value US$0.0001
each. The issued share capital of the Company is 1,150,000 ordinary shares of US$0.0001
par value each, which have been issued and are fully paid up.
|
|
|
5
|
The
shareholders of the Company have not restricted or limited the powers of the directors
in any way. There is no contractual or other prohibition (other than as arising under
Cayman Islands law) binding on the Company prohibiting it from entering into and performing
its obligations under the Documents or the Registration Statement and any documents in
connection therewith.
|
|
|
6
|
The
directors of the Company at the date of the Resolutions and at the date hereof were and
are as follows: Julio A. Torres, Mauricio Orellana, B. Luke Weil, Matthew S. N. Kibble
and Edward G. Navarro.
|
|
|
7
|
The
minute book and corporate records of the Company as maintained at its registered office
in the Cayman Islands and made available to you are complete and accurate in all material
respects,
and all minutes and resolutions filed therein represent a complete and accurate record of all meetings of the shareholders and
directors (or any committee thereof) of the Company (duly convened in accordance with the Articles of Association of the Company)
and all resolutions passed at the meetings or passed by written resolution or consent, as the case may be.
|
|
|
8
|
Prior
to, at the time of, and immediately following the approval of the transactions the subject
of the Registration Statement the Company was, or will be, able to pay its debts as they
fell, or fall, due and has entered, or will enter, into the transactions the subject
of the Registration Statement for proper value and not with an intention to defraud or
hinder its creditors or by way of fraudulent preference.
|
|
|
9
|
Each
director considers the transactions contemplated by the Registration Statement to be
of commercial benefit to the Company and has acted bona fide in the best interests of
the Company, and for a proper purpose of the Company, in relation to the transactions
which are the subject of the Opinion.
|
|
|
10
|
To
the best of my knowledge and belief, having made due inquiry, the Company is not the
subject of legal, arbitral, administrative or other proceedings in any jurisdiction.
Nor have the directors or shareholders taken any steps to have the Company struck off
or placed in liquidation, nor have any steps been taken to wind up the Company. Nor has
any receiver been appointed over any of the Company's property or assets.
|
|
|
11
|
To
the best of my knowledge and belief, having made due inquiry, there are no circumstances
or matters of fact existing which may properly form the basis for an application for
an order for rectification of the register of members of the Company.
|
|
|
12
|
The
Company is not a central bank, monetary authority or other sovereign entity of any state.
|
|
|
13
|
The
Registration Statement has been, or will be, authorised and duly executed and delivered
by or on behalf of all relevant parties in accordance with all relevant laws.
|
|
|
14
|
No
invitation has been or will be made by or on behalf of the Company to the public in the
Cayman Islands to subscribe for any of the Ordinary Shares.
|
|
|
15
|
The
Ordinary Shares to be issued pursuant to the Registration Statement have been, or will
be, duly registered, and will continue to be registered, in the Company's register of
members (shareholders).
|
I
confirm that you may continue to rely on this certificate as being true and correct on the day that you issue the Opinion unless
I shall have previously notified you personally to the contrary.
|
Signature:
|
/s/ B. Luke
Weil
|
|
|
|
|
|
|
|
B. Luke Weil
|
|
|
|
Director
|
|
|
|
|
|
Exhibit
5.2
GRAUBARD
MILLER
The
Chrysler Building
405
Lexington Avenue
New
York, New York 10174
November
6, 2015
Andina Acquisition
Corp. II
250 West
57th St
Suite 2223
New York,
NY 10107
Dear Sirs:
Reference
is made to the Registration Statement on Form S-1 (“Registration Statement”) filed by Andina Acquisition Corp. II
(the “Company”), a Cayman Islands exempted company, under the Securities Act of 1933, as
amended (“Act”), covering (i) 4,000,000 units (the “Firm Units”), each unit consisting of one
ordinary share of the Company, par value $.0001 per share (the “Ordinary Shares”), one right
(“Right”) to receive one-seventh of an Ordinary Share upon the occurrence of certain events and one warrant
("Warrant") to purchase one-half of one share, representing a total of 4,000,000 Ordinary Shares, 4,000,000 Rights
(entitling the holders to receive an aggregate of 571,429 Ordinary Shares) and 4,000,000 Warrants, which the Company will
sell to EarlyBirdCapital, Inc. acting as representative of the several underwriters (“Underwriters”), (ii)
600,000 units (the “Over-Allotment Units”), each unit identical to the units in the Firm Units, representing a
total of 600,000 Ordinary Shares and 600,000 Rights (entitling the holders to receive an aggregate of 85,714 Ordinary
Shares), which the Underwriters will have a right to purchase from the Company to cover over-allotments, if any, (iii) all of
the Ordinary Shares and Rights and Warrants included in the Firm Units and Over-Allotment Units and (iv) all of the Ordinary
Shares issuable to the holders of the Rights and Warrants in the Firm Units and Over-Allotment Units.
We
have examined such documents and considered such legal matters as we have deemed necessary and relevant as the basis for the opinion
set forth below. With respect to such examination, we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of all documents submitted to us as reproduced or
certified copies, and the authenticity of the originals of those latter documents. As to questions of fact material to this opinion,
we have, to the extent deemed appropriate, relied upon certain representations of certain officers and employees of the Company.
Based
upon the foregoing, we are of the opinion that:
1. The
Firm Units and Over-Allotment Units, when duly executed, issued and delivered against payment therefor in accordance with and
in the manner described in the Registration Statement, will constitute legal, valid and binding obligations of the Company under
the laws of the State of New York, enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable
remedies.
2. The
Rights and Warrants included in the Firm Units and Over-Allotment Units, when duly executed in accordance with the
Rights Agreement and Warrant Agreement, respectively, and issued and delivered against payment therefor in accordance with
and in the manner described in the Registration Statement, will constitute legal, valid and binding obligations of the
Company under the laws of the State of New York, enforceable against it in accordance with its terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement
of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
We
hereby consent to the use of this opinion as an exhibit to the Registration Statement, to the use of our name as your counsel
and to all references made to us in the Registration Statement and in the Prospectus forming a part thereof. In giving this consent,
we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the
rules and regulations promulgated thereunder.
|
|
Very truly yours,
|
|
|
|
|
|
/s/ Graubard Miller
|
Exhibit 10.1
______________________, 2015
Andina
Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
EarlyBirdCapital,
Inc.
275
Madison Avenue, 27th Floor
New
York, New York 10016
Re:
Initial
Public Offering
Gentlemen:
This letter
is being delivered to you in accordance with the Underwriting Agreement (the “
Underwriting
Agreement
”) entered into by and between Andina Acquisition Corp. II, a Cayman Islands Company (the
“
Company
”), and EarlyBirdCapital, Inc., as representative (the
“
Representative
”) of the several Underwriters named in Schedule I thereto (the
“
Underwriters
”), relating to an underwritten initial public offering (the
“
IPO
”) of the Company’s units (the “
Units
”), each comprised of one
ordinary share of the Company, par value $0.0001 per share (the “
Ordinary Shares
”), one right
(“
Right
”) to receive one-seventh of one Ordinary Share upon consummation of the Company’s
initial Business Combination and one warrant ("Warrant") to purchase one-half of one Ordinary Share. Certain capitalized terms used herein are defined in paragraph 15 hereof.
In order to induce
the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in recognition of the
benefit that such IPO will confer upon the undersigned as a shareholder of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees with the Company as follows:
1. If the Company solicits approval
of its shareholders of a Business Combination, the undersigned will vote all Ordinary Shares beneficially owned by him, whether
acquired before, in or after the IPO, in favor of such Business Combination.
2. (a) In the event that the Company
fails to consummate a Business Combination within the required time period set forth in the Company’s Memorandum and Articles
of Association as the same may be amended from time to time, the undersigned shall take all reasonable steps to (i) cause the Trust
Fund to be liquidated and distributed to the holders of IPO Shares and (ii) cause the Company to liquidate as soon as reasonably
practicable.
(b) The undersigned hereby waives
any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets
of the Company as a result of such liquidation with respect to any Insider Shares or Private Units beneficially owned by the undersigned
(“
Claim
”) and hereby waives any Claim the undersigned may have in the future as a result of, or arising
out of, any contracts or agreements with the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned acknowledges and agrees that there will be no distribution from the Trust Fund with respect to any Rights, all
of which will terminate on the Company’s liquidation.
