SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(Rule 14d-100)
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
CHART ACQUISITION CORP.
(Name of Subject Company (Issuer))
Chart
Acquisition Group LLC (Offeror)
Joseph R. Wright (Offeror)
Cowen Investments LLC (Offeror)
The Chart Group, L.P. (Other)
RCG LV Pearl LLC (Other)
(Names of Filing Persons)
Warrants to Purchase Shares of Common Stock, Par Value $0.0001 Per Share
(Title of Class of Securities)
161151
113
(CUSIP Number of Class of Securities)
Joseph
R. Wright
c/o The Chart Group, L.P.
555 5th Avenue, 19th Floor
New York, NY 10017
(212) 350-8205
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
with a copy to:
Douglas S. Ellenoff, Esq.
Stuart
Neuhauser, Esq.
Joshua N. Englard, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
(212) 370-1300
(212) 370-7889 (fax)
CALCULATION OF FILING FEE | ||
Transaction valuation* | Amount of filing fee** | |
$2,247,690 | $261.18 |
* | Estimated for purposes of calculating the amount of the filing fee only, in accordance with Rule 0-11(d) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This calculation assumes the purchase of a total of 7,492,300 Warrants to purchase shares of common stock, par value $0.0001 per share, at the tender offer price of $0.30 per share. |
** | The amount of the filing fee, calculated in accordance with Rule 0-11(b) under the Exchange Act, equals $116.20 per million dollars of the transaction valuation. |
☐ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount Previously Paid: Not applicable | Filing Party: Not applicable | |
Form or Registration No.: Not applicable | Date Filed: Not applicable |
☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
☒ | third-party tender offer subject to Rule 14d-1. | |
☐ | issuer tender offer subject to Rule 13e-4. | |
☐ | going-private transaction subject to Rule 13e-3. | |
☐ | amendment to Schedule 13D under Rule 13d-2. |
Check | the following box if the filing is a final amendment reporting the results of the tender offer: ☐ |
SCHEDULE TO
This Tender Offer Statement on Schedule TO (“Schedule TO”) is being filed by Chart Acquisition Group LLC (the “Sponsor”), Joseph R. Wright (“Mr. Wright”), Cowen Investments LLC (“Cowen” and, together with the Sponsor and Mr. Wright, the “Purchasers”), The Chart Group L.P., the managing member of the Sponsor, and RCG LV Pearl LLC, the sole member of Cowen and a subsidiary of Cowen Group, Inc. (together with the Purchasers and Chart Group L.P., the “Filing Persons”), pursuant to Rule 14d-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the Purchasers’ offer to purchase for cash up to 7,492,300 of the warrants of Chart Acquisition Corp. (the “Company”), each warrant exercisable to purchase one share of common stock, par value $0.0001 per share (the “Warrants”), at a price of $0.30 per Warrant, net to the seller in cash, without interest (the “Purchase Price”) for an aggregate purchase price of up to $2,247,690. The offer is being made upon the terms and subject to certain conditions set forth in the Offer to Purchase dated February 11, 2015 (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal”), which, as amended or supplemented from time to time, together constitute the offer (the “Offer”). This Schedule TO is intended to satisfy the reporting requirements of the Exchange Act.
All information in the Offer to Purchase and the Letter of Transmittal, copies of which are attached to this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively, is hereby expressly incorporated by reference in response to all of the items in this Schedule TO, and as more particularly set forth below.
Item 1. | Summary Term Sheet. |
The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” is incorporated herein by reference.
Item 2. | Subject Company Information. |
(a) Name and Address.
The name of the Company is Chart Acquisition Corp. The address of the Company’s principal executive office is c/o The Chart Group, L.P., 555 5th Avenue, 19th Floor, New York, NY 10017; telephone (212) 350-8205.
(b) Securities.
This Schedule TO relates to the Company’s outstanding Warrants. As of February 11, 2015, the date of commencement of the tender offer, there were issued and outstanding 7,875,000 Warrants, including 7,500,000 Warrants issued in the Company’s initial public offering (“IPO”) (including 7,700 Warrants acquired by the Purchasers on September 12, 2014 pursuant to the Initial Warrant Tender Offer (as defined in the Offer to Purchase)) and 375,000 Warrants issued in a private placement that was consummated simultaneously with the IPO. All such Warrants have an exercise price of $11.50 per share.
(c) Trading Market and Price.
The information set forth in the section of the Offer to Purchase titled “The Offer – Section 7. Price Range of Common Stock, Warrants and Units; Dividends” is incorporated herein by reference.
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Item 3. | Identity and Background of Filing Person. |
(a) Name and Address.
The Filing Persons are Chart Acquisition Group LLC, The Chart Group, L.P., Joseph R. Wright, Cowen Investments LLC and RCG LV Pearl LLC.
The business address and telephone number of the Sponsor, The Chart Group, L.P., and Mr. Wright are the business address and telephone number of the Company set forth under Item 2(a) above. The business address of Cowen and RCG LV Pearl LLC is c/o RCG LV Pearl LLC, 599 Lexington Avenue, New York, NY 10022, and the telephone number is (646) 562-1000.
The Sponsor is the sponsor of the Company (and currently owns 11.2% of the issued and outstanding shares of the Company’s common stock). Mr. Wright is the Chairman and Chief Executive Officer of the Company. Consequently, the Sponsor and Mr. Wright are affiliates of the Company. Cowen is an affiliate of Cowen and Company, LLC, one of the lead underwriters of the Company’s initial public offering. The Chart Group, L.P. is the managing member of the Sponsor. RCG LV Pearl LLC is the sole member of Cowen and a subsidiary of Cowen Group, Inc.
(b) Business and Background of Entities.
The principal business of the Sponsor, a Delaware limited liability company, is to act as the sponsor of the Company. The principal business of The Chart Group, L.P., a Delaware limited partnership, is to provide merchant banking services. The principal business of Cowen Investments LLC, a Delaware limited liability company, is to make private investments and to engage in any lawful activity in connection therewith. The principal business of RCG LV Pearl LLC, a Delaware limited liability company, is to acquire, hold and dispose of direct or indirect equity and debt investments and to engage in any lawful activity in connection therewith.
During the last five years, none of the Sponsor, The Chart Group, L.P., Cowen or RCG LV Pearl LLC has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment or decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
(c) Business and Background of Natural Persons.
(1) The information set forth in the section of the Offer to Purchase titled “Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
(2) The information set forth in the section of the Offer to Purchase titled “Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
(3) The information set forth in the section of the Offer to Purchase titled “Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
(4) The information set forth in the section of the Offer to Purchase titled “Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
(5) Mr. Wright is a citizen of the United States.
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Item 4. | Terms of the Transaction. |
(a) Material Terms.
(1)(i) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” and “The Offer – Section 1. Number of Warrants; Purchase Price; No Proration” is incorporated herein by reference.
(1)(ii) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Offer – Section 1. Number of Warrants; Purchase Price; No Proration,” and “– Section 5. Purchase of Warrants and Payment of Purchase Price” is incorporated herein by reference.
(1)(iii) The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” is incorporated herein by reference.
(1)(iv) Not applicable.
(1)(v) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Offer – Section 6. Conditions of the Offer” and “– Section 13. Extension of the Offer; Termination; Amendment” is incorporated herein by reference.
(1)(vi) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” and “The Offer – Section 4. Withdrawal Rights” is incorporated herein by reference.
(1)(vii) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Offer – Section 3. Procedures for Tendering Warrants” and “The Offer – Section 4. Withdrawal Rights” is incorporated herein by reference.
(1)(viii) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” and “The Offer – Section 5. Purchase of Warrants and Payment of Purchase Price” is incorporated herein by reference.
(1)(ix) Not applicable.
(1)(x) Not applicable.
(1)(xi) Not applicable.
(1)(xii) The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” and “The Offer – Section 10. Material U.S. Federal Income Tax Consequences” is incorporated herein by reference.
(2)(i)-(vii) Not applicable.
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Item 5. | Past Contacts, Transactions, Negotiations and Agreements. |
(a) Transactions.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “Risk Factors,” “The Business Combination,” “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer,” “– Section 9. Interests of Directors and Executive Officers; Certain Agreements,” and “– Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
(b) Significant Corporate Events.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “Risk Factors,” “The Business Combination,” “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer,” “– Section 9. Interests of Directors and Executive Officers; Certain Agreements,” and “– Section 11. Important Information Concerning the Company – Directors and Executive Officers” is incorporated herein by reference.
Item 6. | Purposes of the Transaction and Plans or Proposals. |
(a) Purposes.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” and “The Business Combination,” “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer,” “– Section 11. Important Information Concerning the Company” is incorporated herein by reference.
(c) Plans.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Business Combination,” “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer,” “ – Section 7. Price Range of Common Stock, Warrants and Units; Dividends,” and “ – Section 11. Important Information Concerning the Company” is incorporated herein by reference.
Item 7. | Source and Amount of Funds or Other Consideration. |
(a) Sources of Funds.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” and “The Offer – Section 8. Source and Amount of Funds” is incorporated herein by reference.
(b) Conditions.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Business Combination” and “The Offer – Section 6. Conditions of the Offer” is incorporated herein by reference.
(d) Borrowed funds.
Not applicable.
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Item 8. | Interest in Securities of the Subject Company. |
(a) Securities Ownership.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Business Combination” and “The Offer – Section 9. Interests of Directors and Executive Officers; Certain Agreements” is incorporated herein by reference.
(b) Securities Transactions.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Business Combination” and “The Offer – Section 9. Interests of Directors and Executive Officers; Certain Agreements” is incorporated herein by reference.
Item 9. | Persons/Assets, Retained, Employed, Compensated or Used. |
(a) Solicitations or Recommendations.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers” and “The Offer – Section 14. Fees and Expenses” is incorporated herein by reference.
Item 10. | Financial Statements. |
(a) Financial Information.
Not applicable.
(b) Pro Forma Information.
Not applicable.
Item 11. | Additional Information. |
(a) Agreements, Regulatory Requirements and Legal Proceedings.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “The Business Combination,” and “The Offer– Section 9. Interests of Directors and Executive Officers; Certain Agreements” and the Letter of Transmittal, a copy of which is filed as Exhibit (a)(l)(B) hereto, is incorporated herein by reference.
(c) Other Material Information.
The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet and Questions and Answers,” “Risk Factors,” “The Offer – Section 12. Certain Legal Matters; Regulatory Approvals,” “– Section 15. Miscellaneous,” and “Where You Can Find Additional Information” is incorporated herein by reference.
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Item 12. | Exhibits. |
Exhibit Number |
Description | |
(a)(1)(A)* | Offer to Purchase dated February 11, 2015. | |
(a)(1)(B)* | Letter of Transmittal To Tender Warrants. | |
(a)(1)(C)* | Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
(a)(1)(D)* | Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
(a)(1)(E)* | Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. | |
(b) | Not applicable. | |
(d)(1) | Underwriting Agreement, dated December 13, 2012, by and between Chart Acquisition Corp., Deutsche Bank Securities Inc. and Cowen and Company, LLC, as representatives of the underwriters (incorporated by reference to Exhibit 1.1 to the Form 8-K filed by Chart Acquisition Corp. on December 19, 2012). | |
(d)(2) | Amended and Restated Warrant Agreement, dated September 12, 2014, by and between Continental Stock Transfer & Trust Company and Chart Acquisition Corp. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(3)* | Form of Second Amended and Restated Warrant Agreement | |
(d)(4) | Form of Amended and Restated Letter Agreement, dated September 9, 2014, by and among Chart Acquisition Corp., certain of its security holders and its officers and directors, Deutsche Bank Securities, Inc. and Cowen and Company, LLC (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(5)* | Form of Second Amended and Restated Letter Agreement. | |
(d)(6) | Amended and Restated Investment Management Trust Agreement, dated September 5, 2014, by and between Chart Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on September 5, 2014). | |
(d)(7)* | Form of Second Amended and Restated Investment Management Trust Agreement | |
(d)(8) | Registration Rights Agreement, dated December 13, 2012, by and among Chart Acquisition Corp., Chart Acquisition Group LLC, Cowen Overseas Investment LP and the other signatories thereto (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on December 19, 2012). | |
(d)(9) | Promissory Note, dated February 7, 2014, issued to Joseph R. Wright (incorporated by reference to Exhibit 10.13 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(10) | Promissory Note, dated February 4, 2014, issued to Cowen Overseas LP (incorporated by reference to Exhibit 10.14 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(11) | Promissory Note, dated February 11, 2014, issued to Chart Acquisition Group (incorporated by reference to Exhibit 10.15 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(12) | Form of Convertible Promissory Note, dated September 9, 2014 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(13) | Promissory Note, dated February 11, 2014, issued to Chart Acquisition Group (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(14) | Form of Promissory Note, dated February 4, 2015 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on February 5, 2015). | |
(d)(15) | Amended and Restated Escrow Agreement, dated September 12, 2014, by and among Chart Acquisition Group, LLC, Joseph R. Wright, Cowen Overseas Investment LP, Continental Stock Transfer & Trust Company, Deutsche Bank Securities, Inc. and Cowen and Company, LLC (incorporated by reference to Exhibit 10.5 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(16)* | Form of Second Amended and Restated Escrow Agreement. | |
(d)(17) | Agreement and Plan of Merger, dated January 5, 2015, by and among Tempus Applied Solutions, LLC, the Members of Tempus Applied Solutions, LLC, the Members’ Representative, Chart Acquisition Corp., Tempus Applied Solutions Holdings, Inc., Chart Merger Sub Inc., TAS Merger Sub LLC, the Chart Representative and the Warrant Offerors (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(d)(18) | Supporting Stockholder Agreement, dated January 5, 2015, by and among Tempus Applied Solutions LLC, the Members’ Representative and the stockholders of Chart Acquisition Corp. named therein (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(d)(19) | Form of Registration Rights Agreement by and among Tempus Applied Solutions Holdings, Inc. and the stockholders of Tempus Applied Solutions Holdings, Inc. named therein (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(g) | Preliminary Proxy Statement of the Company (incorporated by reference to the Preliminary Proxy Statement on Schedule 14A filed by Chart Acquisition Corp. on February 6, 2015). | |
(h) |
Not applicable. |
*Filed herewith.
Item 13. | Information Required by Schedule 13E-3. |
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: February 11, 2015
CHART ACQUISITION GROUP LLC | ||
By: | /s/ Michael LaBarbera | |
Name: Michael LaBarbera | ||
Title: Manager | ||
JOSEPH R. WRIGHT | ||
/s/ Joseph R. Wright | ||
COWEN INVESTMENTS LLC | ||
By: | /s/ Owen Littman | |
Name: Owen Littman | ||
Title: Authorized Signatory | ||
THE CHART GROUP, L.P. | ||
By: | /s/ Michael LaBarbera | |
Name: Michael LaBarbera | ||
Title: Manager | ||
RCG LV PEARL LLC | ||
By: | /s/ Owen Littman | |
Name: Owen Littman | ||
Title: Authorized Signatory |
7 |
INDEX TO EXHIBITS
Exhibit Number |
Description | |
(a)(1)(A)* | Offer to Purchase dated February 11, 2015. | |
(a)(1)(B)* | Letter of Transmittal To Tender Warrants. | |
(a)(1)(C)* | Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
(a)(1)(D)* | Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
(a)(1)(E)* | Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. | |
(b) | Not applicable. | |
(d)(1) | Underwriting Agreement, dated December 13, 2012, by and between Chart Acquisition Corp., Deutsche Bank Securities Inc. and Cowen and Company, LLC, as representatives of the underwriters (incorporated by reference to Exhibit 1.1 to the Form 8-K filed by Chart Acquisition Corp. on December 19, 2012). | |
(d)(2) | Amended and Restated Warrant Agreement, dated September 12, 2014, by and between Continental Stock Transfer & Trust Company and Chart Acquisition Corp. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(3)* | Form of Second Amended and Restated Warrant Agreement | |
(d)(4) | Form of Amended and Restated Letter Agreement, dated September 9, 2014, by and among Chart Acquisition Corp., certain of its security holders and its officers and directors, Deutsche Bank Securities, Inc. and Cowen and Company, LLC (incorporated by reference to Exhibit 10.4 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(5)* | Form of Second Amended and Restated Letter Agreement. | |
(d)(6) | Amended and Restated Investment Management Trust Agreement, dated September 5, 2014, by and between Chart Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on September 5, 2014). | |
(d)(7)* | Form of Second Amended and Restated Investment Management Trust Agreement | |
(d)(8) | Registration Rights Agreement, dated December 13, 2012, by and among Chart Acquisition Corp., Chart Acquisition Group LLC, Cowen Overseas Investment LP and the other signatories thereto (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on December 19, 2012). | |
(d)(9) | Promissory Note, dated February 7, 2014, issued to Joseph R. Wright (incorporated by reference to Exhibit 10.13 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(10) | Promissory Note, dated February 4, 2014, issued to Cowen Overseas LP (incorporated by reference to Exhibit 10.14 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(11) | Promissory Note, dated February 11, 2014, issued to Chart Acquisition Group (incorporated by reference to Exhibit 10.15 to the Form 10-K filed by Chart Acquisition Corp. on March 17, 2014). | |
(d)(12) | Form of Convertible Promissory Note, dated September 9, 2014 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(13) | Promissory Note, dated February 11, 2014, issued to Chart Acquisition Group (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(14) | Form of Promissory Note, dated February 4, 2015 (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on February 5, 2015). | |
(d)(15) | Amended and Restated Escrow Agreement, dated September 12, 2014, by and among Chart Acquisition Group, LLC, Joseph R. Wright, Cowen Overseas Investment LP, Continental Stock Transfer & Trust Company, Deutsche Bank Securities, Inc. and Cowen and Company, LLC (incorporated by reference to Exhibit 10.5 to the Form 8-K filed by Chart Acquisition Corp. on September 12, 2014). | |
(d)(16)* | Form of Second Amended and Restated Escrow Agreement. | |
(d)(17) | Agreement and Plan of Merger, dated January 5, 2015, by and among Tempus Applied Solutions, LLC, the Members of Tempus Applied Solutions, LLC, the Members’ Representative, Chart Acquisition Corp., Tempus Applied Solutions Holdings, Inc., Chart Merger Sub Inc., TAS Merger Sub LLC, the Chart Representative and the Warrant Offerors (incorporated by reference to Exhibit 2.1 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(d)(18) | Supporting Stockholder Agreement, dated January 5, 2015, by and among Tempus Applied Solutions LLC, the Members’ Representative and the stockholders of Chart Acquisition Corp. named therein (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(d)(19) | Form of Registration Rights Agreement by and among Tempus Applied Solutions Holdings, Inc. and the stockholders of Tempus Applied Solutions Holdings, Inc. named therein (incorporated by reference to Exhibit 10.2 to the Form 8-K filed by Chart Acquisition Corp. on January 7, 2015). | |
(g) | Preliminary Proxy Statement of the Company (incorporated by reference to the Preliminary Proxy Statement on Schedule 14A filed by Chart Acquisition Corp. on February 6, 2015). | |
(h) |
Not applicable. |
8
EXHIBIT (a)(1)(A)
CHART
ACQUISITION GROUP LLC,
JOSEPH R. WRIGHT AND
COWEN INVESTMENTS LLC
OFFER
TO PURCHASE FOR CASH
UP TO 7,492,300 WARRANTS TO PURCHASE COMMON STOCK
of
CHART
ACQUISITION CORP.
at a Purchase Price of $0.30 Per Warrant
THIS
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY |
Chart Acquisition Group LLC (“Sponsor”), Joseph R. Wright (“Mr. Wright”), and Cowen Investments LLC (“Cowen”), an affiliate of Cowen and Company, LLC, one of the lead underwriters in Chart Acquisition Corp.’s (“Chart” or the “Company”) initial public offering (the “IPO”) (Sponsor, Mr. Wright and Cowen collectively referred to as the “Purchasers”, “we”, “us” or “our”), hereby offer to purchase up to 7,492,300 of the outstanding warrants of the Company (the “Warrants”, or specifically, when referring to the warrants issued in the IPO, the “Public Warrants”) to purchase common stock, $0.0001 par value per share (the “Common Stock”) of the Company at a purchase price of $0.30 per Warrant, in cash, without interest (the “Purchase Price”), for an aggregate Purchase Price of up to $2,247,690 upon the terms and subject to certain conditions described in this offer to purchase (the “Offer to Purchase”) and in the related letter of transmittal (“Letter of Transmittal”) (which together, as they may be amended or supplemented from time to time, constitute the “Offer”). The Purchasers, The Chart Group L.P., the managing member of the Sponsor, and RCG LV Pearl LLC, the sole member of Cowen and a subsidiary of Cowen Group, Inc., have filed a Schedule TO with the Securities and Exchange Commission (“SEC”) in connection with the Offer, and are referred to herein collectively as the “Filing Persons”.
The Company filed a preliminary proxy statement with the SEC on February 6, 2015 announcing a special meeting at which the Company will seek approval of its stockholders of proposals (the “Proposals”) to (i) amend Chart’s amended and restated articles of incorporation (the “Charter”) to extend the date before which Chart must complete a business combination from March 13, 2015 (the “Current Termination Date”) to June 13, 2015 (the “Extended Termination Date”) and allow holders of the Company’s public shares to redeem their public shares for a pro rata portion of the funds available in the trust account (the “Extension Amendment”) and (ii) amend the amended and restated investment trust agreement established in connection with the IPO to reflect the Extended Termination Date and permit distributions from the trust account established by the Company in connection with the IPO (the “Trust Account”) to holders of its public shares properly demanding redemption in connection with the Extension Amendment (the “Trust Amendment”). If the Extension Amendment and the Trust Amendment are approved (and not abandoned), Chart will afford its public stockholders the right to redeem their shares for a pro rata portion of the funds available in the Trust Account at the time the Extension Amendment and the Trust Amendment become effective.
The purpose of the Extension Amendment and the Trust Amendment is to allow the Company more time to complete its proposed business combination pursuant to which Chart and Tempus Applied Solutions, LLC (“Tempus”) will combine under a new holding company called Tempus Applied Solutions Holdings, Inc. (“Tempus Holdings”) in accordance with the terms and provisions of the Agreement and Plan of Merger, dated January 5, 2015, by and among Tempus, the members of Tempus, the members’ representative, the Company, Tempus Holdings, Chart Merger Sub Inc., TAS Merger Sub LLC, the Chart representative and the Purchasers. As a result, the Company’s board of directors determined that it was in the best interests of the Company’s stockholders to extend the termination date from the Current Termination Date to the Extended Termination Date, and provide that the date for cessation of operations of the Company if the Company has not completed a business combination would similarly be extended.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), Chart will amend the terms of its outstanding Warrants to extend the date for
automatic termination of the Warrants if the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date. Holders of Public Warrants (the “Holders”) will continue to have five years from the consummation of the Company’s business combination to exercise such Warrants. See “The Offer – Section 11. Important Information Concerning the Company – Summary of the Warrants.”
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), the Purchasers have agreed with the other parties to the amended and restated escrow agreement (the “Escrow Agreement”) pursuant to which the Purchasers initially deposited an aggregate of $2,250,000 (of which $2,247,690 remains as discussed below) for the benefit of the Holders to amend the Escrow Agreement to provide that the termination event thereunder will be revised to reflect the Extended Termination Date rather than the Current Termination Date and to permit the release of a portion of the escrow funds in connection with the Offer in order to fund the payment to be made by the Purchasers pursuant to the Offer.
The Purchasers are making the Offer to purchase the Warrants to provide Warrant holders with an opportunity to tender their Warrants in connection with, and contingent upon, approval of the Proposals and the effectiveness of the Extension Amendment and the Trust Amendment. See “The Offer—Section 2. Purposes of the Offer; Certain Effects of the Offer.”
Only Warrants validly tendered as provided herein, and not properly withdrawn, will be purchased pursuant to the Offer. All Warrants tendered and not purchased pursuant to the Offer will be returned to the tendering Warrant holders at our expense promptly following the Expiration Date. See “The Offer—Section 3. Procedures for Tendering Warrants.”
The Offer is not conditioned on any minimum number of Warrants being tendered and financing is not a condition to the Offer. The Offer is, however, subject to certain other conditions, including the approval of the Proposals, the effectiveness of the Extension Amendment and the Trust Amendment and the satisfaction of the “Rule 13e-3 transaction” condition. See “The Offer—Section 6. Conditions of the Offer.”
The Warrants are listed and traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CACGW”. On February 9, 2015, the closing price of the Warrants reported on Nasdaq was $0.55 per Warrant. Warrant holders are urged to obtain current market quotations for the Warrants before deciding whether to tender their Warrants pursuant to the Offer. See “The Offer—Section 7. Price Range of Common Stock, Warrants and Units.”
None of the Company, the Filing Persons, the Company’s board of directors, Morrow & Co., LLC, the information agent for the Offer (the “Information Agent”), or Continental Stock Transfer & Trust Company, the depositary for the Offer (“Continental” or the “Depositary”), is making any recommendation to you as to whether to tender or refrain from tendering your Warrants pursuant to the Offer. You must make your own decision as to whether to tender your Warrants and, if so, how many Warrants to tender. In doing so, you should read carefully the information in this Offer to Purchase and in the related Letter of Transmittal, including the purposes and effects of the Offer. See “The Offer —Section 2. Purposes of the Offer; Certain Effects of the Offer.” You should discuss whether to tender your Warrants with your own broker or other financial advisor, if any.
Neither the SEC nor any state securities commission has approved or disapproved this transaction, or passed upon the merits or fairness of the transaction or the accuracy or adequacy of the information contained in the Offer. Any representation to the contrary is a criminal offense.
Questions and requests for assistance regarding the Offer and requests for additional copies of the Offer to Purchase and the Offer documents may be directed to the Information Agent, at the telephone numbers and address set forth on the back cover of this Offer to Purchase.
February 11, 2015
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TABLE OF CONTENTS
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Page |
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SUMMARY TERM SHEET AND QUESTIONS AND ANSWERS |
5 |
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RISK FACTORS |
13 |
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THE PROPOSALS |
16 |
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THE BUSINESS COMBINATION |
17 |
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THE OFFER |
21 |
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Section 1. Number of Warrants; Purchase Price; No Proration |
21 |
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Section 2. Purposes of the Offer; Certain Effects of the Offer |
21 |
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Section 3. Procedures for Tendering Warrants |
23 |
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Section 4. Withdrawal Rights |
26 |
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Section 5. Purchase of Warrants and Payment of Purchase Price |
27 |
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Section 6. Conditions of the Offer |
28 |
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Section 7. Price Range of Common Stock, Warrants and Units; Dividends |
29 |
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Section 8. Source and Amount of Funds |
29 |
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Section 9. Interests of Directors and Executive Officers; Certain Agreements |
29 |
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Section 10. Material U.S. Federal Income Tax Consequences |
31 |
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Section 11. Important Information Concerning the Company. |
33 |
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Section 12. Certain Legal Matters; Regulatory Approvals |
38 |
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Section 13. Extension of the Offer; Termination; Amendment |
39 |
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Section 14. Fees and Expenses |
40 |
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Section 15. Miscellaneous |
40 |
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WHERE YOU CAN FIND ADDITIONAL INFORMATION |
41 |
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IMPORTANT
If you desire to tender all or any portion of your Warrants, you must do one of the following before the Offer expires:
• If your Warrants are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such nominee and have such nominee tender your Warrants for you;
• If you hold Warrants registered in your own name, you must complete and sign a Letter of Transmittal in accordance with its instructions and deliver it, together with any required signature guarantees, the Warrants and any other documents required by the Letter of Transmittal, to the Depositary at the address shown on the back cover of this Offer to Purchase. Do not send such materials to the Company or the Information Agent;
• If you are an institution participating in The Depository Trust Company, you must tender your Warrants according to the procedure for book-entry transfer described in “The Offer—Section 3. Procedures for Tendering Warrants”; or
• If you are the holder of units of the Company (“Units”), you must separate the Warrants from the Units prior to tendering your Warrants pursuant to the Offer. If your Units are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must instruct such nominee to do so or, if you hold Units registered in your own name, you must contact the Depositary directly and instruct it to do so. If you fail to cause your Warrants to be separated in a timely manner before the Offer expires, you will likely not be able to validly tender such Warrants prior to the expiration of the Offer.