(c) [In the event of the liquidation
of the Trust Fund, the undersigned agrees to indemnify and hold harmless the Company against any and all loss, liability, claims,
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, whether pending or threatened, or any claim whatsoever) which the Company may become
subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products
sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim,
damage or expense does not reduce the amount of funds in the Trust Fund;
provided
that such indemnity shall not apply if
such vendor or prospective target business executes an agreement waiving any claims against the Trust Fund.]
1
3. The undersigned will escrow all
of his/her/its Insider Shares pursuant to the terms of a Share Escrow Agreement which the Company will enter into with the undersigned
and an escrow agent acceptable to the Company.
4. Intentionally Omitted.
5. In order to minimize potential
conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration,
prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of
the consummation by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary
and contractual obligations the undersigned might have.
6. The undersigned acknowledges
and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the
Company or their affiliates, such transaction must be approved by a majority of the Company’s disinterested independent directors
and the Company must obtain an opinion from an unaffiliated, independent investment banking firm, or another independent entity
that commonly renders valuation opinions on the type of target business that the Company is seeking to acquire, that such Business
Combination is fair to the Company’s unaffiliated shareholders from a financial point of view.
1
Luke Weil Insider
Letter Only
7. Neither the undersigned, any
family member of the undersigned, nor any affiliate of the undersigned will be entitled to receive and will not accept any compensation
or other cash payment for services rendered prior to, or in order to effectuate, the consummation of the Business Combination;
provided
that the Company shall be allowed to pay for the items described in the Registration Statement under the section
titled “Prospectus Summary – The Offering – Limited Payments to Insiders.”
8. Neither the undersigned, any
family member of the undersigned, nor any affiliate of the undersigned will be entitled to receive or accept a finder’s fee
or any other compensation in the event the undersigned, any member of the family of the undersigned or any affiliate of the undersigned
originates a Business Combination.
9. The undersigned agrees to be
the _________________ of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation
of the Company. The undersigned’s biographical information previously furnished to the Company and the Representative is
true and accurate in all material respects, does not omit any material information with respect to the undersigned’s biography.
The undersigned’s FINRA Questionnaire previously furnished to the Company and the Representative is true and accurate in
all material respects. The undersigned represents and warrants that:
|
|
(a)
|
he has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) him
or any partnership in which he was a general partner at or within two years before the time of filing; or (ii) any corporation
or business association of which he was an executive officer at or within two years before the time of such filing;
|
|
|
(b)
|
he has never had a receiver, fiscal agent or similar officer been appointed by a court for his business or property, or any
such partnership;
|
|
|
(c)
|
he has never been convicted of fraud in a civil or criminal proceeding;
|
|
|
(d)
|
he/ has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic
violations and minor offenses);
|
|
|
(e)
|
he has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court
of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him from (i) acting as a futures commission
merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant,
any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct
or practice in connection with any such activity; or (ii) engaging in any type of business practice; or (iii) engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal
or state securities or federal commodities laws;
|
|
|
(f)
|
he has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal
or state authority barring, suspending or otherwise limiting for more than 60 days his right to engage in any activity described
in 9(e)(i) above, or to be associated with persons engaged in any such activity;
|
|
|
(g)
|
he has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or
state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended
or vacated;
|
|
|
(h)
|
he has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal
commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or
vacated;
|
|
|
(i)
|
he has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or
finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities
or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including,
but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary
or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud
or fraud in connection with any business entity;
|
|
|
(j)
|
he has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any
self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a member;
|
|
|
(k)
|
he has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii)
involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities;
|
|
|
(l)
|
he was never subject to a final order of a state securities commission (or an agency of officer of a state performing like
functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission
(or an agency or officer of a state performing like functions); an appropriate federal banking agency; the Commodity Futures Trading
Commission; or the National Credit Union Administration that is based on a violation of any law or regulation that prohibits fraudulent,
manipulative, or deceptive conduct;
|
|
|
(m)
|
he has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such
sale, restrained or enjoined him from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase
or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of
securities;
|
|
|
(n)
|
he has never been subject to any order of the SEC that orders him to cease and desist from committing or causing a future violation
of: (i) any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1)
of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(1) of the Advisers Act or any
other rule or regulation thereunder; or (ii) Section 5 of the Securities Act;
|
|
|
(o)
|
he has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC
that was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject
of an investigation or proceeding to determine whether a stop order or suspension order should be issued;
|
|
|
(p)
|
he has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary
restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a
scheme or device for obtaining money or property through the mail by means of false representations;
|
|
|
(q)
|
he is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions);
a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an
agency or officer of a state performing like functions); an appropriate federal banking agency; the Commodity Futures Trading Commission;
or the National Credit Union Administration that bars the undersigned from: (i) association with an entity regulated by such commission,
authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association
or credit union activities;
|
|
|
(r)
|
he is not subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934
(the “Exchange Act”) or section 203(e) or 203(f) of the Investment Advisers Act of 1940 (the “Advisers Act”)
that: (i) suspends or revokes the undersigned’s registration as a broker, dealer, municipal securities dealer or investment
adviser; (ii) places limitations on the activities, functions or operations of, or imposes civil money penalties on, such person;
or (iii) bars the undersigned from being associated with any entity or from participating in the offering of any penny stock; and
|
|
|
(s)
|
he has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities
self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated securities
association) for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.
|
10. The undersigned has full right
and power, without violating any agreement by which he is bound, to enter into this letter agreement and to serve as ________________
of the Company.
11. The undersigned hereby waives
his right to exercise conversion rights with respect to any Ordinary Shares owned or to be owned by the undersigned, directly or
indirectly, whether purchased by the undersigned prior to the IPO, in the IPO or in the aftermarket, and agrees that he will not
seek conversion with respect to or otherwise sell, such shares in connection with any vote to approve a Business Combination with
respect thereto.
12. The undersigned hereby agrees
to not propose, or vote in favor of, an amendment to the Company’s Memorandum and Articles of Association with respect to
the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company
provides dissenting public shareholders with the opportunity to convert their shares in connection with any such vote.
13. [In the event that the Company
does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient to complete such liquidation,
the undersigned agrees to advance such funds necessary to complete such liquidation and agrees not to seek repayment for such expenses.]
2
14. This letter 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 undersigned hereby
(i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this letter agreement (a “
Proceeding
”)
shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to
such exclusive jurisdiction and that such courts represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard
Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service
of process in any Proceeding.
15. As used herein, (i) a “
Business
Combination
” shall mean a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization
or other similar business combination with one or more businesses or entities; (ii) “
Insiders
” shall
mean all officers, directors and shareholders of the Company immediately prior to the IPO; (iii) “
Insider Shares
”
shall mean all of the Ordinary Shares of the Company acquired by an Insider prior to the IPO; (iv) “
IPO Shares
”
shall mean the Ordinary Shares issued in the Company’s IPO; (v) “
Private Units
” shall mean (x)
the Units purchased in the private placement taking place simultaneously with the consummation of the Company’s IPO and (y)
the additional Units that will be purchased in a private placement upon the full or partial exercise of the underwriter’s
over-allotment option for the Company’s IPO; (vi) “
Memorandum and Articles of Association
” shall
mean the Company’s memorandum and articles of association, as the same may be amended and restated from time to time; (vii)
“
Registration Statement
” means the registration statement on Form S-1 filed by the Company with respect
to the IPO; and (viii) “
Trust Fund
” shall mean the trust fund into which a portion of the net proceeds
of the Company’s IPO will be deposited.
2
Luke
Weil Insider Letter Only
16. Any notice, consent or request
to be given in connection with any of the terms or provisions of this letter 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 facsimile transmission.
17. No
party hereto may assign either this letter agreement or any of its rights, interests, or obligations hereunder without the prior
written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and
shall not operate to transfer or assign any interest or title to the purported assignee. This letter agreement shall be binding
on the parties hereto and any successors and assigns thereof.
18. The undersigned acknowledges
and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein
in proceeding with the IPO.
|
|
|
|
|
|
|
Print Name of Insider
|
|
|
|
|
|
|
|
|
Signature
|
|
|
Exhibit 10.2
INVESTMENT
MANAGEMENT TRUST AGREEMENT
This
Agreement is made as of ______________, 2015 by and between Andina Acquisition Corp. II (the “Company”) and Continental
Stock Transfer & Trust Company (“Trustee”).