We have not authorized anyone to provide you with information or to make any representation in connection with the Offer other than those contained in this Offer to Purchase or in the related Letter of Transmittal. You should rely only on the information contained in this Offer to Purchase and the other related documents delivered to you or to which we have referred you. If anyone makes any recommendation or gives any information or representation regarding the Offer, you must not, except as may be expressly provided herein, rely upon that recommendation, information or representation as having been authorized by us, the Information Agent, or the Depositary for the Offer. No later than ten business days from the date of this Offer to Purchase, the Company is required by law to publish, send or give to you a statement disclosing whether its board of directors either recommends acceptance or rejection of the Offer, expresses no opinion and remains neutral toward the Offer or is unable to take a position with respect to the Offer. You should carefully read the information set forth in that statement before you tender your Warrants in the Offer.
Subject to applicable law (including Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which requires that material changes be promptly disseminated to security holders in a manner reasonably designed to inform them of such changes), delivery of this Offer to Purchase shall not under any circumstances create any implication that the information contained or incorporated by reference in this Offer to Purchase is correct as of any time after the date of this Offer to Purchase or the respective dates of the documents incorporated herein by reference or that there has been no change in the information included or incorporated by reference herein or in the affairs of the Company or any of its subsidiaries or affiliates since the date hereof or the respective dates of the documents incorporated herein by reference. See “Summary Term Sheet and Questions and Answers.”
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SUMMARY TERM SHEET AND QUESTIONS AND ANSWERS
This summary term sheet highlights important information regarding the Offer and this Offer to Purchase. To understand the Offer fully and for a more complete description of the terms of the Offer, you should carefully read this entire Offer to Purchase and the related Letter of Transmittal that constitute the Offer. We have included references to the sections of this Offer to Purchase where you will find a more complete description of the topics addressed in this Summary Term Sheet.
Securities Subject of the Offer |
Up to 7,492,300 Warrants to purchase common stock of Chart. |
Price Offered Per Warrant |
$0.30 net to the seller in cash, without interest thereon (the “Purchase Price”). |
Scheduled Expiration of Offer |
12:00 midnight, New York City time, at the end of the day on March 11, 2015, or such later time and date to which we may extend the Offer (the “Expiration Date”). |
Parties Making the Offer |
Chart Acquisition Group LLC, the Company’s sponsor, Joseph R. Wright, the Company’s chairman and chief executive officer, and Cowen. |
For further information regarding the Offer, see “The Offer.”
The Proposals
What are the Proposals?
The Company filed a preliminary proxy statement with the Securities and Exchange Commission (“SEC”) on February 6, 2015 announcing a special meeting at which the Company will seek approval of its stockholders of proposals (the “Proposals”) to (i) amend Chart’s amended and restated articles of incorporation (the “Charter”) to extend the date before which Chart must complete a business combination from March 13, 2015 (the “Current Termination Date”) to June 13, 2015 (the “Extended Termination Date”) and allow holders of the Company’s public shares to redeem their public shares for a pro rata portion of the funds available in the trust account (the “Extension Amendment”) and (ii) amend the amended and restated investment trust agreement established in connection with the IPO to reflect the Extended Termination Date and permit distributions from the Trust Account to holders of its public shares properly demanding redemption in connection with the Extension Amendment (the “Trust Amendment”). If the Extension Amendment and the Trust Amendment are approved (and not abandoned), Chart will afford its public stockholders the right to redeem their shares for a pro rata portion of the funds available in the Trust Account at the time the Extension Amendment and the Trust Amendment become effective.
The purpose of the Extension Amendment and the Trust Amendment is to allow the Company more time to complete its proposed business combination pursuant to which Chart and Tempus will combine under a new holding company called Tempus Applied Solutions Holdings, Inc. (“Tempus Holdings”) in accordance with the terms and provisions of the Agreement and Plan of Merger, dated January 5, 2015 (the “Merger Agreement”), by and among Tempus, the members of Tempus (the “Sellers”), Benjamin Scott Terry and John G. Gulbin III, together, in their capacity under the Merger Agreement as the representative of the Sellers for the purposes set forth therein (the “Members’ Representative”), the Company, Tempus Holdings, Chart Merger Sub Inc. (“Chart Merger Sub”), TAS Merger Sub LLC (“TAS Merger Sub”), Chart Acquisition Group LLC in its capacity under the Merger Agreement as the representative of the equity holders of Chart and Tempus Holdings (other than the Sellers and their successors and assigns) in accordance with the terms thereof (the “Chart Representative”) and the Purchasers. As a result, the Company’s board of directors determined that it was in the best interests of the Company’s stockholders to extend the termination date from the Current Termination Date to the Extended Termination Date, and provide that the date for cessation of operations of the Company if the Company has not completed a business combination would similarly be extended.
In connection with the Merger Agreement, the Purchasers and Christopher D. Brady (collectively, the “Chart Stockholders”) entered into a supporting stockholder agreement, dated as of January 5, 2015 (the “Supporting Stockholder Agreement”), with Tempus and the Members’ Representative. Pursuant to the Supporting Stockholder Agreement, the Chart Stockholders (solely in their capacity as stockholders, and not in any capacity as an officer or director) have agreed, among other things, that from the signing date until the termination of the Supporting Stockholder Agreement (the “Voting Period”), to vote all of the shares of Chart common stock held by them (currently 1,766,250 shares of Chart common stock, representing as of the date hereof approximately 20.1%
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of the voting power of Chart in the aggregate) (a) in favor of (i) the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, (ii) the adoption of the Incentive Plan (as defined below) and (iii) any amendment to Chart’s existing charter and trust agreements to extend the deadline for Chart to consummate its initial business combination, if needed, and (b) against alternative proposals, agreements or transactions to the business combination (except as permitted by the Merger Agreement). The Chart Stockholders also agreed during the Voting Period not to submit their shares of Chart common stock to be redeemed by Chart or to otherwise cause such shares to be repurchased or redeemed. The Supporting Stockholder Agreement will automatically terminate upon the first to occur of (i) the mutual written consent of the parties thereto, (ii) the closing of the business combination, or (iii) the termination of the Merger Agreement in accordance with its terms.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), Chart will amend the terms of its outstanding Warrants to extend the date for automatic termination of the Warrants if the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date. The Holders will continue to have five years from the consummation of the Company’s business combination to exercise such Warrants. See “The Offer – Section 11. Important Information Concerning the Company; Summary of the Warrants.”
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), the Purchasers have agreed with the other parties to the Escrow Agreement to amend the Escrow Agreement to provide that the termination event thereunder will be revised to reflect the Extended Termination Date rather than the Current Termination Date and to permit the release of a portion of the escrow funds in connection with the Offer in order to fund the payment to be made by the Purchasers pursuant to the Offer (the “Escrow Amendment”).
Are the Offer and the Proposals Conditioned on one another?
Yes. If the Extension Amendment and the Trust Amendment are not approved by sixty-five percent or more of the outstanding shares of Common Stock before the expiration of the Offer, or if they are abandoned by the Company, the Offer will be terminated. In such case, we will terminate the Offer and will promptly return any Warrants, at our expense, that were delivered pursuant to the Offer.
Is there other information about the Proposals that I should be aware of?
Yes. In addition to the information contained in this Offer to Purchase, you should carefully review the Company’s preliminary proxy statement, which was filed by the Company with the SEC on February 6, 2015, and the definitive proxy statement, when available. The preliminary proxy statement contains, among other things, important information about the Proposals and the proposed business combination. You should also carefully review the complete text of the Merger Agreement attached as Exhibit 2.1 to the Form 8-K filed by the Company with the SEC on January 7, 2015. In addition, you should carefully review the registration statement on Form S-4, as amended, initially filed by Tempus Holdings on January 9, 2015 for more information about the proposed business combination.
The Business Combination
What is the business combination?
On January 5, 2015, Chart entered into the Merger Agreement with Tempus, the Sellers, the Members’ Representative, Tempus Holdings, Chart Merger TAS Merger Sub, the Chart Representative and, for the limited purposes set forth therein, the Purchasers.
Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, (i) Chart Merger Sub will merge with and into Chart, with Chart being the surviving entity and a wholly-owned subsidiary of Tempus Holdings (such merger, the “Chart Merger”), (ii) Tempus Merger Sub will merge with and into Tempus, with Tempus being the surviving entity and a wholly owned-subsidiary of Tempus Holdings (such merger, the “Tempus Merger”), and (iii) Tempus Holdings will become a publicly traded company. The Chart Merger and the Tempus Merger (together, the “Mergers”) will occur simultaneously upon the consummation of the business combination (the “Closing”). Chart, Tempus Holdings, Chart Merger Sub and Tempus Merger Sub may collectively be referred to herein in reference to the Merger Agreement as the “Chart Parties”.
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In the Chart Merger, the outstanding equity securities of Chart will be cancelled and the holders of outstanding shares of Chart common stock and warrants will receive substantially identical securities of Tempus Holdings. In the Tempus Merger, the outstanding membership interests of Tempus will be cancelled in exchange for the right of the Sellers to receive as the aggregate merger consideration 5,250,000 shares of Tempus Holdings common stock, subject to certain adjustments, plus an additional right to receive potentially up to 4,750,000 shares of Tempus Holdings common stock as an earn-out if certain financial milestones are achieved (such additional shares, the “Earn-out Shares”).
As a result of the consummation of the business combination, each of Chart Merger Sub and Tempus Merger Sub will cease to exist, Chart and Tempus will become wholly-owned subsidiaries of Tempus Holdings, and the equity holders of Chart and Tempus will become the stockholders of Tempus Holdings.
See “The Business Combination” for a more complete description of the terms and provisions of the Merger Agreement and related transactions.
Are the Offer and the business combination conditioned on one another?
No. The consummation of the business combination with Tempus is independent of the Offer. Chart will mail a separate definitive proxy statement to seek stockholder approval for the proposed business combination.
Is there other information about the proposed business combination with Tempus that I should be aware of?
Yes. In addition to the information contained in this Offer to Purchase, you should carefully review the complete text of the Merger Agreement attached as Exhibit 2.1 to the Form 8-K filed by the Company with the SEC on January 7, 2015. You should also review the registration statement on Form S-4, as amended, initially filed by Tempus Holdings on January 9, 2015, which includes a preliminary proxy statement with respect to the proposed business combination, and contains, among other things, important information about, and the various risks associated with, the proposed business combination with Tempus.
The Offer
Who is offering to purchase the Warrants?
The Sponsor, Mr. Wright, the chairman and chief executive officer of Chart, and Cowen, an affiliate of Cowen and Company, LLC, one of the lead underwriters in the IPO are making an offer to buy your Warrants.
For purposes of this Offer to Purchase, “Cowen” means, as applicable, Cowen Investments LLC, a Delaware limited liability company, or Cowen Overseas Investment LP, a Cayman Island limited partnership, each of which is an affiliate of Cowen and Company, LLC, one of the representatives of the underwriters of the IPO, or their respective affiliates. Cowen Investments LLC is the assignee of the shares of Chart common stock and Chart warrants owed by Cowen Overseas Investment LP.
What is the background and purpose of the Offer?
The Company was organized under the laws of the State of Delaware on July 22, 2011 for the purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more operating businesses or assets.
On December 19, 2012, the Company consummated its IPO of 7,500,000 Units (the “Units”), each Unit consisting of one share of Common Stock and a Warrant to purchase one share of Common Stock, pursuant to the registration statement on Form S-1 (File No. 333-177280) (the “Registration Statement”) which was declared effective by the SEC on December 13, 2012. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $75,000,000.
Simultaneously with the closing of the IPO, the Company closed a private placement pursuant to which it sold to the Purchasers (or their affiliates) 375,000 placement units (“Placement Units”), consisting of one placement share of Common Stock and one placement warrant (“Placement Warrant”), at a purchase price of $10.00 per Placement Unit, for a total purchase price of $3,750,000. The Sponsor purchased 231,250 Placement Units, Cowen purchased
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131,250 Placement Units, and Mr. Wright purchased 12,500 Placement Units. As a result of the IPO, the Company raised gross proceeds of $75,000,000 (excluding proceeds from the Placement Units), the net proceeds of which, with the net proceeds from the sale of the Placement Units, were placed in the Trust Account pursuant to an investment management trust agreement between the Company and Continental as trustee.
In connection with the IPO, the Purchasers collectively committed to offer to purchase up to 3,750,000 of the Warrants at a purchase price of $0.60 per Warrant in a proposed tender offer that would commence after the announcement by the Company of a business combination and would close upon the consummation of such business combination. In the event the Company failed to consummate a business combination, the Warrant holders would receive a pro rata distribution of the amount in the segregated escrow account (the “Escrow Account”) established with Continental Stock Transfer & Trust Company (“Continental”) pursuant to the Escrow Agreement in the amount of $0.30 for each Warrant they hold, which absent such a distribution as with other blank check companies, would expire worthless.
The Purchasers initially deposited an aggregate of $2,250,000 into the Escrow Account pursuant to the terms of the Escrow Agreement, which funds were to be used for the purchase of the Chart warrants validly tendered in a tender offer to be conducted in connection with a business combination. In August 2014, the Purchasers commenced a tender offer (the “Initial Warrant Tender Offer”) to purchase up to 7,500,000 of Chart’s issued and outstanding warrants at a purchase price of $0.30 per warrant in connection with a special meeting of Chart’s stockholders to approve, among other matters, an amendment to Chart’s existing charter extending the date by which Chart must consummate its initial business combination from September 13, 2014 to March 13, 2015. A total of 7,700 warrants were validly tendered and not withdrawn in the Initial Warrant Tender Offer. In September 2014, the Purchasers accepted for purchase all such warrants for an aggregate purchase price of $2,310, and $2,247,690 remains in the escrow account.
As a result, the Purchasers intend to commence the Business Combination Tender Offer (as defined below) to purchase, collectively, up to 3,746,150 public warrants at $0.60 per warrant (subject to proration), which will be consummated, if at all, upon the consummation of the business combination. The purpose of the Business Combination Tender Offer is to provide holders of public warrants that may not wish to retain their public warrants following the business combination the possibility of receiving cash for their public warrants.
In connection with the Extension Amendment, the Purchasers have collectively agreed to conduct the Offer to purchase up to 7,492,300 of the outstanding Warrants at a price of $0.30 per Warrant in connection with, and contingent upon, approval of the Proposals and the effectiveness of the Extension Amendment and the Trust Amendment. The Purchasers are making the Offer to purchase the Warrants to provide holders of the Warrants that may not wish to retain their Warrants following the Current Termination Date the possibility of receiving cash for their Warrants and enable them to receive the same $0.30 per Warrant they would have been entitled to receive if the Company liquidated promptly after the Current Termination Date. See “The Proposals.”