WHEREAS,
the Company’s registration statement on Form S-1, No. 333-207037 (“Registration Statement”) for its initial
public offering of securities (“IPO”) has been declared effective as of the date hereof (“Effective Date”)
by the Securities and Exchange Commission (capitalized terms used herein and not otherwise defined shall have the meanings set
forth in the Registration Statement); and
WHEREAS,
EarlyBirdCapital, Inc. (“EarlyBirdCapital”) is acting as the representative of the underwriters in the IPO; and
WHEREAS,
as described in the Registration Statement, and in accordance with the Company’s Amended and Restated Memorandum and
Articles of Association, $40,600,000 of the gross proceeds of the IPO ($46,690,000 if the over-allotment option is exercised
in full) and the net proceeds of a private placement of $3,100,000 ($3,385,000 if the over-allotment option is exercised in
full) taking place simultaneously therewith will be delivered to the Trustee to be deposited and held in a trust account for
the benefit of the Company and the holders of the Company’s ordinary shares, par value $.0001 per share
(“Ordinary Shares”), issued in the IPO as hereinafter provided (the proceeds to be delivered to the Trustee will
be referred to herein as the “Property”; the shareholders for whose benefit the Trustee shall hold the Property
will be referred to as the “Public Shareholders,” and the Public Shareholders and the Company will be referred to
together as the “Beneficiaries”); and
WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee
shall hold the Property;
IT
IS AGREED:
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 in a segregated trust account (“Trust
Account”) established by the Trustee at JP Morgan Chase Bank, NA in the United States, maintained by Trustee, and at a brokerage
institution selected by the Trustee that is reasonably satisfactory to the Company;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c) In
a timely manner, upon the instruction of the Company, invest and reinvest the Property (i) in United States government treasury
bills, notes or bonds having a maturity of 180 days or less and/or (ii) in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and that invest solely in U.S. treasuries, as determined
by the Company;
(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) Notify
the Company and EarlyBirdCapital 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
its tax returns;
(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 to do so;
(h) Render
to the Company monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements
of the Trust Account; and
(i) 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,
signed on behalf of the Company by its President, Chief Executive Officer or Vice President and Secretary or Assistant Secretary,
affirmed by counsel for the Company and, in the case of a Termination Letter in a form substantially similar to that attached
hereto as Exhibit A, acknowledged and agreed to by EarlyBirdCapital, 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 within the period of time provided in
the Company’s Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time
(“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 Public Shareholders as of the Last Date. The provisions of this Section
1(i) may not be modified, amended or deleted under any circumstances.
(j) Distribute
upon receipt of an Amendment Notification Letter (defined below), to Public Shareholders who exercised their conversion rights
in connection with an Amendment (defined below) an amount equal to the pro rata share of the Property relating to the Ordinary
Shares for which such Public Shareholders have exercised conversion rights in connection with such Amendment.
2.
Limited
Distributions of Income from Trust Account
.
(a) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit C, the Trustee shall distribute to the Company the amount of interest income earned on the Trust Account requested
by the Company to cover any income or other tax obligation owed by the Company as a result of such interest income.
(b) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D, the Trustee shall distribute to the Company the amount of interest income earned on the Trust Account requested
by the Company to cover expenses related to investigating and selecting a target business and other working capital requirements;
provided, however, that the Company will not be allowed to withdraw interest income earned on the Trust
A
ccount
unless there is an amount of interest income available in the Trust Account sufficient to pay the Company’s tax obligations
on such interest income.
(c) The
limited distributions referred to in Sections 2(a) and 2(b) above shall be made only from income collected on the Property. Except
as provided in Section 2(a), and 2(b) above, no other distributions from the Trust Account shall be permitted except in accordance
with Section 1(i) hereof.
(d) The
Company shall provide EarlyBirdCapital with a copy of any Termination Letters and/or any other correspondence that it issues to
the Trustee with respect to any proposed withdrawal from the Trust Account promptly after such issuance.
3.
Agreements
and Covenants of the Company
. The Company hereby agrees and covenants to:
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, Vice Chairman of the
Board, Chief Executive Officer, President or Chief Financial Officer. In addition, except with respect to its duties under paragraphs
1(i), 2(a) and 2(b) above, 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 shall promptly confirm such instructions in writing;
(b) Subject
to the provisions of Sections 5 and 7(g) of this Agreement, 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 claim, potential claim, 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;
(c) 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 any fees owed to the Trustee
shall be deducted by the Trustee from the disbursements made to the Company pursuant to Sections 1(i) solely in connection with
the consummation of a Business Combination, or 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;
(d) In
connection with any vote of the Company’s shareholders regarding a Business Combination, provide to the Trustee an affidavit
or certificate of a firm regularly engaged in the business of soliciting proxies and/or tabulating shareholder votes verifying
the vote of the Company’s shareholders regarding such Business Combination; and
(e) In
the event that the Company directs the Trustee to commence liquidation of the Trust Account pursuant to Section 1(i), the Company
agrees that it will not direct the Trustee to make any payments that are not specifically authorized by this Agreement.
(f) If
the Company seeks to amend any provisions of its amended and restated memorandum and articles of association relating to shareholders’
rights or pre-Business Combination activity (including the time within which the Company has to complete a Business Combination)
(in each case, an “Amendment”), the Company will provide the Trustee with a letter (an “Amendment Notification
Letter”) in the form of Exhibit E providing instructions for the distribution of funds to Public Shareholders who exercise
their conversion option in connection with such Amendment.
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 paragraphs 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 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 paragraph 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; and
(h) File
local, state and/or federal tax returns or information returns with any taxing authority on behalf of the Trust Account and payee
statements with the Company documenting the taxes, if any, payable by the Company or the Trust Account, relating to the income
earned on the Property.
(i) Pay
any taxes on behalf of the Trust Account (it being expressly understood that the Property shall not be used to pay any such taxes
and that such taxes, if any, shall be paid by the Company from funds not held in the Trust Account or released to it under Section
2(a) hereof).
(j) Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this agreement
and that which is expressly set forth herein.
(k) Verify
calculations, qualify or otherwise approve Company requests for distributions pursuant to Section 1(i), 2(a) or 2(b) above.
5.
Trust
Account Waiver
. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 3(b) or Section 3(c) hereof, the Trustee shall pursue such Claim solely against the Company
and its assets outside the Trust Account and not against the Property or any monies 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 act in accordance with this Agreement. At such time
that 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 that the Company does not locate a successor trustee within ninety days
of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with
any court in the State of New York or 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; or
(b) At
such time that the Trustee has completed the liquidation of the Trust Account in accordance with the provisions of paragraph 1(i)
hereof, and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate
except with respect to Paragraph 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 all information supplied to it by the Company, including account names, account numbers
and all other identifying information relating to a beneficiary, beneficiary’s bank or intermediary bank. The Trustee shall
not be liable for any loss, liability or expense resulting from any error in the information or transmission of the wire.
(b) In
connection with Section 5-1401 of the General Obligations Law of the State of New York, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that would result
in the application of the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding or claim
arising out of or relating in any way to this Agreement shall be resolved through final and binding arbitration in accordance
with the International Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be
brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York, will be conducted
in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator
panel’s decision shall be final and enforceable by any court having jurisdiction over the party from whom enforcement is
sought. The cost of such arbitrators and arbitration services, together with the prevailing party’s legal fees and expenses,
shall be borne by the non-prevailing party or as otherwise directed by the arbitrators. The Company hereby appoints, without power
of revocation, Graubard Miller 405 Lexington Avenue New York, New York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller,
Esq., as their respective agent to accept and acknowledge on its behalf service of any and all process which may be served in
any arbitration, action, proceeding or counterclaim in any way relating to or arising out of this Agreement. The Company further
agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force
and effect for a period of seven years from the date of this Agreement. This Agreement may be executed in several original or
facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
(c) This
Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. Except
for Section 1(i) (which may not be amended under any circumstances), 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 EarlyBirdCapital. As to any claim, cross-claim or counterclaim in any way relating
to this Agreement, each party waives the right to trial by jury. The Trustee may require from Company counsel an opinion as to
the propriety of any proposed amendment.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, Borough of
Manhattan, for purposes of resolving any disputes hereunder.
(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:
Steven G. Nelson, Chairman, and Frank A. DiPaolo, CFO
Fax
No.: (212) 509-5150
if
to the Company, to:
Andina
Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
Attn:
Julio A. Torres, Chief Executive Officer
Fax
No.: (___) ___-____
in
either case with a copy (which copy shall not constitute notice) to:
EarlyBirdCapital,
Inc.
366
Madison Avenue
New
York, New York 10017
Attn:
General Counsel and Investment Banking Department
Facsimile:
(___) ___-____
and
Blank
Rome LLP
The
Chrysler Building
405
Lexington Avenue
New
York, New York 10174
Attn:
Robert J. Mittman, Esq.
Fax
No.: (212) 885-5001
(f) This
Agreement may not be assigned by the Trustee without the prior consent of the Company.
(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. In the event that the Trustee has a claim against the Company under this Agreement,
the Trustee will pursue such claim solely against the Company and not against the Property held in the Trust Account
(h) Each
of the Company and the Trustee hereby acknowledge that EarlyBirdCapital is a third party beneficiary of this Agreement.
[Signature
Page Follows]
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:
|
|
|
|
|
Name:
Frank A. Di Paolo
Title: Trust Officer
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
Title:
|
SCHEDULE
A
|
Fee
Item
|
Time
and method of payment
|
Amount
|
|
Initial
acceptance fee
|
Initial
closing of IPO by wire transfer
|
[$2,000]
|
|
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
|
[$10,000]
|
|
Transaction
processing fee for disbursements to Company under Section 2
|
Deduction
by Trustee from accumulated income following disbursement made to Company under Section 2
|
[$250]
|
|
Paying
Agent services as required pursuant to section 1(i)
|
Billed
to Company upon delivery of service pursuant to section 1(i)
|
Prevailing
rates
|
EXHIBIT
A
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
New
York, New York 10004
Attn:
Steven Nelson and Frank DiPaolo
Re:
Trust
Account No. - Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Andina Acquisition Corp. II (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of _______________, 2015 (“Trust Agreement”),
this is to advise you that the Company has entered into an agreement with [__________________] (“Target Business”)
to consummate a business combination with Target Business (“Business Combination”) on or about
[insert date]
.
The Company shall notify you at least 48 hours in advance of the actual date of the consummation of the Business Combination (“Consummation
Date”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Trust Agreement.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate the Trust Account investments on [__________]
and to transfer the proceeds to the above-referenced account at [
]
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
on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in the trust account awaiting distribution,
the Company will not earn any interest or dividends.
On
the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has
been consummated and (ii) the Company shall deliver to you (a) [an affidavit] [a certificate] of [__________________], which verifies
the vote of the Company’s shareholders in connection with the Business Combination if a vote is held and (b) joint written
instructions from the Company and EarlyBirdCapital, Inc. 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 distributed
after the Consummation Date to the Company. 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 from the Company, 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,
|
|
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Julio
A. Torres, Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Mauricio
Orellana, Chief Financial Officer
|
|
|
|
|
|
AGREED TO AND ACKNOWLEDGED BY
|
|
|
|
|
|
EARLYBIRDCAPITAL, INC.
|
|
|
|
|
|
|
|
|
By:
|
|
|
EXHIBIT
B
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven Nelson and Frank DiPaolo
Re:
Trust
Account No. - Termination Letter
Gentlemen:
Pursuant
to paragraph 1(i) of the Investment Management Trust Agreement between Andina Acquisition Corp. II (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of ______________, 2015 (“Trust Agreement”),
this is to advise you that the Company has been unable to effect a Business Combination with a Target Company within the time
frame specified in the Company’s Amended and Restated Memorandum and Articles of Association, as described in the Company’s
prospectus relating to its IPO. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the
Trust Agreement.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all the Trust Account investments on [______________]
and to transfer the total proceeds to the Trust Checking Account at [
]
to await distribution to the Public Shareholders.
The Company has selected [____________, 20__] as the record date for the purpose of determining the Public Shareholders entitled
to receive their share of the liquidation proceeds. It is acknowledged that no interest will be earned by the Company on the liquidation
proceeds while on deposit in the Trust Checking Account. You agree to be the Paying Agent of record and in your separate capacity
as Paying Agent, to distribute said funds directly to the Public Shareholders in accordance with the terms of the Trust Agreement
and the Amended and Restated Memorandum and Articles of Association of the Company. Upon the distribution of all the funds in
the Trust Account, your obligations under the Trust Agreement shall be terminated.
|
|
|
Very
truly yours,
|
|
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Julio
A. Torres, Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Mauricio
Orellana, Chief Financial Officer
|
cc:
EarlyBirdCapital, Inc.
EXHIBIT
C
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
New
York, New York 10004
Attn:
Frank Di Paolo and Cynthia Jordan
Re:
Trust
Account No.
Gentlemen:
Pursuant
to paragraph 2(a) of the Investment Management Trust Agreement between Andina Acquisition Corp. II (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of _____________, 2015 (“Trust Agreement”),
the Company hereby requests that you deliver to the Company [$_______] of the interest income earned on the Property as of the
date hereof. The Company needs such funds to pay for its tax obligations as a result of such interest income. In accordance with
the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon
your receipt of this letter to the Company’s operating account at:
[WIRE
INSTRUCTION INFORMATION]
|
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Julio
A. Torres, Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Mauricio
Orellana, Chief Financial Officer
|
cc:
EarlyBirdCapital, Inc.
EXHIBIT
D
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
New
York, New York 10004
Attn:
Frank Di Paolo and Cynthia Jordan
Re:
Trust
Account No.
Gentlemen:
Pursuant
to paragraph 2(b) of the Investment Management Trust Agreement between Andina Acquisition Corp. II (“Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of ________________, 2015 (“Trust Agreement”),
the Company hereby requests that you deliver to the Company [$_______] of the interest income earned on the Property as of the
date hereof. The Company needs such funds to cover its expenses relating to investigating and selecting a target business and
other working capital requirements. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized
to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account
at:
[WIRE
INSTRUCTION INFORMATION]
|
|
|
Very
truly yours,
|
|
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Julio
A. Torres, Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Mauricio
Orellana, Chief Financial Officer
|
cc:
EarlyBirdCapital, Inc.
EXHIBIT
E
[Letterhead
of Company]
[Insert
date]
Continental
Stock Transfer
&
Trust Company
17
Battery Place
New
York, New York 10004
Attn:
Steven Nelson and Frank DiPaolo
Re:
Trust
Account No. - Termination Letter
Gentlemen:
Reference
is made to the Investment Management Trust Agreement between Andina Acquisition Corp. II (“Company”) and Continental
Stock Transfer & Trust Company, dated as of ___________, 2015 (“Trust Agreement”). Capitalized words used herein
and not otherwise defined shall have the meanings ascribed to them in the Trust Agreement.
Pursuant
to Section 1(j) of the Trust Agreement, this is to advise you that the Company has sought an Amendment. Accordingly, in accordance
with the terms of the Trust Agreement, we hereby authorize you to liquidate the Trust Account on [ ] and to transfer $_____ of
the proceeds of the Trust to the checking account at [ ] for distribution to the shareholders that have requested conversion of
their shares in connection with such Amendment. The remaining funds shall be reinvested by you as previously instructed.
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
|
ANDINA
ACQUISITION CORP. II
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Julio
A. Torres, Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Mauricio
Orellana, Chief Financial Officer
|
cc:
EarlyBirdCapital, Inc.
STOCK
ESCROW AGREEMENT
STOCK
ESCROW AGREEMENT, dated as of _______________, 2015 (“Agreement”), by and among ANDINA ACQUISITION CORP. II, a
Cayman Islands exempted company (“Company”), Julio A. Torres, Mauricio Orellana, Eric Carrera, Marjorie
Hernandez, B. Luke Weil, Matthew S. N. Kibble, Edward G. Navarro, LWEH1 LLC, LWEH2 LLC, Nicholas Weil, A. Lorne Weil Ryan
Chang, Whitney Carlen Cox and Mendakota Casualty Company and Bob Goldstein (collectively “Initial Shareholders”)
and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).