If the Offer is consummated, the Company’s public stockholders will suffer no dilutive effect as the overall number of outstanding Warrants will remain unchanged. However, the relative voting power of the Purchasers with respect to the Company’s public stockholders on a fully diluted basis will increase based on their greater shareholding on an “as exercised” basis.
What will happen if I do not tender my Warrants?
The treatment of your Warrants will differ depending on (1) whether the Proposals are approved and the Extension Amendment and the Trust Amendment are effective and (2) whether the Company consummates a business combination by the Extended Termination Date.
If the Extension Amendment and the Trust Amendment are not effective by the Current Termination Date, holders of any outstanding Warrants will receive a pro rata distribution of the amount in the Escrow Account (representing $0.30 per Warrant for up to 7,492,300 Warrants) in the amount of $0.30 per Warrant as promptly as reasonably possible but no more than five business days after the Current Termination Date since the Company may not have consummated its business combination by such date and the Warrants will expire worthless.
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The Purchasers have also agreed, subject to the limitations set forth in the Merger Agreement, to conduct a tender offer (the “Business Combination Tender Offer”) to purchase up to 3,746,150 (subject to reduction of one Warrant for every two Warrants that are tendered in the Offer) of the outstanding Warrants at a price of $0.60 per Warrant, in connection with, and subject to, the consummation of the Company’s proposed business combination with Tempus. If the Company consummates the proposed business combination with Tempus, you will have an opportunity to tender your Warrants (which may be proportionately reduced based on the number of Warrants tendered in the Offer) at a purchase price of $0.60 per Warrant in connection therewith. The Business Combination Tender Offer will be subject to proration to the extent more than 3,746,150 Warrants (or such reduced number of Warrants as discussed above) are properly tendered and not properly withdrawn.
Assuming the consummation of the proposed business combination with Tempus, if you do not tender your Warrants in the Offer or in the Business Combination Tender Offer, any such Warrants will become exercisable 30 days after the consummation of the proposed business combination with Tempus and for a period of five years thereafter.
If the Proposals are approved and the Extension Amendment and the Trust Amendment are effective by the Current Termination Date but the Company is unable to close the proposed business combination with Tempus by the Extended Termination Date, holders of any outstanding Warrants at such time will receive a pro rata distribution of the amount in the Escrow Account in the amount of $0.30 per Warrant as promptly as reasonably possible but no more than five business days thereafter and such Warrants will expire worthless.
How many Warrants are the Purchasers offering to purchase?
The Purchasers are offering to purchase up to 7,492,300 of the outstanding Warrants. See “The Offer—Section 1. Number of Warrants; Purchase Price; No Proration.”
What will be the Purchase Price for the Warrants and what will be the form of payment?
The Purchase Price for the Offer is $0.30 per Warrant, in cash, without interest. All Warrants that we purchase in the Offer will be purchased at the Purchase Price. If you properly tender your Warrants in the Offer and the Offer is not terminated, we will pay you the Purchase Price promptly after the Expiration Date. Under no circumstances will we pay interest on the Purchase Price, including but not limited to, by reason of any delay in making payment. See “The Offer—Section 1. Number of Warrants; Purchase Price; No Proration” and “—Section 5. Purchase of Warrants and Payment of Purchase Price.”
Are Common Stock or Units included in the Offer?
No. The Offer is only for Warrants. You may not tender Common Stock or Units (each Unit consisting of a share of Common Stock and a Warrant). If you wish to tender Warrants included in such Units, you must first separate the Warrants from the Units prior to tendering your Warrants pursuant to the Offer. If your Units are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must instruct your nominee to do so, or if you hold Units registered in your own name, you must contact Continental, the Company’s transfer agent, directly and instruct them to do so. If you fail to cause your Warrants to be separated in a timely manner before the Offer expires, you will likely not be able to validly tender such Warrants prior to the Expiration Date. See “The Offer—Section 3. Procedures for Tendering Warrants.” Holders of Common Stock issued in the IPO may elect to redeem their shares in connection with the Proposals, subject to certain restrictions as further described in the preliminary proxy statement filed by the Company with the SEC on February 6, 2015 (the “Extension Redemption”). The Extension Redemption will be consummated, if at all, upon the effectiveness of the Proposals.
How will the Purchasers pay for the Warrants?
We will pay the Purchase Price for the Warrants by using the remaining $2,247,690 of the $2,250,000 initially deposited by the Purchasers into the Escrow Account. These funds were initially deposited by the Purchasers in connection with the IPO. The funds held in the Escrow Account are invested only in United States government treasury bills with a maturity of 180 days or less or in money market funds that invest solely in United States government treasury bills with a maturity of 180 days or less.
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How long do I have to tender my Warrants?
You may tender your Warrants pursuant to the Offer until the Offer expires. The Offer will expire at 12:00 midnight, New York City time, at the end of the day on March 11, 2015, or such later time and date to which we may extend the Offer. See “The Offer—Section 1. Number of Warrants; Purchase Price; No Proration” and “—Section 13. Extension of the Offer; Termination; Amendment.”
If a broker, dealer, commercial bank, trust company or other nominee holds your Warrants, it is likely such nominee has established an earlier deadline for you to act to instruct such nominee to accept the Offer on your behalf. We urge you to contact your nominee to find out the nominee’s deadline. See “The Offer – Section 3. Procedures for Tendering Warrants.”
Can the Offer be extended, amended or terminated?
We may elect to extend or amend the Offer for any reason. If we extend the Offer, we will delay the acceptance of any Warrants that have been tendered pursuant to the Offer prior to such extension. We can also terminate the Offer under certain circumstances. See “The Offer – Section 6. Conditions of the Offer” and “The Offer – Section 13. Extension of the Offer; Termination; Amendment.”
How will I be notified if the Offer is extended or amended?
If the Offer is extended, we will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date. We will announce any amendment to the Offer by making a public announcement of the amendment. See “The Offer – Section 13. Extension of the Offer; Termination; Amendment.”
Are there any conditions to the Offer?
The Offer is conditioned upon the approval of the Proposals, the effectiveness of the Extension Amendment and the Trust Amendment and the satisfaction of the “Rule 13e-3 transaction” condition. See “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer” and “The Offer – Section 6. Conditions of the Offer.”
How do I tender my Warrants?
If you desire to tender all or any portion of your Warrants prior to the Expiration Date, you must do one of the following:
• If your Warrants are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such nominee and have such nominee tender your Warrants for you;
• If you hold Warrants registered in your own name, you must complete and sign a Letter of Transmittal in accordance with its instructions and deliver it, together with any required signature guarantees, the Warrants and any other documents required by the Letter of Transmittal, to the Depositary;
• If you are an institution participating in The Depository Trust Company, you must tender your Warrants according to the procedure for book-entry transfer described in “The Offer – Section 3. Procedures for Tendering Warrants”; or
• If you are the holder of Units, each Unit consisting of a share of Common Stock and a Warrant, and wish to tender Warrants included in such Units, you must first separate the Warrants from the Units prior to tendering your Warrants pursuant to the Offer. If your Units are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must instruct your nominee to do so or, if you hold Units registered in your own name, you must contact Continental, the Company’s transfer agent, directly and instruct them to do so. If you fail to cause your Warrants to be separated in a timely manner before the Offer expires, you will likely not be able to validly tender such Warrants prior to the Expiration Date.
You may contact the Information Agent or your broker, dealer, commercial bank, trust company or other nominee holding your Warrants for assistance. The contact information for the Information Agent is set forth on the back cover of this Offer to Purchase.
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Until what time can I withdraw previously tendered Warrants?
You may withdraw your tendered Warrants at any time before the Expiration Date and, unless theretofore accepted for payment by the Purchasers pursuant to the Offer, you may also withdraw your tendered Warrants at any time after April 11, 2015. See “The Offer – Section 4. Withdrawal Rights.”
How do I withdraw Warrants previously tendered?
If you hold Warrants registered in your own name you must deliver on a timely basis a written notice of your withdrawal to the Depositary at the address appearing on the back cover page of this Offer to Purchase. Your notice of withdrawal must specify your name, the number of Warrants to be withdrawn and the name of the registered holder of such Warrants. Some additional requirements apply if the Warrants to be withdrawn have been delivered to the Depositary or if your Warrants have been tendered under the procedure for book-entry transfer set forth in “The Offer – Section 3. Procedures for Tendering Warrants.” If your Warrants are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such nominee to withdraw your Warrants. It is possible they have an earlier deadline for you to act to instruct them to withdraw Warrants on your behalf.
Has the Company or its board of directors adopted a position on the Offer?
None of the Filing Persons, the Information Agent, or the Depositary is making any recommendation to you as to whether you should tender or refrain from tendering your Warrants pursuant to the Offer. You must make your own decision as to whether to tender your Warrants and, if so, how many Warrants to tender. In doing so, you should read carefully the information in this Offer to Purchase and the related Letter of Transmittal. No later than ten business days from the date of this Offer to Purchase, the Company is required by law to publish, send or give to you a statement disclosing whether its board of directors either recommends acceptance or rejection of the Offer, expresses no opinion and remains neutral toward the Offer or is unable to take a position with respect to the Offer. You should carefully read the information set forth in that statement before you tender your Warrants in the Offer. You should discuss whether to tender your Warrants with your own broker or other financial advisor, if any. See “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer.”
Will the Company’s sponsor, directors and executive officers tender Warrants in the Offer?
None of the Company’s sponsor, directors or executive officers will tender their Warrants pursuant to the Offer. See “The Offer – Section 9. Interests of Directors and Executive Officers; Certain Agreements.”
When will the Purchasers pay for the Warrants I tender that are accepted for purchase?
We will pay the Purchase Price in cash, without interest, for the Warrants we purchase by authorizing the release of the aggregate Purchase Price previously deposited into the Escrow Account to the Depositary promptly after the Expiration Date and the acceptance of the Warrants for payment. The Depositary will act as your agent and will transmit to you the payment for all of your Warrants accepted for payment. See “The Offer – Section 5. Purchase of Warrants and Payment of Purchase Price.”
What is the recent market price for the Warrants?
On February 9, 2015, the most recent practicable date prior to the date of this Offer to Purchase, the closing price of the Warrants reported on Nasdaq was $0.55 per Warrant. You are urged to obtain current market quotations for the Warrants before deciding whether to tender your Warrants. See “The Offer – Section 7. Price Range of Common Stock, Warrants and Units; Dividends.”
Will I have to pay brokerage fees and commissions if I tender my Warrants?
If you are a registered Warrant holder and you tender your Warrants directly to the Depositary, you will not incur any brokerage fees or commissions.
If you hold your Warrants through a broker, dealer, commercial bank, trust company or other nominee and such nominee will tender Warrants on your behalf, such nominee may charge you a fee for doing so. We urge you to
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consult your nominee to determine whether any charges will apply. See “The Offer – Section 3. Procedures for Tendering Warrants.”
What are the U.S. federal income tax consequences if I tender my Warrants?
The receipt of cash for your tendered Warrants generally will be treated for U.S. federal income tax purposes as a taxable sale of the Warrants so tendered. See “The Offer – Section 10. Material U.S. Federal Income Tax Consequences.”
Whom do I contact if I have questions about the Offer?
For additional information or assistance and to request additional copies of this Offer to Purchase and the Letter of Transmittal and other Offer documents, you may contact Morrow & Co., LLC, the Information Agent, at the telephone numbers and address set forth on the back cover of this Offer to Purchase.
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RISK FACTORS
You should carefully consider the following risk factors in addition to the other information included in this Offer to Purchase before you decide whether to tender Warrants in the Offer. We caution you not to place undue reliance on the forward-looking statements contained in this Offer to Purchase, which speak only as of the date of this Offer to Purchase.
There is no guarantee that your decision whether or not to tender your Warrants will put you in a better future economic position.
We can give no assurance as to the price at which a Warrant holder may be able to sell its Warrants in the future following the completion of the Offer. If the Proposals are approved and the Extension Amendment and the Trust Amendment are effective, the Purchasers intend to commence the Business Combination Tender Offer to purchase up to 3,746,150 Warrants (which number will be reduced by one Warrant for every two Warrants that are tendered in the Offer) for $0.60 per Warrant. In addition, certain events following the consummation of a business combination may cause an increase in the prices of the Warrants and shares underlying the Warrants, each of which could result in a lower value realized now than you might realize in the future had you not agreed to tender your Warrants. Similarly, if you do not tender your Warrants, you will bear the risk of ownership of your Warrants after the Offer, and there can be no assurance that you can sell your Warrants in the future for an amount equal to or greater than the Purchase Price. You should consult your own individual tax and/or financial advisor for assistance on how this may affect your individual situation.
If the Extension Amendment and the Trust Amendment are not approved or are abandoned by the Company, the Offer will be terminated.
The Offer is contingent upon approval of the Proposals and the effectiveness of the Extension Amendment and the Trust Amendment. If the Extension Amendment and the Trust Amendment are not approved or are abandoned by the Company, we will terminate the Offer and, if the Company is unable to consummate a business combination by the Current Termination Date (assuming the Proposals are not effective), the Company will, as promptly as reasonably possible but no more than five business days after the Current Termination Date, distribute the aggregate amount then on deposit in the Trust Account, pro rata to stockholders of the Company by way of redemption and cease all operations except for the purposes of winding up of its affairs and holders of any outstanding Public Warrants will receive $0.30 per Warrant as promptly as reasonably possible but no more than five business days thereafter and such Warrants will expire worthless.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned by the Company) but the Company is unable to consummate a business combination by the Extended Termination Date, the Company will, as promptly as reasonably possible but no more than five business days after the Extended Termination Date, distribute the aggregate amount then on deposit in the Trust Account, pro rata to stockholders of the Company by way of redemption and cease all operations except for the purposes of winding up of its affairs and holders of any outstanding Public Warrants will receive $0.30 per Warrant as promptly as reasonably possible but no more than five business days thereafter and such Warrants will expire worthless.
Following the consummation of a business combination, if any, the Company may amend the terms of the Warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then outstanding Public Warrants.