WHEREAS,
the Company has entered into an Underwriting Agreement, dated as of __________, 2015 (“Underwriting Agreement”), with
EarlyBirdCapital, Inc. (“EBC”) acting as representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase 4,000,000 units (“Units”) of the
Company, plus an additional 600,000 Units if the Underwriters exercise their over-allotment option in full. Each Unit consists
of one ordinary share of the Company, par value $0.0001 per share (“Ordinary Shares”), and one right (“Right”)
to receive one-seventh of one Ordinary Share upon the Company’s initial business combination, all as more fully described
in the Company’s final Prospectus, dated _____________, 2015 (“Prospectus”), comprising part of the Company’s
Registration Statement on Form S-1 (File No. 333-207037) under the Securities Act of 1933, as amended (“Registration Statement”),
declared effective on _____________, 2015 (“Effective Date”).
WHEREAS,
the Initial Shareholders have agreed as a condition of the sale of the Units to deposit their Ordinary shares of the Company,
as set forth opposite their respective names in Exhibit A attached hereto (collectively “Escrow Shares”), in escrow
as hereinafter provided.
WHEREAS,
the Company and the Initial Shareholders desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed
as hereinafter provided.
IT
IS AGREED:
1.
Appointment
of Escrow Agent
. The Company and the Initial Shareholders 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 Shares
. On or prior to the date hereof, each of the Initial Shareholders delivered to the Escrow Agent certificates
representing such Initial Shareholder’s respective Escrow Shares, together with applicable share powers, to be held and
disbursed subject to the terms and conditions of this Agreement. Each of the Initial Shareholders acknowledges that the certificate
representing such Initial Shareholder’s Escrow Shares is legended to reflect the deposit of such Escrow Shares under this
Agreement.
3.
Disbursement
of the Escrow Shares
.
3.1 The
Escrow Agent shall hold the Escrow Shares during the period (the “Escrow Period”) commencing on the date hereof and
(i) for 50% of the Escrow Shares, ending on the earlier of (x) one year after the date of the consummation of the Company’s
initial business combination (as described in the Registration Statement, hereinafter a “Business Combination”) and
(y) the date on which the closing price of the Company’s Ordinary Shares equals or exceeds $12.50 per share (as adjusted
for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period
commencing after the Company’s initial Business Combination and (ii) for the remaining 50% of the Escrow Shares, ending
one year after the date of the consummation of an initial Business Combination. The Company shall promptly provide notice of the
consummation of a Business Combination to the Escrow Agent. Upon completion of the Escrow Period, the Escrow Agent shall disburse
such amount of each Initial Shareholder’s Escrow Shares (and any applicable share power) to such Initial Shareholder; 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 Shares;
provided further, however, that if, within one year after the Company consummates a Business Combination, the Company (or the
surviving entity) subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in
all of the shareholders of such entity having the right to exchange their Ordinary Shares for cash, securities or other property,
then the Escrow Agent will, upon receipt of a notice executed by the Chairman of the Board, Chief Executive Officer or other authorized
officer of the Company, in form reasonably acceptable to the Escrow Agent, certifying that such transaction is then being consummated
or such conditions have been achieved, as applicable, release the Escrow Shares to the Initial Shareholders. The Escrow Agent
shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section
3.
3.2 Notwithstanding
Section 3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 600,000 Units of the Company
in full within 45 days of the date of the Prospectus (as described in the Underwriting Agreement), the Initial Shareholders agree
that the Escrow Agent shall return to the Company for cancellation, at no cost, the number of Escrow Shares determined by multiplying
(a) the product of (i) 150,000, multiplied by (ii) a fraction, the numerator of which is 600,000 minus the number of Ordinary
Shares purchased by the Underwriters upon the exercise of its over-allotment option, and the denominator of which is 600,000.
The Company shall promptly provide notice to the Escrow Agent of the expiration or termination of the Underwriters’ over-allotment
option and the number of Units, if any, purchased by the Underwriters in connection with their exercise thereof and instruct the
Escrow Agent as to the number of Escrow Shares to return for cancellation, if any, and from whose account such shares should be
refund.
4.
Rights
of Initial Shareholders in Escrow Shares
.
4.1
Voting
Rights as a Shareholder
. Subject to the terms of the Insider Letters described in Section 4.4 hereof and except as herein
provided, the Initial Shareholders shall retain all of their rights as shareholders 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 Shares
. During the Escrow Period, all dividends payable in cash with respect
to the Escrow Shares shall be paid to the Initial Shareholders, 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 Shares” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.
4.3
Restrictions
on Transfer
. During the Escrow Period, the only permitted transfers of the Escrow Shares will be (i) if the Initial Shareholder
is an entity, as a distribution to partners, members or shareholders of the Initial Shareholder upon the liquidation and dissolution
of the Initial Shareholder, (ii) by bona fide gift to a member of the Initial Shareholder’s immediate family or to a trust,
the beneficiary of which is the Initial Shareholder or a member of the Initial Shareholder’s immediate family for estate
planning purposes, (iii) by virtue of the laws of descent and distribution upon death of the Initial Shareholder, (iv) pursuant
to a qualified domestic relations order, (v) by certain pledges to secure obligations incurred in connection with purchases of
the Company’s securities, (vi) by private sales at prices no greater than the price at which the Escrow Shares were originally
purchased or (vii) to the Company for cancellation in accordance with Section 3.2 above or in connection with the consummation
of a Business Combination, in each case, except for clause (vii), on the condition that such 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 (as defined below) signed by the Initial Shareholder transferring the Escrow Shares.
4.4
Insider
Letters
. Each of the Initial Shareholders has executed a letter agreement with EBC and the Company, dated as indicated on
Exhibit A hereto, and the form of which is filed as an exhibit to the Registration Statement (“Insider Letter”), respecting
the rights and obligations of such Initial Shareholder in certain events, including but not limited to the liquidation of the
Company.
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 Shares 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 Shares or it may deposit the Escrow Shares with the clerk of any appropriate
court or it may retain the Escrow Shares 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 Shares 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. 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.
5.4
Further
Assurances
. From time to time on and after the date hereof, the Company and the Initial Shareholders shall deliver or cause
to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts
as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting hereunder.
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, the Escrow Shares 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 Shares with any court it reasonably 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.
5.8
Waiver
.
The Escrow Agent hereby waives any right of set-off or any other 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 Escrow 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.
6.
Miscellaneous
.
6.1
Governing
Law
. In connection with Section 5-1401 of the General Obligations Law of the State of New York, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that
would result in the application of the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding
or claim arising out of or relating in any way to this Agreement shall be resolved through final and binding arbitration in accordance
with the International Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be
brought before the AAA International Center for Dispute Resolution’s offices in New York City, New York, will be conducted
in English and will be decided by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator
panel’s decision shall be final and enforceable by any court having jurisdiction over the party from whom enforcement is
sought. The cost of such arbitrators and arbitration services, together with the prevailing party’s legal fees and expenses,
shall be borne by the non-prevailing party or as otherwise directed by the arbitrators. The Company hereby appoints, without power
of revocation, Graubard Miller 405 Lexington Avenue New York, New York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller,
Esq., as their respective agent to accept and acknowledge on its behalf service of any and all process which may be served in
any arbitration, action, proceeding or counterclaim in any way relating to or arising out of this Agreement. The Company further
agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force
and effect for a period of seven years from the date of this Agreement. This Agreement may be executed in several original or
facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
6.2
Third
Party Beneficiaries
. Each of the Initial Shareholders hereby acknowledges that EBC is a third party beneficiary of this Agreement
and this Agreement may not be modified or changed without the prior written consent of EBC.
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.
6.4
Headings
.
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
thereof.
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 be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid,
and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:
If
to the Company, to:
Andina
Acquisition Corp. Ii
250
West 57th St
Suite
2223
New
York, NY 10107
Attn: Julio A. Torres, Chief Executive Officer
If
to a Shareholder, 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:
Chairman
A
copy (which copy shall not constitute notice) sent hereunder shall be sent to:
EarlyBirdCapital,
Inc.
366
Madison Avenue
5
th
Floor
New
York, New York 10017
Attn:
General Counsel and Investment Banking Department
Facsimile:
(212) 661-0200
and:
Graubard
Miller
The
Chrysler Building
405
Lexington Avenue
New
York, New York 10174
Attn:
David Alan Miller, Esq.
and:
Blank
Rome LLP
The
Chrysler Building
405
Lexington Avenue
New
York, New York 10174
Attn:
Robert J. Mittman, 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 the 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 specified in the Prospectus.