The Warrants were issued in registered form under a Warrant Agreement with Continental, as warrant agent (the “Warrant Agent”), and the Company. 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 the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders. Accordingly, the Company may amend the terms of the Warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding Public Warrants approve of such amendment.
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If the Offer is terminated, the Warrants will expire even if the Extension Amendment and the Trust Amendment are approved.
If the Offer is terminated, the Warrants will expire even if the Extension Amendment and the Trust Amendment are approved. In such case, holders of any outstanding Public Warrants will receive $0.30 per Warrant as promptly as reasonably possible but no more than five business days thereafter and such Warrants will expire worthless. In addition, the Purchasers will not conduct the Business Combination Tender Offer and holders of the Warrants will not be able to tender their Warrants in such tender offer for $0.60 per Warrant. However, the business combination may still proceed even if the Offer is terminated.
Following the consummation of a business combination, if any, the Company may redeem unexpired Warrants prior to their exercise at a time that is disadvantageous to a Warrant holder, thereby making such Warrants worthless.
The Company has the ability to redeem outstanding Warrants (excluding any Placement Warrants held by the Purchasers or their permitted transferees or any tendered Warrants purchased by the Purchasers) at any time after they become exercisable and prior to their expiration, at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of the Common Stock in the event the shares of the Common Stock are not traded on any specific trading day) of the Common Stock equals or exceeds $17.50 per share for any 20 trading days within a 30 trading-day period ending on the third business day prior to the date the Company sends proper notice of such redemption, provided that on the date the Company gives notice of redemption and during the entire period thereafter until the time the Company redeems the Warrants, the Company has an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available. Redemption of the outstanding Warrants could force you: (i) to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Warrants at the then-current market price when you might otherwise wish to hold on to your Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants.
There is no guarantee, even if a business combination is consummated, that the Warrants will ever be in the money and they may expire worthless.
Upon the closing of a business combination, the exercise price for the Warrants will be $11.50 per share. There is no guarantee that the Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless.
An active market for the Warrants may not develop, which would adversely affect the liquidity and price of the Warrants.
The Warrants are currently listed on Nasdaq under the symbol “CACGW”. Following a business combination, if any, the price of the Warrants may fluctuate significantly due to the market’s reaction to a business combination and general market and economic conditions. An active trading market for the Warrants may never develop or, if developed, it may not be sustained. In addition, the price of the securities after a business combination can vary due to general economic conditions and forecasts, its general business condition and the release of its financial reports. Additionally, if the Warrants are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a securities exchange, the liquidity and price of the Warrants may be more limited than if the Warrants were quoted or listed on Nasdaq or another national exchange. You may be unable to sell your Warrants unless an active market can be established or sustained.
On March 4, 2014, Chart received a written notice from Nasdaq indicating that it was not in compliance with Nasdaq Listing Rule 5550(a)(3), which requires it to have at least 300 public holders for continued listing on the exchange. Subsequently, Nasdaq accepted Chart’s plan to regain compliance with such rule and provided Chart until September 2, 2014 to evidence such compliance. On September 5, 2014, Chart received a letter from Nasdaq stating that it had failed to evidence compliance with Nasdaq Listing Rule 5550(a)(3) by September 2, 2014, and that, accordingly, Nasdaq has determined to initiate procedures to delist Chart’s securities from Nasdaq, unless it appeals such determination on or before September 12, 2014. Chart subsequently appealed Nasdaq’s delisting determination, which stayed any delisting actions until the issuance of a decision by a hearings panel. On October 16, 2014, Chart
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presented its appeal in front of a hearings panel. On October 23, 2014, Nasdaq advised Chart that the hearings panel had granted its request for continued listing subject to it completing the business combination with Tempus and achieving compliance with all Nasdaq initial listing requirements, including but not limited to Nasdaq Listing Rule 5550(a)(3), by March 4, 2015. However, there is no assurance that Chart will regain compliance with all of Nasdaq’s initial listing requirements by such date. If Chart does not regain compliance by such date, its securities will likely cease trading on Nasdaq, which may adversely affect the liquidity and trading of the securities.
If all or a significant number of the Warrants are tendered in the Offer, there is a risk that Nasdaq may delist the Warrants.
While the Warrants are currently listed on Nasdaq, if all or a significant number of the Warrants are tendered in the Offer, Nasdaq may delist the Warrants. If the Warrants are not listed on, or become delisted from, Nasdaq, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a securities exchange, the liquidity and price of the Warrants may be more limited than if the Warrants were quoted or listed on Nasdaq or another national exchange. As a result, you may have difficulty or otherwise be unable to sell your Warrants.
In the event that a significant number of Warrants are purchased in the Offer, the Warrants may become less liquid.
If a significant number of Warrants are purchased in the Offer, the Company may be left with a significantly smaller number of Warrant holders following the business combination. As a result, the number of Warrants owned by non-affiliate Warrant holders and available for trading in the securities markets following the Offer and the business combination will be reduced, which may reduce the volume of trading in the Common Stock and may result in lower stock prices and reduced liquidity in the trading of the Common Stock prior to the completion of the business combination.
Holders of the Warrants will only be able to exercise such Warrants if the issuance of Common Stock 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 on a cash basis and the Company will not be obligated to issue registered Common Stock unless the Common Stock issuable upon such exercise has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants. Because the exemptions from qualification in certain states for re-sales of Warrants and for issuances of Common Stock by the issuer upon exercise of a Warrant may be different, a Warrant may be held by a holder in a state where an exemption is not available for issuance of Common Stock upon exercise of the Warrants and the holder will be precluded from exercising the Warrant. As a result, the Warrants may be deprived of any value, the market for the Warrants may be limited and the holders of Warrants may not be able to exercise their Warrants if the Common Stock issuable upon such exercise is not qualified or exempt from qualification in the jurisdictions in which the holders of the Warrants reside.
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THE PROPOSALS
The Company filed a preliminary proxy statement with the SEC on February 6, 2015 announcing a special meeting at which the Company will seek approval of its stockholders of proposals (the “Proposals”) to (i) amend Chart’s amended and restated articles of incorporation (the “Charter”) to extend the date before which Chart must complete a business combination from March 13, 2015 (the “Current Termination Date”) to June 13, 2015 (the “Extended Termination Date”) and allow holders of the Company’s public shares to redeem their public shares for a pro rata portion of the funds available in the trust account (the “Extension Amendment”) and (ii) amend the amended and restated investment trust agreement established in connection with the IPO to reflect the Extended Termination Date and permit distributions from the Trust Account to holders of its public shares properly demanding redemption in connection with the Extension Amendment (the “Trust Amendment”). If the Extension Amendment and the Trust Amendment are approved (and not abandoned), Chart will afford its public stockholders the right to redeem their shares for a pro rata portion of the funds available in the Trust Account at the time the Extension Amendment and the Trust Amendment become effective.
The purpose of the Extension Amendment and the Trust Amendment is to allow the Company more time to complete its proposed business combination pursuant to which Chart and Tempus will combine under a new holding company, Tempus Holdings, in accordance with the terms and provisions of the Merger Agreement. As a result, the Company’s board of directors determined that it was in the best interests of the Company’s stockholders to extend the termination date from the Current Termination Date to the Extended Termination Date, and provide that the date for cessation of operations of the Company if the Company has not completed a business combination would similarly be extended.
In connection with the Merger Agreement, the Chart Stockholders entered into the Supporting Stockholder Agreement with Tempus and the Members’ Representative. Pursuant to the Supporting Stockholder Agreement, the Chart Stockholders (solely in their capacity as stockholders, and not in any capacity as an officer or director) have agreed, among other things, during the Voting Period, to vote all of the shares of Chart common stock held by them (currently 1,766,250 shares of Chart common stock, representing as of the date hereof approximately 20.1% of the voting power of Chart in the aggregate) (a) in favor of (i) the adoption of the Merger Agreement and approval of the Mergers and the other transactions contemplated by the Merger Agreement, (ii) the adoption of the Incentive Plan and (iii) any amendment to Chart’s existing charter and trust agreements to extend the deadline for Chart to consummate its initial business combination, if needed, and (b) against alternative proposals, agreements or transactions to the business combination (except as permitted by the Merger Agreement). The Chart Stockholders also agreed during the Voting Period not to submit their shares of Chart common stock to be redeemed by Chart or to otherwise cause such shares to be repurchased or redeemed. The Supporting Stockholder Agreement will automatically terminate upon the first to occur of (i) the mutual written consent of the parties thereto, (ii) the closing of the business combination, or (iii) the termination of the Merger Agreement in accordance with its terms.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), Chart will amend the terms of its outstanding Warrants to extend the date for automatic termination of the Warrants if the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date. The Holders will continue to have five years from the consummation of the Company’s business combination to exercise such Warrants. See “The Offer – Section 11. Important Information Concerning the Company; Summary of the Warrants.”
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), the Purchasers have agreed with the other parties to the Escrow Agreement to amend the Escrow Agreement to provide that the termination event thereunder will be revised to reflect the Extended Termination Date rather than the Current Termination Date and to permit the release of a portion of the escrow funds in connection with the Offer in order to fund the payment to be made by the Purchasers pursuant to the Offer.
The terms of the Proposals and related documents are described in detail in the preliminary proxy statement filed by the Company with the SEC on February 6, 2015.
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THE BUSINESS COMBINATION
On January 5, 2015, Chart entered into the Merger Agreement with Tempus, the Sellers, the Members’ Representative, Tempus Holdings, Chart Merger TAS Merger Sub, the Chart Representative and, for the limited purposes set forth therein, the Purchasers.
Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, (i) Chart Merger Sub will merge with and into Chart, with Chart being the surviving entity and a wholly-owned subsidiary of Tempus Holdings (such merger, the “Chart Merger”), (ii) Tempus Merger Sub will merge with and into Tempus, with Tempus being the surviving entity and a wholly owned-subsidiary of Tempus Holdings (such merger, the “Tempus Merger”), and (iii) Tempus Holdings will become a publicly traded company. The Chart Merger and the Tempus Merger (together, the “Mergers”) will occur simultaneously upon the consummation of the business combination (the “Closing”). Chart, Tempus Holdings, Chart Merger Sub and Tempus Merger Sub may collectively be referred to herein in reference to the Merger Agreement as the “Chart Parties”.
In the Chart Merger, the outstanding equity securities of Chart will be cancelled and the holders of outstanding shares of Chart common stock and warrants will receive substantially identical securities of Tempus Holdings. In the Tempus Merger, the outstanding membership interests of Tempus will be cancelled in exchange for the right of the Sellers to receive as the aggregate merger consideration 5,250,000 shares of Tempus Holdings common stock, subject to certain adjustments, plus an additional right to receive potentially up to 4,750,000 shares of Tempus Holdings common stock as an earn-out if certain financial milestones are achieved (such additional shares, the “Earn-out Shares”).
As a result of the consummation of the business combination, each of Chart Merger Sub and Tempus Merger Sub will cease to exist, Chart and Tempus will become wholly-owned subsidiaries of Tempus Holdings, and the equity holders of Chart and Tempus will become the stockholders of Tempus Holdings.
As consideration in the Chart Merger, each Chart stockholder will receive one share of Tempus Holdings common stock for each share of Chart common stock owned by such stockholder, and each Chart warrantholder will receive a warrant to purchase one share of Tempus Holdings common stock for each warrant to acquire one share of Chart common stock owned by such warrantholder (with the terms of such Tempus Holdings warrant otherwise being substantially identical to such Chart warrant).
As consideration in the Tempus Merger, at the Closing, the Sellers will receive in the aggregate 5,250,000 shares of Tempus Holdings common stock, subject to an upward or downward dollar-for-dollar merger consideration adjustment deliverable in shares of Tempus Holdings common stock at the Closing (with each share of Tempus Holdings common stock valued at $10.00 per share) to the extent that Tempus’ estimated working capital and/or debt as of the Closing varies from certain targets specified in the Merger Agreement. After the Closing, the merger consideration will be subject to a further upward or downward dollar-for-dollar adjustment payable in shares of Tempus Holdings common stock (with each share of Tempus Holdings common stock valued at $10.00 per share) to the extent that Tempus’ actual working capital and/or debt varies from the amounts estimated at the Closing, with such actual amounts determined by the Chart Representative, subject to a dispute resolution process in the event that the Members’ Representative disputes such calculation. Additionally, the Sellers will have the right, subject to the terms and conditions of the Merger Agreement, to receive the Earn-Out Shares, as more fully described below, if they meet the performance targets set forth in the Merger Agreement. The aggregate merger consideration payable to the Sellers, including any Earn-out Shares, will be paid pro rata to each Seller based on their membership interests in Tempus.
In addition to the 5,250,000 shares of Tempus Holdings common stock deliverable by Tempus Holdings to the Sellers at the Closing (as adjusted for Tempus working capital and debt), the Sellers will have the right to receive an additional 2,000,000 Earn-out Shares if the trailing twelve month consolidated EBITDA, as adjusted to account for normal operations, of Tempus Holdings and its subsidiaries exceeds $17,500,000 for any two consecutive fiscal quarters during the period from January 1, 2015 through June 30, 2016. The Sellers will further have the right to receive an additional 2,750,000 Earn-out Shares if the trailing twelve month consolidated EBITDA, as adjusted to account for normal operations, of Tempus Holdings and its subsidiaries exceeds $22,500,000 for any two consecutive fiscal quarters during the period from January 1, 2015 through June 30, 2016.
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The calculation of the trailing twelve month consolidated EBITDA, as adjusted to account for normal operations, of Tempus Holdings and its subsidiaries will be done each fiscal quarter by the Chart Representative after Tempus Holdings’ preparation and delivery to its board of directors of its consolidated financial statements for such fiscal quarter, subject to a dispute resolution process in the event that the Members’ Representative disputes such calculation, and any Earn-out Shares that are finally determined to be earned by the Sellers will be delivered by Tempus Holdings within 60 days after final determination that they were so earned.
The Earn-out Shares will be subject to lock-up (in addition to any lock-up restrictions set forth in the Registration Rights Agreement, as more fully described below) for the longer of 12 months from the date of the Merger Agreement and six months from the date of issuance, subject to earlier release in the event of a liquidation, merger, stock exchange or similar transaction involving Tempus Holdings. Additionally, during such lock-up period, the Earn-out Shares will be subject to claw-back by Tempus Holdings in the event that after the Earn-out Shares are issued, it is determined that there was a financial statement error, contract adjustment or other mistake or adjustment, and as a result of which, the Earn-out Shares should have not been paid.
The obligations of the parties to consummate the business combination are subject to the fulfillment (or waiver) of customary closing conditions of the respective parties. In addition, each parties’ obligations to consummate the business combination are subject to the fulfillment (or waiver) of other closing conditions, including: (a) completion of the Business Combination Tender Offer; (b) the receipt of the requisite approval from Chart stockholders of the Merger Agreement and the transactions contemplated thereby and of the Tempus Applied Solutions Holdings, Inc. 2015 Omnibus Equity Incentive Plan (the “Incentive Plan”); (c) a registration statement on Form S-4 registering the shares to be issued to Chart’s stockholders pursuant to the Merger Agreement shall have become effective; (d) the members of the board of directors of Tempus Holdings as specified in the Merger Agreement shall have been appointed to the board of directors of Tempus Holdings; and (e) Chart shall not have redeemed its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. Additionally, the obligations of the Chart Parties to consummate the business combination are subject to the fulfillment (or waiver) of other closing conditions, including, among others: (i) the combined assets and liabilities of Chart and Tempus as of the Closing (but giving effect to the Closing, including any redemptions of Chart’s public shares), are such that on a combined basis, there will be net tangible assets (stockholders’ equity) of at least $5,000,000, plus an additional amount of unrestricted cash and cash equivalents sufficient to pay for any accrued expenses of Chart, Tempus and their respective subsidiaries through the Closing and to provide Tempus Holdings and its subsidiaries (including Tempus) with sufficient working capital as of the Closing to enable them to pay for expenses required under contracts entered into by Chart, Tempus or the respective subsidiaries at or prior to the Closing, as they come due; and (ii) Tempus shall have entered into one or more contracts providing for at least $100 million of revenues payable to Tempus within 12 months after the date of the Closing. Additionally, the obligations of Tempus and the Sellers to consummate the business combination are subject to the fulfillment (or waiver) of the closing condition that Tempus Holdings shall have filed with the Secretary of State of the State of Delaware an amendment and restatement of its certificate of incorporation in the form attached to the Merger Agreement.
Chart also agreed in the Merger Agreement that if it reasonably believes that the Closing will most likely not occur prior to March 13, 2015, but that the parties to the Merger Agreement are reasonably capable of causing the Closing to occur after March 13, 2015, but prior to the 180th day after the date of the Merger Agreement, and so long as Tempus and the Sellers are not in material uncured breach of the Merger Agreement, Chart will call a special meeting of Chart’s stockholders to extend the deadline for Chart to consummate its initial business combination beyond March 13, 2015, offer to redeem its stockholders in connection with such extension, and file any proxy statement or other filings in connection therewith.
The Purchasers also agree in the Merger Agreement to commence the Business Combination Tender Offer prior to the Closing and make certain covenants, along with Chart and Tempus Holdings, with respect to the Business Combination Tender Offer and any public documents filed in connection therewith. The Purchasers also agree in the Merger Agreement that in the event that Chart seeks an extension of its deadline to consummate its initial business combination beyond March 13, 2015, the Purchasers will make a separate tender offer for the outstanding warrants of Chart for cash at a purchase price of $0.30 per warrant in connection therewith. Since Chart is seeking an extension of its deadline to consummate its initial business combination beyond March 13, 2015, the Purchasers have commenced this tender offer.
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In connection with the Merger Agreement, the Chart Stockholders entered into the Supporting Stockholder Agreement with Tempus and the Members’ Representative. Pursuant to the Supporting Stockholder Agreement, the Chart Stockholders (solely in their capacity as stockholders, and not in any capacity as an officer or director) have agreed, among other things, during the Voting Period, to vote all of the shares of Chart common stock held by them (currently 1,766,250 shares of Chart common stock, representing as of the date hereof approximately 20.1% of the voting power of Chart in the aggregate) (a) in favor of (i) the adoption of the Merger Agreement and approval of the Mergers and the other transactions contemplated by the Merger Agreement, (ii) the adoption of the Incentive Plan and (iii) any amendment to Chart’s existing charter and trust agreements to extend the deadline for Chart to consummate its initial business combination, if needed, and (b) against alternative proposals, agreements or transactions to the business combination (except as permitted by the Merger Agreement). The Chart Stockholders also agreed during the Voting Period not to submit their shares of Chart common stock to be redeemed by Chart or to otherwise cause such shares to be repurchased or redeemed. The Supporting Stockholder Agreement will automatically terminate upon the first to occur of (i) the mutual written consent of the parties thereto, (ii) the closing of the business combination, or (iii) the termination of the Merger Agreement in accordance with its terms.
As a condition to the Closing, Tempus Holdings has agreed to enter into a registration rights agreement (the “Registration Rights Agreement”) with the Sellers, pursuant to which Tempus Holdings will grant certain registration rights to the Sellers with respect to the shares of Tempus Holdings common stock to be issued to the Sellers (including any shares issued pursuant to the merger consideration adjustments under the Merger Agreement and the Earn-out Shares). Under the Registration Rights Agreement, the Sellers will have certain customary demand and piggy-back registration rights, subject to certain underwriter cutbacks and issuer blackout periods. Under the Registration Rights Agreement, Tempus Holdings will generally pay for the registration expenses (excluding underwriting discounts and commissions), and each party will have customary indemnification obligations to the other parties.
Under the Registration Rights Agreement, each of the Sellers will agree to a lock-up of their shares of Tempus Holdings common stock issued in connection with the Merger Agreement (including any shares issued pursuant to the merger consideration adjustments under the Merger Agreement and the Earn-out Shares) for a period of one year after the Closing, subject to an earlier release (i) if the price of Tempus Holdings common stock equals or exceeds $12.00 per share for any 20 trading days in any 30-trading day period commencing at least 150 days after the Closing or (ii) in the event of a liquidation, merger, stock exchange or similar transaction involving Tempus Holdings. Additionally, the Sellers will agree to a holdback of 180 days in connection with any public offering, and if requested by Tempus Holdings, the Sellers will agree to any holdback agreements that are required by the managing underwriters in any public offering.
As a condition to the Closing, Tempus and the Sellers must deliver to Chart the Non-Competition and Non-Solicitation Agreement in the form attached to the Merger Agreement duly (the “Non-Competition Agreement”) executed by John G. Gulbin III and TIH (together the “Subject Parties”) in favor of Tempus Holdings and Tempus (together with their successors and subsidiaries, the “Covered Parties”). Under the Non-Competition Agreement, for a period of 4 years from and after the Closing, the Subject Parties will not, without Tempus Holdings’ prior written consent, anywhere in the world directly or indirectly engage in (or own, manage, finance or control, or become engaged or serve as an officer, director, employee, member, partner, agent, consultant, advisor or representative of, an entity that engages in) the business of providing, directly or indirectly, to or through the United States government and its instrumentalities, foreign governments and their instrumentalities, heads of state, private businesses and others, turnkey and customized aircraft design, engineering, modification and integration services and operations solutions that support aircraft mission requirements, including without limitation any charter brokerage, crew, flight planning, fueling, regulatory, customs, maintenance and insurance services provided in connection therewith (the “Business”). The Subject Parties will also agree for a period of 4 years from and after the Closing to not, without Tempus Holdings’ prior written consent, (i) hire or solicit the Covered Parties’ employees, consultants and independent contractors or otherwise interfere with the Covered Parties’ relationships with such persons, (ii) solicit or divert the Covered Parties’ customers relating to the Business or otherwise interfere with the Covered Parties’ contractual relationships with such persons, or (iii) interfere with or disrupt any Covered Parties’ vendors, suppliers, distributors, agents or other service providers for a purpose competitive with a Covered Party as it relates to the Business. The Subject Parties will also agree in the Non-Competition Agreement generally not to disparage the Covered Parties and to keep confidential and not use any confidential information of the Covered Parties.
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In addition to the information contained in this Offer to Purchase, you should carefully review the complete text of the Merger Agreement attached as Exhibit 2.1 to the Form 8-K filed by the Company with the SEC on January 7, 2015. You should also review the registration statement on Form S-4, as amended, initially filed by Tempus Holdings on January 9, 2015, which includes a preliminary proxy statement with respect to the proposed business combination, and contains, among other things, important information about, and the various risks associated with, the proposed business combination with Tempus.
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THE OFFER
Section 1. Number of Warrants; Purchase Price; No Proration.
Number of Warrants
Upon the terms and subject to certain conditions of the Offer, we will purchase a maximum of 7,492,300 of the Warrants, or such lesser number of Warrants validly tendered and not properly withdrawn, in accordance with “The Offer – Section 4. Withdrawal Rights”, before the Expiration Date at a price of $0.30 per Warrant, in cash, without interest, for an aggregate Purchase Price of up to $2,247,690.
This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of the Warrants and will be furnished to each broker, dealer, commercial bank, trust company or other nominee holders of Warrants and similar persons whose names, or the names of whose nominees, appear on the Company’s Warrant holders list or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to beneficial owners of Warrants.
The Offer will expire at 12:00 midnight, New York City time, at the end of the day on March 11, 2015, or such later time and date to which we may extend the Offer. If we are required for any reason to extend the Expiration Date past the Extended Termination Date, we will terminate the Offer and holders of any outstanding Warrants at such time will receive a pro rata distribution of the amount in the Escrow Account in the amount of $0.30 per Warrant as promptly as reasonably possible but no more than five business days after the Expiration Date and such Warrants will expire worthless. Only Warrants validly tendered and not properly withdrawn will be purchased pursuant to the Offer. See “The Offer – Section 13. Extension of the Offer; Termination; Amendment.”
The Offer is not conditioned on any minimum number of Warrants being tendered and financing is not a condition to the Offer. The Offer is, however, subject to certain other conditions, including the approval of the Proposals, the effectiveness of the Extension Amendment and the Trust Amendment and the satisfaction of the “Rule 13e-3 transaction” condition. See “The Offer—Section 6. Conditions of the Offer.”
Purchase Price
The Purchase Price is $0.30 per Warrant, in cash, without interest. The Purchasers expressly reserve the right, in their sole discretion, to increase the Purchase Price, subject to applicable law. See “The Offer—Section 13. Extension of the Offer; Termination; Amendment.”
If the Purchasers increase the price that may be paid for Warrants from $0.30 per Warrant, then the Offer must remain open for at least ten business days following the date that notice of the increase is first published, sent or given. For the purposes of the Offer, a “business day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. See “The Offer—Section 13. Extension of the Offer; Termination; Amendment.”
No Proration
There will be no proration with respect to the Offer. However, the Business Combination Tender Offer will be subject to proration to the extent more than 3,746,150 Warrants (or such reduced number of Warrants as discussed above) are properly tendered and not properly withdrawn.
Section 2. Purposes of the Offer; Certain Effects of the Offer.
None of the Filing Persons, the Information Agent, or the Depositary is making any recommendation to you as to whether to tender or refrain from tendering your Warrants pursuant to the Offer. You must make your own decision as to whether to tender your Warrants pursuant to the Offer and, if so, how many Warrants to tender. In doing so, you should read carefully the information in this Offer to Purchase and in the related Letter of Transmittal, including the purposes and effects of the Offer. No later than ten business days from the date of this Offer to Purchase, the Company is required by law to publish, send or give to you a statement disclosing whether its board of directors either recommends acceptance or rejection of the Offer, expresses no opinion and remains neutral toward the Offer or is unable to take a position with respect to the Offer. You should carefully read the information set forth in that
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statement before you tender your Warrants in the Offer. You should discuss whether to tender your Warrants with your own broker or other financial advisor, if any.
Purposes of the Offer
In connection with the Company’s IPO, the Purchasers committed to purchase at $0.60 per Warrant up to 3,750,000 outstanding Warrants in a tender offer to commence after the announcement of a business combination and expire upon the consummation of such business combination. The Purchasers initially deposited an aggregate of $2,250,000 with Continental, as escrow agent, into the Escrow Account (representing $0.60 per warrant for up to 3,750,000 Warrants) to fund such tender offer.
The purpose of the initially contemplated tender offer was twofold: first, unlike other blank check companies, the tender offer would provide Warrant holders that may not wish to retain their Warrants following a business combination the possibility of receiving cash for their Warrants; and, second, in the event the Company liquidates upon a failure to consummate a business combination, the Warrant holders would receive a pro rata distribution of the amount in the Escrow Account in the amount of $0.30 for each Warrant they hold, which Warrants, absent such a distribution as with other blank check companies, would expire worthless. As a result, in the event stockholder approval of a business combination was sought, those Warrant holders that are also stockholders would receive up to $0.60 per warrant (subject to proration) in place of $0.30 per warrant (in the event of liquidation of the Escrow Account).
The Purchasers are giving holders of the Warrants an opportunity to tender their Warrants as originally contemplated at $0.30 per share. We do not believe the current Warrant holders are prejudiced by the Extension Amendment, the Trust Amendment or the Offer since all holders of Warrants are concurrently being offered the opportunity to tender their Warrants at $0.30 per warrant, which is the price such holders would have received promptly after the Current Termination Date since a business combination was not completed by that date.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated) we have agreed with the other parties to the Escrow Agreement to amend the Escrow Agreement to provide that the termination event thereunder will be revised to reflect the Extended Termination Date rather than the Current Termination Date. We have also agreed to make the Offer in connection therewith so that holders of Warrants will continue to have the opportunity to receive $0.30 per Warrant on the Current Termination Date.
Only Warrants properly tendered at the Purchase Price, and not properly withdrawn, will be purchased pursuant to the Offer. All Warrants tendered and not purchased pursuant to the Offer will be returned to the tendering Warrant holders at our expense promptly following the Expiration Date or the termination of the Offer. See “Section 3. Procedures for Tendering Warrants” below.
In August 2014, the Purchasers commenced the Initial Warrant Tender Offer to purchase up to 7,500,000 of Chart’s issued and outstanding warrants at a purchase price of $0.30 per warrant in connection with a special meeting of Chart’s stockholders to approve, among other matters, an amendment to Chart’s existing charter extending the date by which Chart must consummate its initial business combination from September 13, 2014 to March 13, 2015. A total of 7,700 warrants were validly tendered and not withdrawn in the Initial Warrant Tender Offer. In September 2014, the Purchasers accepted for purchase all such warrants for an aggregate purchase price of $2,310, and $2,247,690 remains in the Escrow Account. Accordingly, the Purchasers have collectively agreed to conduct the Offer to purchase up to 7,492,300 of the outstanding Warrants at a price of $0.30 per Warrant.