[Signature
Page Follows]
WITNESS
the execution of this Agreement as of the date first above written.
|
|
|
|
|
|
|
COMPANY:
|
|
|
|
|
|
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
INITIAL SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
Julio A. Torres
|
|
|
|
|
|
|
|
|
|
|
|
Mauricio Orellana
|
|
|
|
|
|
|
|
Eric Carrera
|
|
|
|
|
|
|
|
|
|
|
|
Marjorie Hernandez
|
|
|
|
|
|
|
|
|
|
|
|
B. Luke Weil
|
|
|
|
|
|
|
|
|
|
|
|
Matthew S. N. Kibble
|
|
|
|
|
|
|
|
|
|
|
|
Edward G. Navarro
|
|
|
|
|
|
|
|
LWEH1 LLC
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
LWEH2 LLC
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas Weil
|
|
|
|
|
|
|
|
|
|
|
|
A. Lorne Weil
|
|
|
|
|
|
|
|
|
|
|
|
Ryan Chang
|
|
|
|
|
|
|
|
|
|
|
|
Whitney Carlen Cox
|
|
|
|
|
|
|
|
|
|
|
|
Mendakota Casualty Company
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
|
|
|
Bob Goldstein
|
|
|
|
|
|
|
|
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
EXHIBIT
A
|
Name
and Address of
Initial
Shareholder
|
|
Number
of
Shares
|
|
Share
Certificate
Number
|
|
Date
of
Insider
Letter
|
|
|
|
|
|
|
|
|
|
Julio
A. Torres
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
40,470
|
|
1
|
|
______________,
2015
|
|
|
|
|
|
|
|
|
|
Mauricio
Orellana
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
79,379
|
|
2
|
|
______________,
2015
|
|
Eric
Carrera
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
10,000
|
|
3
|
|
______________,
2015
|
|
Marjorie
Hernandez
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
54,623
|
|
4
|
|
______________,
2015
|
|
B.
Luke Weil
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
442,895
|
|
5
|
|
______________,
2015
|
|
Matthew
S. N. Kibble
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
21,000
|
|
6
|
|
______________,
2015
|
|
Edward
G. Navarro
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
7,000
|
|
7
|
|
______________,
2015
|
|
LWEH1
LLC
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
30,000
|
|
8
|
|
______________,
2015
|
|
LWEH2
LLC
c/o
Andina Acquisition Corp. II
250
West 57th St
Suite
2223
New
York, NY 10107
|
|
25,000
|
|
9
|
|
______________,
2015
|
|
Nicholas
Weil
c/o
Andina Acquisition Corp. II
250 West
57th St
Suite 2223
New York, NY 10107
|
|
8,000
|
|
10
|
|
______________,
2015
|
|
A. Lorne
Weil
c/o Andina
Acquisition Corp. II
250 West
57th St
Suite 2223
New York, NY 10107
|
|
312,740
|
|
11
|
|
______________,
2015
|
|
Ryan
Chang
c/o Andina
Acquisition Corp. II
250 West
57th St
Suite
2223
New York, NY 10107
|
|
52,399
|
|
12
|
|
______________,
2015
|
|
Whitney
Carlen Cox
c/o Andina
Acquisition Corp. II
250 West
57th St
Suite
2223
New York, NY 10107
|
|
6,544
|
|
13
|
|
______________,
2015
|
|
Mendakota
Casualty Company
c/o Andina
Acquisition Corp. II
250 West
57th St
Suite
2223
New York, NY 10107
|
|
30,000
|
|
14
|
|
______________,
2015
|
|
Bob
Goldstein
c/o Andina
Acquisition Corp. II
250 West
57th St
Suite
2223
New York, NY 10107
|
|
30,000
|
|
15
|
|
______________,
2015
|
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this
“
Agreement
”) is entered into as of the ____ day of _________, 2015, by and among Andina Acquisition Corp.
II, a Cayman Islands exempted company (the “
Company
”) and the undersigned parties listed under Investor
on the signature page hereto (each, an “Investor” and collectively, the “
Investors
”).
WHEREAS, the Investors and the Company desire
to enter into this Agreement to provide the Investors with certain rights relating to the registration of the securities held by
them as of the date hereof;
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, share exchange, asset acquisition, share purchase, recapitalization,
reorganization or other similar type of transaction, of one or more businesses or entities having a collective fair market value
of at least 80% of the balance in the Company’s trust account at the time of the execution of a definitive agreement for
such transaction.
“
Commission
” means
the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.
“
Company
” is defined
in the preamble to this Agreement.
“
Demand Registration
”
is defined in Section 2.1.1.
“
Demanding Holder
”
is defined in Section 2.1.1.
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect at the time.
“
Form S-3
” is
defined in Section 2.3.
“
Indemnified Party
”
is defined in Section 4.3.
“
Indemnifying Party
”
is defined in Section 4.3.
“
Initial Shares
”
means all of the outstanding Ordinary Shares of the Company issued prior to the consummation of its initial public offering.
“
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.
“
Ordinary Shares
”
means the ordinary shares, par value $0.0001 per share, of the Company.
“
Piggy-Back Registration
”
is defined in Section 2.2.1.
“
Private Units
”
means the up to 338,500 Units the Investors are privately purchasing simultaneously with the consummation of the Company’s
initial public offering.
“
Register
,” “
Registered
”
and “
Registration
” mean a registration effected by preparing and filing a registration statement or similar
document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder,
and such registration statement becoming effective.
“
Registrable Securities
”
means (i) the Initial Shares, (ii) the Private Units (and underlying Ordinary Shares) and (iii) the Working Capital Units (and
underlying Ordinary Shares), if any. 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 Initial Shares,
Private Units (and underlying Ordinary Shares) and Working Capital Units (and underlying Ordinary Shares). As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect
to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred,
disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred,
new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent
public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be
outstanding, or (d) the Registrable Securities are freely saleable under Rule 144 without volume limitations.
“
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 equity securities, or securities or other obligations exercisable
or exchangeable for, or convertible into, equity securities (other than a registration statement on Form S-4 or Form S-8, or their
successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of
another entity).
“
Release Date
”
means the date on which the Initial Shares are disbursed from escrow pursuant to Section 3 of that certain Stock Escrow Agreement
dated as of _________, 2015 by and among the Investors and Continental Stock Transfer & Trust Company.
“
Securities Act
”
means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the
same shall be in effect at the time.
“
Underwriter
”
means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of
such dealer’s market-making activities.
“
Units
” means
the units of the Company, each comprised of one Ordinary Share and one right to receive one-seventh of one Ordinary Share.
“
Working Capital Units
”
means any Units held by Investors, officers or directors of the Company or their affiliates which may be issued in payment of working
capital loans made to the Company.
2.
REGISTRATION RIGHTS
.
2.1
Demand Registration
.
2.1.1
Request for Registration
.
At any time and from time to time on or after (i) the date that the Company consummates a Business Combination with respect to
the Private Units (or underlying securities) and Working Capital Units (or underlying securities) or (ii) three months prior to
the Release Date with respect to all other Registrable Securities, the holders of a majority-in-interest of such Private Units
(or underlying securities), Working Capital Units (or underlying securities) or other Registrable Securities, as the case may be,
held by the Investors, officers or directors of the Company or their affiliates, or the transferees of the Investors, may make
a written demand for registration under the Securities Act of all or part of their Private Units (or underlying securities), Working
Capital Units (or underlying securities) or other Registrable Securities, as the case may be (a “
Demand Registration
”).
Any demand for a Demand Registration shall specify the number of shares of Registrable Securities proposed to be sold and the intended
method(s) of distribution thereof. The Company will notify all holders of Registrable Securities of the demand, and each holder
of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration
(each such holder including shares of Registrable Securities in such registration, a “
Demanding Holder
”)
shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such
request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject
to Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be obligated to effect more than an aggregate
of two (2) Demand Registrations under this Section 2.1.1 in respect of all Registrable Securities.
2.1.2
Effective Registration
.
A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect
to such Demand Registration 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; provided, further, that the
Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted
as a Demand Registration or is terminated.
2.1.3
Underwritten Offering
.
If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand
for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration
shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable
Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their Registrable 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
.
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 Ordinary Shares or other securities which the Company desires to sell and the Ordinary
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 Ordinary
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 Ordinary
Shares or other securities registrable pursuant to the terms of the Unit Purchase Option issued to EarlyBirdCapital, Inc. or its
designees in connection with the Company’s initial public offering (the “
Unit Purchase Option
”
and such registrable securities, the “
Option 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 Ordinary 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.
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. If the majority-in-interest of the Demanding Holders
withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration
provided for in Section 2.1.
2.2
Piggy-Back Registration
.
2.2.1
Piggy-Back Rights
. If
at any time on or after the date the Company consummates a Business Combination 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 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.
2.2.2
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 Ordinary Shares which the Company desires
to sell, taken together with Ordinary 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 2.2, and the Ordinary 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 Ordinary 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 Ordinary Shares or other securities, if any, comprised of Registrable Securities and 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, 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 Ordinary 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 Option Securities, (A) first, the Ordinary 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 Ordinary 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 Ordinary 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 Option Securities, (A) first, the Ordinary 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 Ordinary 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 Ordinary Shares or other securities comprised of Registrable Securities and Option
Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof and of the Unit Purchase Option,
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 Ordinary 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.
2.2.3
Withdrawal
. Any holder
of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back
Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to
written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such 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 or other securities of the Company, if any, of any other holder or holders
joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice
from the Company; provided, however, that the Company shall not be obligated to effect any such registration pursuant to this Section
2.2.4: (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 2.2.4 shall not be counted as Demand Registrations effected pursuant to Section 2.1.
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 use its best efforts to, as expeditiously as possible 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 effective and use its best efforts to keep it 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 President
or Chairman 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 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, that the Company
shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph or subject itself to taxation in any such jurisdiction.
3.1.6
Agreements for Disposition
.
The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take
such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities.
The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit
of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities
included in such registration statement. No holder of Registrable Securities included in such registration statement shall be required
to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s
material agreements and organizational documents, and with respect to written information relating to such holder that such holder
has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7
Cooperation
. The principal
executive officer of the Company, 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, 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.
3.1.12
Road Show
. If the registration
involves the registration of Registrable Securities involving gross proceeds in excess of [$25,000,000], the Company shall use
its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations
that may be reasonably requested by the Underwriter in any underwritten offering.
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 2.2.4, and all expenses incurred
in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of
its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as
required by Section 3.1.11; (vi) Financial Industry Regulatory Authority 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 reasonable fees
and expenses of any special experts retained by the Company in connection with such registration and (ix) the reasonable 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.
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 the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability
arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such
Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use
therein. The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors,
partners, members and agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
4.2
Indemnification by Holders of
Registrable Securities
. Each selling holder of Registrable Securities will, in the event that any registration is being effected
under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold
harmless the Company, each of its directors and officers and each Underwriter (if any), and each other selling holder and each
other person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities Act, against
any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages
or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement
of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under
the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission
to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement
or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder
expressly for use therein, and shall reimburse the Company, its directors and officers, and each other selling holder or controlling
person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such
loss, claim, damage, liability or action. Each selling holder’s indemnification obligations hereunder shall be several and
not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.
4.3
Conduct of Indemnification Proceedings
.
Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity
may be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect thereof
is to be made against any other person for indemnification hereunder, notify such other person (the “
Indemnifying Party
”)
in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party
to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have
to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure.
If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party,
then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party.
After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim
or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however,
that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party
shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party
and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought
by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying
Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder
by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding.
4.4
Contribution
.
4.4.1 If the indemnification provided
for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability
or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion
as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the
actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations.
The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.
4.4.2 The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding
Section 4.4.1.
4.4.3 The amount paid or payable
by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified
Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4,
no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds
(after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable
Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
5.
RULE 144
.
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 no person, other than the holders of the Registrable Securities, has any right to require
the Company to register any shares of the Company’s capital stock for sale or to include shares of the Company’s capital
stock in any registration filed by the Company for the sale of shares of capital stock for its own account or for the account of
any other person.
6.2
Assignment; No Third Party Beneficiaries
.
This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company
in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may
be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer
of Registrable Securities by any such holder. This Agreement and the provisions hereof shall be binding upon and shall inure to
the benefit of each of the parties, to the permitted assigns of the Investors or holder of Registrable Securities or of any assignee
of the Investors or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons
that are not party hereto other than as expressly set forth in Article 4 and this Section 6.2.
6.3
Notices
. All notices, demands,
requests, consents, approvals or other communications (collectively, “
Notices
”) required or permitted
to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered
by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed
as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be
deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided,
that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall be deemed given on the next business day following
timely delivery of such notice to a reputable air courier service with an order for next-day delivery.
To the Company:
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
Attn: Chief Executive Officer
with a copy to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York NY 10174
Attn: David Alan Miller, Esq.
To an Investor, to the address set forth below such
Investor’s name on Exhibit A hereto.
6.4
Severability
. This Agreement shall be deemed
severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision,
the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be possible that is valid and enforceable.
6.5
Counterparts
. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the
same instrument.
6.6
Entire Agreement
. This Agreement (including
all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the parties, whether oral or written.
6.7
Modifications and Amendments
. No amendment,
modification or termination of this Agreement shall be binding upon any party unless executed in writing by such party.
6.8
Titles and Headings
. Titles and headings of
sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.9
Waivers and Extensions
. Any party to this
Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be
effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may
be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding
or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance
of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
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
. In connection with Section
5-1401 of the General Obligations Law of the State of New York, this Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of
the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating
in any way to this Agreement shall be resolved through final and binding arbitration in accordance with the International Arbitration
Rules of the American Arbitration Association (“AAA”). The arbitration shall be brought before the AAA International
Center for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a
panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall
be final and enforceable by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators
and arbitration services, together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing
party or as otherwise directed by the arbitrators. The Company hereby appoints, without power of revocation, Graubard Miller 405
Lexington Avenue New York, New York 10174 Fax No.: (212) 818-8881 Attn: David Alan Miller, Esq., as their respective agent to accept
and acknowledge on its behalf service of any and all process which may be served in any arbitration, action, proceeding or counterclaim
in any way relating to or arising out of this Agreement. The Company further agrees to take any and all action as may be necessary
to maintain such designation and appointment of such agent in full force and effect for a period of seven years from the date of
this Agreement. This Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute
an original, and together shall constitute but one instrument.
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.
|
|
|
|
|
|
|
COMPANY:
|
|
|
|
|
|
|
|
ANDINA ACQUISITION CORP. II
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
INVESTORS:
|
|
|
|
|
|
|
|
|
|
|
|
Julio A. Torres
|
|
|
|
|
|
|
|
|
|
|
|
Mauricio Orellana
|
|
|
|
|
|
|
|
|
|
|
|
Eric Carrera
|
|
|
|
|
|
|
|
|
|
|
|
Marjorie Hernandez
|
|
|
|
|
|
|
|
|
|
|
|
B. Luke Weil
|
|
|
|
|
|
|
|
|
|
|
|
Matthew S. N. Kibble
|
|
|
|
|
|
|
|
|
|
|
|
Edward G. Navarro
|
|
|
|
LWEH1 LLC
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
LWEH2 LLC
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas Weil
|
|
|
|
|
|
|
|
|
|
|
|
A. Lorne Weil
|
|
|
|
|
|
|
|
|
|
|
|
Ryan Chang
|
|
|
|
|
|
|
|
|
|
|
|
Whitney Carlen Cox
|
|
|
|
|
|
|
|
|
|
|
|
Mendakota Casualty Company
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
Bob Goldstein
|
|
|
|
|
|
|
|
EARLYBIRDCAPITAL, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
Title:
|
EXHIBIT A
|
|
Name and Address of
Initial Shareholder
|
|
|
|
|
|
|
|
Julio A. Torres
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
Mauricio Orellana
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
Eric Carrera
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
Marjorie Hernandez
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
B. Luke Weil
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
Matthew S. N. Kibble
c/o Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
Edward G. Navarro
c/o
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
[LWEH1 LLC]
c/o
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
[LWEH2 LLC]
c/o
Andina Acquisition Corp. II
250 West 57th St
Suite 2223
New York, NY 10107
|
|
|
|
|
|
|
|
|
|
|
|
EarlyBirdCapital, Inc.