As of February 11, 2015, the Company had 7,500,000 issued and outstanding Warrants (excluding the Placement Warrants), each to purchase one share of Common Stock at an exercise price of $11.50 per share. The Offer provides Warrant holders with an opportunity to obtain liquidity for their Warrants.
Certain Effects of the Offer
We expect $2,247,690 will be required to purchase the Warrants in the Offer if the Offer is fully subscribed at the Purchase Price of $0.30 per Warrant. Warrant holders who choose not to tender will retain their Warrants and may tender their Warrants in the Business Combination Tender Offer the Purchasers intend to conduct in connection with the consummation of the business combination. Through the Offer, the Purchasers will effectively offer to
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purchase up to 100% of the Warrants sold as part of the Units in the IPO and not tendered in the Initial Warrant Tender Offer. All Warrants tendered in the Offer will remain outstanding. If the Offer is consummated, the Company’s public stockholders will suffer no dilutive effect as the overall number of outstanding Warrants will remain unchanged. However, the relative voting power of the Purchasers with respect to the Company’s public stockholders on a fully diluted basis will increase based on their greater shareholding on an “as exercised” basis.
If the Extension Approval is approved and the Extension Amendment and the Trust Amendment are effective by the Current Termination Date, and the Warrant Agreement is amended and the Offer is completed, the Purchasers will, subject to the limitations set forth in the Merger Agreement, conduct the Business Combination Tender Offer to purchase up to 3,746,150 (subject to reduction of one Warrant for every two Warrants that are tendered in the Offer) of the outstanding Warrants at a price of $0.60 per Warrant, in connection with, and subject to, the consummation of the Company’s proposed business combination with Tempus. If the Company consummates the proposed business combination with Tempus, you will have an opportunity to tender your Warrants (which may be proportionately reduced based on the number of Warrants tendered in the Offer) at a purchase price of $0.60 per Warrant in connection therewith. The Business Combination Tender Offer will be subject to proration to the extent more than 3,746,150 Warrants (or such reduced number of Warrants as discussed above) are properly tendered and not properly withdrawn. If the Warrant Agreement is not amended for any reason, including if the Offer is not completed, the Warrants would expire and the holders of Warrants would receive $0.30 per Warrant.
Other Plans
Except as otherwise disclosed in this Offer to Purchase, including in “The Offer – Section 11. Important Information Concerning the Company,” in the preliminary proxy statement filed with the SEC on February 6, 2015, in the definitive proxy statement, when available, in the registration statement on Form S-4, as amended, initially filed by Tempus Holdings on January 9, 2015, or in the Form 8-K filed with the SEC on January 7, 2015, we currently have no plans, proposals or negotiations underway that relate to or would result in:
• any extraordinary transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries;
• any purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries;
• any material change in the Company’s present dividend rate or policy, indebtedness or capitalization;
• any change in the Company’s present board of directors or management;
• any other material change in the Company’s corporate structure or business;
• any class of equity securities of the Company becoming eligible to be delisted from a national securities exchange or cease to be authorized to be quoted in an automated quotation system operated by a national securities association; or
• any class of equity securities becoming eligible for termination of registration under Section 12(g)(4) of the Exchange Act.
Notwithstanding the foregoing, we reserve the right to change our plans and intentions at any time, as we deem appropriate.
Section 3. Procedures for Tendering Warrants.
Valid Tender of Warrants
For a Warrant holder to make a valid tender of Warrants under the Offer, the Depositary must receive, at its address set forth on the back cover of this Offer to Purchase, and prior to the Expiration Date, Warrant certificates for the Warrants you wish to tender, or confirmation of receipt of the Warrants pursuant to the procedure for book-entry transfer described below, together with a validly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an Agent’s Message (as defined below) in the case of a book-entry transfer, and any other required documents.
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If a broker, dealer, commercial bank, trust company or other nominee holds your Warrants, you must contact such nominee to tender your Warrants. It is likely your nominee has an earlier deadline for you to act to instruct the nominee to tender Warrants on your behalf. We urge Warrant holders who hold Warrants through nominees to consult their nominees to determine whether transaction costs may apply if Warrant holders tender Warrants through their nominees.
Units
The Offer is available only for outstanding Warrants. The Company has outstanding Units, each consisting of one share of Common Stock and one outstanding Warrant. The Units were issued in the Company’s IPO in December 2012. You may tender Warrants that are included in Units, but to do so you must first separate such Warrants from the Units prior to tendering such Warrants.
If you hold Units registered in your own name, you must deliver the certificate for such Units to Continental, the Company’s transfer agent, with written instructions to separate such Units into shares of Common Stock and Warrants. This must be completed far enough in advance of the Expiration Date of the Offer to permit the mailing of the Warrant certificates back to you so that you may then tender into the Offer the certificates received upon the separation of the Units.
If a broker, dealer, commercial bank, trust company or other nominee holds your Units, you must instruct such nominee to separate your Warrants from the Units. Your nominee must send written instructions by facsimile to the Depositary. Such written instructions must include the number of Units to be split and the nominee holding such Units. Your nominee must also initiate electronically, using Depository Trust Company’s (“DTC”) deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant Units and a deposit of an equal number of Common Stock and Warrants. This must be completed far enough in advance of the Expiration Date of the Offer to permit your nominee to tender into the Offer the Warrants received upon the separation of the Units. While this is typically done electronically the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your Warrants to be separated in a timely manner before the Offer expires, you will likely not be able to validly tender such Warrants prior to the Expiration Date.
Signature Guarantees
No signature guarantee will be required on a Letter of Transmittal if:
(i) the registered holder of the Warrants (including any participant in DTC whose name appears on a security position listing as the owner of the Warrants) tendered has not completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on the Letter of Transmittal; or
(ii) Warrants are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or an “eligible guarantor institution”, as the term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing constituting an “eligible institution”). See Instruction 1 to the Letter of Transmittal.
Except as described above, all signatures on any Letter of Transmittal for Warrants tendered must be guaranteed by an eligible institution. If a Warrant certificate is registered in the name of a person other than the person executing a Letter of Transmittal, or if payment is to be made, or Warrants not purchased or tendered are to be issued and returned, to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate instruments of transfer, in either case signed exactly as the name of the registered holder or owner appears on the certificate, with the signatures on the certificate guaranteed by an eligible institution.
In all cases, payment for Warrants tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of Warrant certificates (or a timely confirmation of the book-entry transfer of the Warrants into the Depositary’s account at DTC, as described above), a properly completed and duly executed Letter of Transmittal including any required signature guarantees, or an Agent’s Message (as defined below) in the case of a book-entry transfer, and any other documents required by the Letter of Transmittal.
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Method of Delivery
The method of delivery of all documents, including Warrant certificates, the Letter of Transmittal and any other required documents, is at the sole election and risk of the tendering holder. Warrants will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by book-entry confirmation). If delivery is by mail, we recommend registered mail with return receipt requested, properly insured. In all cases, sufficient time should be allowed to ensure timely delivery.
Book-Entry Delivery
For purposes of the Offer, the Depositary will establish an account with respect to the Warrants at DTC within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in DTC’s system may make book-entry delivery of Warrants by causing DTC to transfer those Warrants into the Depositary’s account in accordance with DTC’s procedures for that transfer. Although delivery of Warrants may be effected through a book-entry transfer into the Depositary’s account at DTC, a properly completed and duly executed Letter of Transmittal with any required signature guarantees, or an Agent’s Message, and any other required documents must be transmitted to and received by the Depositary at its address set forth on the back cover of this Offer to Purchase before the Expiration Date.
The confirmation of a book-entry transfer of Warrants into the Depositary’s account at DTC is referred to herein as “book-entry confirmation”. Delivery of documents to DTC in accordance with DTC’s procedures will not constitute delivery to the Depositary.
The term “Agent’s Message” means a message transmitted by DTC to, and received by, the Depositary and forming a part of a book-entry confirmation, stating that DTC has received an express acknowledgement from the DTC participant tendering Warrants that such DTC participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce such agreement against the DTC participant.
Return of Unpurchased Warrants
If any tendered Warrants are not purchased, or if less than all Warrants evidenced by a Warrant holder’s certificates are tendered, certificates for unpurchased Warrants will be returned promptly after the expiration or termination of the Offer or, in the case of Warrants tendered by book-entry transfer at DTC, the Warrants will be credited to the appropriate account maintained by the tendering Warrant holder at DTC, in each case without expense to the Warrant holder.
Tendering Warrant Holders’ Representations and Warranties; Tender Constitutes an Agreement
It is a violation of Rule 14e-4 promulgated under the Exchange Act for a person acting alone or in concert with others, directly or indirectly, to tender Warrants for such person’s own account unless at the time of tender and at the Expiration Date such person has a “net long position”, within the meaning of Rule 14e-4 promulgated under the Exchange Act, in the Warrants or equivalent securities at least equal to the Warrants being tendered and will deliver or cause to be delivered such Warrants for the purpose of tendering to us within the period specified in the Offer. A tender of Warrants made pursuant to any method of delivery set forth herein will constitute the tendering Warrant holder’s acceptance of the terms and conditions of the Offer, as well as the tendering Warrant holder’s representation and Warranty to us that (i) such Warrant holder has a “net long position”, within the meaning of Rule 14e-4 promulgated under the Exchange Act, in the Warrants or equivalent securities being tendered, and (ii) such tender of Warrants complies with Rule 14e-4.
A tender of Warrants made pursuant to any method of delivery set forth herein will also constitute a representation and warranty to us that the tendering Warrant holder has full power and authority to tender, sell, assign and transfer the Warrants tendered, and that, when the same are accepted for purchase by us, we will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, claims, encumbrances and other obligations relating to the sale or transfer of the Warrants, and the same will not be subject to any adverse claim or right. Any such tendering Warrant holder will, on request by the Depositary or us, execute and deliver any additional documents deemed by the Depositary or us to be necessary or desirable to complete the sale, assignment and transfer of the Warrants tendered, all in accordance with the terms of the Offer.
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All authority conferred or agreed to be conferred by delivery of the Letter of Transmittal shall be binding on the successors, assigns, heirs, personal representatives, executors, administrators and other legal representatives of the tendering Warrant holder and shall not be affected by, and shall survive, the death or incapacity of such tendering Warrant holder.
A tender of Warrants made pursuant to any method of delivery set forth herein will also constitute an acknowledgement by the tendering Warrant holder that: (i) the Offer is discretionary and may be extended, modified, suspended or terminated by us as provided herein; (ii) such Warrant holder is voluntarily participating in the Offer; (iii) the future value of the Warrants is unknown and cannot be predicted with certainty; (iv) such Warrant holder has received this Offer to Purchase; (v) such Warrant holder is not relying on the Purchasers, the Company, the Information Agent or the Depositary for tax or financial advice with regard to how the Offer will impact the tendering Warrant holder’s specific situation; (vi) any foreign exchange obligations triggered by such Warrant holder’s tender of Warrants or receipt of proceeds are solely his, her or its responsibility; (vii) regardless of any action that we take with respect to any or all income/capital gains tax, social security or insurance tax, transfer tax or other tax-related items (“Tax Items”) related to the Offer and the disposition of Warrants, such Warrant holder acknowledges that the ultimate liability for all Tax Items is and remains his, her or its sole responsibility; and (viii) such Warrant holder has a “net long position,” within the meaning of Rule 14e-4 promulgated under the Exchange Act, in the Warrants or equivalent securities at least equal to the Warrants being tendered, and the tender of Warrants complies with Rule 14e-4. In that regard, a tender of Warrants shall authorize us to withhold all applicable Tax Items potentially payable by a tendering Warrant holder. Our acceptance for payment of Warrants tendered pursuant to the Offer will constitute a binding agreement between the tendering Warrant holder and us upon the terms and subject to certain conditions of the Offer.
Determination of Validity; Rejection of Warrants; Waiver of Defects; No Obligation to Give Notice of Defects
All questions as to the number of Warrants to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of Warrants will be determined by us, in our sole discretion, and our determination will be final and binding on all parties, except as finally determined in a subsequent judicial proceeding in a court of competent jurisdiction if our determinations are challenged by Warrant holders. We reserve the absolute right to reject any or all tenders we determine not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any conditions of the Offer with respect to all tendered Warrants or waive any defect or irregularity in any tender with respect to any particular Warrants or any particular Warrant holder whether or not we waive similar defects or irregularities in the case of other Warrant holders. No tender of Warrants will be deemed to have been validly made until all defects or irregularities have been cured or waived. We will not be liable for failure to waive any condition of the Offer, or any defect or irregularity in any tender of Warrants. None of the Purchasers, the Company, the Information Agent, the Depositary or any other person will be obligated to give notification of defects or irregularities in tenders or incur any liability for failure to give notification. Our interpretation of the terms of and conditions to the Offer, including the Letter of Transmittal and the instructions thereto, will be final and binding on all parties, subject to a Warrant holder’s right to challenge our determination in a court of competent jurisdiction. By tendering Warrants, you agree to accept all decisions we make concerning these matters and waive any rights you might otherwise have to challenge those decisions.
Section 4. Withdrawal Rights.
You may withdraw Warrants that you have previously tendered pursuant to the Offer at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchasers pursuant to the Offer, you may also withdraw your tendered Warrants at any time after April 11, 2015. Except as this “Section 4. Withdrawal Rights” otherwise provides, tenders of Warrants are irrevocable.
For a withdrawal to be effective, a written notice of withdrawal must (i) be received in a timely manner by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and (ii) specify the name of the person having tendered the Warrants to be withdrawn, the number of Warrants to be withdrawn and the name of the registered holder of the Warrants to be withdrawn, if different from the name of the person who tendered the Warrants. To be effective, a notice of withdrawal must be in written, telegraphic or telex form.
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If a Warrant holder has used more than one Letter of Transmittal or has otherwise tendered Warrants in more than one group of Warrants, the Warrant holder may withdraw Warrants using either separate notices of withdrawal or a combined notice of withdrawal, so long as the information specified above is included.