366 Madison Avenue, 8th Floor
New York, New York 10017
Attn: David M. Nussbaum, Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.5
_______ __, 2015
Gentlemen:
Andina Acquisition Corp. II (“Corporation”),
a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”),
intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with
its initial public offering (“IPO”).
The undersigned hereby commits to
purchase an aggregate of ___ units of the Corporation (“Initial Units”), each Initial Unit consisting of one
ordinary share, par value $0.0001 per share, of the Corporation (“Ordinary Shares”), one right to receive
one-seventh (1/7) of one Ordinary Share, and one warrant to purchase one-half of one share for $11.50 per share, at $10.00
per Private Unit (as defined below), for an aggregate purchase price of $______ (the “Initial Purchase Price”).
Additionally, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned further
commits to purchase up to an additional ______ Units (“Additional Units” and together with the Initial Units, the
“Private Units”) at $10.00 per Additional Unit for an aggregate purchase price of up to $_____ (the
“Over-Allotment Purchase Price” and together with the Initial Purchase Price, the “Purchase
Price”). Simultaneously with the execution of this agreement, the undersigned will cause the Purchase Price to be
delivered to Graubard Miller (“GM”), counsel for the Corporation, by wire transfer as set forth in the
instructions attached as Exhibit A to hold in an interest bearing account until the Corporation consummates the IPO, together
with an originally executed Form W-9 or W-8BEN (or other similar applicable form).
The undersigned acknowledges and
agrees that if the underwriters in the IPO determine based on market conditions at that time that additional Private Units
must be purchased in order to consummate the IPO, the undersigned will purchase a proportionate number of additional Private
Units, pro rata with the other holders of Private Units. If such additional purchases are necessary, the undersigned agrees
that it will deliver the purchase price for such additional Private Units to GM as promptly as is reasonably practicable
following written notice from the Corporation of such decision. In the event that the undersigned breaches the purchase
obligations set forth above to purchase the Private Units and does not purchase all or any portion of such additional Private
Units, the other purchasers of the Private Units will have the ability, but not the obligation, to satisfy the
undersigned’s purchase obligation (and if they do, then the undersigned will sell, at the original cost, the Insider
Shares (defined below) held by the undersigned to the other purchasers of Private Units who satisfy the undersigned’s
purchase obligation and shall thereupon have no further liability or obligation in relation to such breach).
The consummation of the purchase and issuance
of the Initial Units and Additional Units (if any) shall occur simultaneously with the consummation of the IPO and over-allotment
option, respectively. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without
interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s
public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration
Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. Simultaneously with the
consummation of all or any part of the over-allotment option, GM shall (i) deposit the pro-rata portion of the Over-Allotment Purchase
Price, based upon the amount of the over-allotment option that has been exercised, without interest or deduction, into the Trust
Fund and (ii) deliver all interest then earned on the Over-Allotment Purchase Price to the undersigned. Upon expiration of the
over-allotment option, GM shall return any unused portion of the Over-Allotment Purchase Price to the undersigned, together with
any remaining interest earned on the Over-Allotment Purchase Price. If the Corporation does not complete the IPO within six (6)
months from the date of this letter (subject to a six (6) month extension at the Corporation’s option in its sole discretion),
the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned
acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Private
Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase
Price for the Private Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person
or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless
GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim
made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter
agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have
been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that
it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“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 Fund for any reason whatsoever.
In consideration of the above purchase
obligations, B. Luke Weil or an affiliate of his (the “Transferor”) hereby agrees to transfer to the undersigned an
aggregate of _____ Ordinary Shares (“Insider Shares”) of the Corporation at approximately $0.02 per Insider Share,
for an aggregate purchase price of $___, which amount is being delivered to the Transferor simultaneously with the execution of
this letter. The undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should
be increased or decreased, the undersigned will either receive a dividend on the Insider Shares transferred hereunder or contribute
a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s
initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any increase or decrease will affect
all holders of Insider Shares on a pro-rata basis.
The Private Units will be identical to
the units to be sold by the Company in the IPO except the warrants underlying the Private Units will be non-redeemable and may be exercised on a cashless
basis, in each case so long as they continue to be held by the undersigned or the undersigned’s permitted transferees. Additionally, the undersigned agrees:
|
|
·
|
to vote the Ordinary Shares included in the Private Units in favor of any proposed Business Combination;
|
|
|
·
|
not to propose, or vote in favor of, an amendment to the Company’s Amended and Restated Memorandum and Articles of Association
with respect to the Company’s pre-Business Combination activities prior to the consummation of such a Business Combination
unless the Company offers dissenting holders the right to convert their shares for a portion of the cash held in the Trust Fund;
|
|
|
·
|
not to convert any Ordinary Shares included in the Private Units into the right to receive cash from the Trust Fund in connection
with a shareholder vote to approve either a Business Combination or an amendment to the provisions of the Company’s Amended
and Restated Memorandum and Articles of Association relating to shareholders’ rights or pre-business combination activity;
|
|
|
·
|
that the Private Units and underlying securities will not be transferable until after the consummation of a Business Combination
except (i) to the undersigned’s members upon its liquidation, (ii) to relatives and trusts for estate planning purposes,
(iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v)
by certain pledges to secure obligations incurred in connection with purchase of the Company’s securities, (vi) by private
sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Private
Units were originally purchased or (vii) to the Company for cancellation in connection with the consummation of a Business Combination,
in each case (except for clause vi) where the transferee agrees to the terms of the transfer restrictions;
|
|
|
·
|
the Private Units will be subject to customary registration rights, pursuant to a Registration Rights Agreement on terms agreed
upon by the Company and the Underwriters to be filed as an exhibit to the Registration Statement;
|
|
|
·
|
the undersigned will not participate in any liquidation distribution with respect to the Private Units (but will participate
in liquidation distributions with respect to any units or Common Stock purchased by the Undersigned in the IPO or in the open market)
if the Company fails to consummate a Business Combination; and
|
|
|
·
|
the Private Units will include any additional terms or restrictions as is customary in other similarly structured blank check
company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which
will be set forth in the Registration Statement.
|
The undersigned further acknowledges and agrees
that if, in order to consummate any Business Combination, the holders of Insider Shares or Private Units are required to contribute
back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the Undersigned will
contribute back to the capital of the Corporation a proportionate number of Insider Shares or Private Units, as applicable, pro
rata with the other holders of Insider Shares or Private Units, as applicable.
The undersigned acknowledges and agrees
that he will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing
agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but
not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants
that, as applicable:
|
|
(a)
|
he has been advised that the Insider Shares and Private Units have not been registered under the Securities Act;
|
|
|
(b)
|
he is acquiring the Insider Shares and Private Units for his account for investment purposes only;
|
|
|
(c)
|
he has no present intention of selling or otherwise disposing of the Insider Shares and Private Units in violation of the securities
laws of the United States;
|
|
|
(d)
|
he is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933,
as amended;
|
|
|
(e)
|
he is not subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under Regulation
D (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3);
|
|
|
(f)
|
he has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and
all persons acting on its behalf concerning the terms and conditions of the offer made hereunder;
|
|
|
(g)
|
he is familiar with the proposed business, management, financial condition and affairs of the Corporation;
|
|
|
(h)
|
he has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or
needed to consummate the transactions contemplated in this letter; and
|
|
|
|
|
|
|
(i)
|
this letter constitutes his respective legal, valid and binding obligation, and is enforceable against
him.
|
Accepted and Agreed:
ANDINA ACQUISITION CORP.
II
Graubard Miller
(solely with respect to its obligations to hold
and disburse monies for the Private Units)
Exhibit A
Exhibit
23.1
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We
consent to the inclusion in this Amendment No.2 to the Registration Statement of Andina Acquisition Corp. II (the
“Company”) on Form S-1 of our report dated September 3, 2015, except for Note 7 as to which the date is October
8, 2015 which includes an explanatory paragraph as to the Company’s ability to continue as a going concern,
with respect to our audit of the financial statements of Andina Acquisition Corp. II as of August 21, 2015 and for the period
July 1, 2015 (inception) through August 21, 2015, which report appears in the Prospectus, which is part of this
Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in
such Prospectus.
/s/ Marcum
llp
Marcum
llp
New York,
NY
November 6, 2015