If Warrant certificates to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of those certificates, the Warrant holder must submit the serial numbers shown on those certificates to the Depositary and, unless an eligible institution has tendered those Warrants, an eligible institution must guarantee the signatures on the notice of withdrawal. If Warrants have been delivered in accordance with the procedures for book-entry transfer described in “The Offer – Section 3. Procedures for Tendering Warrants”, any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Warrants and must otherwise comply with DTC’s procedures.
Withdrawals of tenders of Warrants may not be rescinded, and any Warrants properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. Withdrawn Warrants may be retendered at any time prior to the Expiration Date by again following one of the procedures described in “The Offer – Section 3. Procedures for Tendering Warrants.”
All questions as to the form and validity, including the time of receipt, of notices of withdrawal, will be determined by us, in our sole discretion, and our determination will be final and binding on all parties, except as finally determined in a subsequent judicial proceeding in a court of competent jurisdiction if our determinations are challenged by Warrant holders. We reserve the absolute right to waive any defect or irregularity in the withdrawal of Warrants by any Warrant holder, whether we waive similar defects or irregularities in the case of other Warrant holders. None of the Purchasers, the Company, the Information Agent, the Depositary or any other person will be obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will any of them incur liability for failure to give any notice.
If we extend the Offer, are delayed in our purchase of Warrants or are unable to purchase Warrants under the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may, subject to applicable law, retain tendered Warrants on our behalf. Such Warrants may not be withdrawn except to the extent tendering Warrant holders are entitled to withdrawal rights as described in this “Section 4. Withdrawal Rights.” Our reservation of the right to delay payment for Warrants which we have accepted for payment is limited by Rule 14e‑1(c) promulgated under the Exchange Act, which requires that we must pay the consideration offered or return the Warrants tendered promptly after termination or withdrawal of a tender offer.
Section 5. Purchase of Warrants and Payment of Purchase Price.
Promptly following the Expiration Date, we (i) will determine which Warrant holders validly tendered Warrants and (ii) will accept for payment and pay for (and thereby purchase) up to 7,492,300 Warrants validly tendered and not properly withdrawn before the Expiration Date.
For purposes of the Offer, we will be deemed to have accepted for payment (and therefore purchased), subject to conditional tender provisions of the Offer, Warrants that are validly tendered and not properly withdrawn only when, as and if we give oral or written notice to the Depositary of our acceptance of the Warrants for payment pursuant to the Offer.
In all cases, payment for Warrants tendered and accepted for payment in the Offer will be made promptly, but only after timely receipt by the Depositary of certificates for Warrants, or a timely book-entry confirmation of Warrants into the Depositary’s account at the DTC, a properly completed and duly executed Letter of Transmittal, or an Agent’s Message in the case of a book-entry transfer, and any other required documents.
We will pay for Warrants purchased in the Offer by authorizing the release of the aggregate Purchase Price from the Escrow Account to the Depositary, which will act as agent for tendering Warrant holders for the purpose of receiving payment from us and transmitting payment to tendering Warrant holders.
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Certificates for all Warrants tendered and not purchased, including conditional tenders, will be returned or, in the case of Warrants tendered by book-entry transfer, will be credited to the account maintained with DTC by the broker/dealer participant who delivered the Warrants, to the tendering Warrant holder at our expense promptly after the Expiration Date or termination of the Offer, without expense to the tendering Warrant holders.
Under no circumstances will we pay interest on the Purchase Price, including, but not limited to, by reason of any delay in making payment. In addition, if certain events occur, we may not be obligated to purchase Warrants in the Offer.
We urge Warrant holders who hold Warrants through a broker, dealer, commercial bank, trust company or other nominee to consult their nominee to determine whether transaction costs are applicable if they tender Warrants through their nominee and not directly to the Depositary.
Section 6. Conditions of the Offer.
The Offer is conditioned upon the approval of the Proposals, the effectiveness of the Extension Amendment and the Trust Amendment and the satisfaction of the “Rule 13e-3 transaction” condition.
Notwithstanding any other provision of the Offer, we will not accept for payment, purchase or pay for any Warrants tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for Warrants tendered, subject to the rules under the Exchange Act, if:
• At any time on or after the commencement of the Offer and before the Expiration Date, there has been instituted or is pending any action, suit or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic, foreign or supranational, before any court, authority, agency or other tribunal that (i) directly or indirectly challenges or seeks to make illegal, or to delay or otherwise directly or indirectly to restrain, prohibit or otherwise affect the making of the Offer, the acquisition of some or all of the Warrants pursuant to the Offer or (ii) in our reasonable judgment and regardless of the circumstances giving rise to the event or events (other than any action or omission to act by us), makes it inadvisable to proceed with the Offer or with acceptance for payment;
• The Extension Amendment and the Trust Amendment are not effective prior to the Expiration Date; or
• We have determined, in our reasonable judgment, that the consummation of the Offer and the purchase of the tendered Warrants would result in a “Rule 13e-3 transaction” within the meaning of Rule 13e-3 under the Exchange Act.
The conditions referred to above are for our sole benefit with respect to the Offer and may be asserted by us regardless of the circumstances (other than any action or omission to act by us) giving rise to any condition, and may be waived by us, in whole or in part, in our discretion until the Offer shall have expired or been terminated. Our failure at any time to exercise the foregoing rights will not be deemed a waiver of any right. However, once the Offer has expired, then all of the conditions to the Offer must have been satisfied or waived. In certain circumstances, if we waive the conditions described above, we may be required to extend the Expiration Date. Any determination by us concerning the events described above will be final and binding on all parties. Notwithstanding the foregoing, we will not waive the “Rule 13e-3 transaction” condition.
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Section 7. Price Range of Common Stock, Warrants and Units; Dividends.
The Warrants are traded on Nasdaq under the symbol “CACGW”. On February 9, 2015, the closing price of the Warrants reported on Nasdaq was $0.55 per Warrant. The following table sets forth the high and low sales price of the Company’s Common Stock, Warrants and Units, as reported on Nasdaq for the periods shown:
Quarter Ended |
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Units |
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Common Stock |
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Warrants |
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High |
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Low |
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High |
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Low |
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High |
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Low |
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Year ended December 31, 2015 |
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March 31, 2015(1) |
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$ |
10.15 |
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$ |
9.95 |
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$ |
9.98 |
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$ |
9.60 |
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$ |
0.55 |
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$ |
0.55 |
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Year ended December 31, 2014 |
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|
|
|
March 31, 2014 |
|
$ |
10.95 |
|
|
$ |
10.32 |
|
|
$ |
10.41 |
|
|
$ |
9.75 |
|
|
$ |
0.75 |
|
|
$ |
0.50 |
|
June 30, 2014 |
|
$ |
10.72 |
|
|
$ |
10.38 |
|
|
$ |
10.30 |
|
|
$ |
9.83 |
|
|
$ |
0.69 |
|
|
$ |
0.65 |
|
September 30, 2014 |
|
$ |
10.65 |
|
|
$ |
10.25 |
|
|
$ |
10.30 |
|
|
$ |
9.26 |
|
|
$ |
0.65 |
|
|
$ |
0.40 |
|
December 31, 2014 |
|
$ |
10.55 |
|
|
$ |
10.00 |
|
|
$ |
10.17 |
|
|
$ |
9.64 |
|
|
$ |
1.33 |
|
|
$ |
0.55 |
|
Year ended December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2013 |
|
$ |
10.14 |
|
|
$ |
10.00 |
|
|
$ |
9.75 |
|
|
$ |
9.50 |
|
|
$ |
0.49 |
|
|
$ |
0.49 |
|
June 30, 2013 |
|
$ |
10.20 |
|
|
$ |
9.99 |
|
|
$ |
10.10 |
|
|
$ |
9.53 |
|
|
$ |
0.52 |
|
|
$ |
0.23 |
|
September 30, 2013 |
|
$ |
10.24 |
|
|
$ |
10.10 |
|
|
$ |
11.51 |
|
|
$ |
9.60 |
|
|
$ |
0.58 |
|
|
$ |
0.35 |
|
December 31, 2013 |
|
$ |
10.54 |
|
|
$ |
10.23 |
|
|
$ |
10.15 |
|
|
$ |
9.74 |
|
|
$ |
0.75 |
|
|
$ |
0.45 |
|
___________
(1) Represents the high and low sales prices for the Common Stock, Warrants and Units for the quarter through February 9, 2015.
As of February 9, 2015, the closing prices of the Common Stock and Units were $9.98 and $10.15, respectively.
You should evaluate current market quotes and trading volume for the Warrants, among other factors, before deciding whether or not to accept the Offer.
Dividends
The Company has no current plans to pay dividends. The Company does not currently have a paying agent.
Section 8. Source and Amount of Funds.
The Purchasers initially deposited an aggregate of $2,250,000 (of which $2,247,690 remains following the Initial Warrant Tender Offer) with Continental, as escrow agent, into the Escrow Account. The Escrow Agreement, as amended, will permit the use of the Escrow Account to fund the Offer. We expect to pay the aggregate Purchase Price by authorizing the release of up to the aggregate Purchase Price previously deposited in escrow to the Depositary promptly after the Expiration Date, pursuant to the Escrow Agreement, as amended.
Section 9. Interests of Directors and Executive Officers; Certain Agreements.
The Company’s directors and executive officers are as set forth in “The Offer – Section 11. Important Information Concerning the Company – Directors and Executive Officers.” Each of Joseph Wright, Christopher D. Brady and Michael LaBarbera holds an executive position with the Company and/or its affiliated entities.
The following table shows the number of Placement Warrants and Public Warrants beneficially owned by the Purchasers, each director and executive officer of the Company and by all such persons as a group (excluding Warrants issuable upon conversion of promissory notes held by the Purchasers.
29
The information set forth below is as of February 9, 2015:
Name(1) |
|
Number of Placement Warrants Owned |
|
|
Number of Pubic Warrants Owned |
|
|
Percentage of Total Warrants Outstanding(2) |
|
|
Cash to be received in Offer |
|
||||
Chart Acquisition Group LLC (Sponsor) |
|
|
231,250 |
|
|
|
4,751 |
|
|
|
3.0 |
% |
|
|
— |
|
The Chart Group L.P. |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Joseph Wright |
|
|
12,500 |
|
|
|
254 |
|
|
|
|
* |
|
|
— |
|
Christopher D. Brady |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Michael LaBarbera |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Governor Thomas Ridge |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Senator Joseph Robert Kerrey |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Peter A. Cohen |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Manuel D. Medina |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Kenneth J. Krieg |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cowen Investments LLC |
|
|
131,250 |
|
|
|
2,695 |
|
|
|
1.7 |
% |
|
|
— |
|
All directors and executive officers as a group (8 persons) |
|
|
375,000 |
|
|
|
7,700 |
|
|
|
4.9 |
% |
|
|
— |
|
___________
* Less than one percent.
(1) Unless otherwise noted, the business address of each of the persons and entities listed above is 555 5th Avenue, 19th Floor, New York, New York 10017.
(2) Based on 7,875,000 Warrants outstanding.
Participation in the Offer
The Purchasers have agreed not to tender their Placement Warrants or Public Warrants in the Offer. None of the Company’s sponsor, directors or executive officers will tender their Warrants pursuant to the Offer.
Recent Transactions in Warrants
Based on our records and the information provided to us by the Company’s sponsor, directors, executive officers, associates, subsidiaries, none of the Purchasers nor their respective officers or directors, or any director, officer, associate or majority-owned subsidiary of the foregoing, has effected any transactions in the Warrants in the past 60 days.
Transfers of Founder Shares, Placement Units, and Underlying Securities
The initial 2,156,250 shares of Common Stock (after giving effect to a 0.75-for-1 reverse stock split effectuated on July 10, 2012) sold by the Company to the Sponsor (the “Founder Shares”), of which 281,250 shares were forfeited in January 2013 and the Placement Units and their underlying securities, will not be transferable, assignable or salable (i) in the case of the Founder Shares, by the Company’s initial stockholders until the earlier of (A) one year after the consummation of the business combination or earlier if, subsequent to the business combination, the last sales price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the business combination, or (B) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction after the business combination that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the Placement Units and the component securities therein, until 30 days after the consummation of the business combination.
Registration Rights Agreement
The holders of the Founder Shares, Placement Units (including securities contained therein) and Warrants that may be issued upon conversion of working capital loans will have registration rights to require the Company to register a sale of any of the Company’s securities held by them pursuant to a registration rights agreement signed concurrently with the IPO. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act; provided that Cowen will, in no event, make more than one demand in any 365 day period. In addition, these holders will have
30
“piggy-back” registration rights to include their securities in other registration statements filed by the Company. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period.
Warrant Agreement
On December 13, 2012, the Company entered into a Warrant Agreement with Continental (as amended, the “Warrant Agreement”), pursuant to which Continental agreed to act as Warrant Agent in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants and the Placement Warrants). The Warrant Agreement provides that a Warrant may be exercised at a price of $11.50 per share (subject to anti‑dilution adjustments) during the period commencing on the later of: (i) the date that is thirty days after the first date on which the Company completes a business combination with one or more businesses, or (ii) the date that is twelve months from the date of the closing of the Offering, and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five years after the date on which the Company completes its business combination, provided that Warrants (excluding Public Warrants tendered pursuant to the Offer) held by Cowen or any of its “related persons” under FINRA rules, will expire on December 13, 2017, (y) the liquidation of the Company or, if the Company fails to consummate a business combination, the Current Termination Date, or (z) other than with respect to the Placement Warrants and the Public Warrants purchased pursuant to the Offer (so long as such Warrants are held by the Purchasers or their permitted transferees), the date on which the Company elects to redeem all of the Warrants pursuant to the terms of the Warrant Agreement as described below; provided, however, that the Company will not redeem the Warrants unless an effective registration statement covering the shares of common stock issuable upon exercise of the Warrants is current and available throughout the 30-day redemption period.
The Warrant Agreement provides for, among other things, the form and provisions of the Warrants and the manner in which the Warrants may be exercised. The Warrant Agreement also contains certain anti-dilution provisions and the manner in which the Warrants may be redeemed.
In August 2014, Chart amended the terms of its outstanding Warrants to extend the date for automatic termination of the Warrants if the Company has not consummated a business combination from September 13, 2014 to the Current Termination Date.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), Chart will amend the terms of its outstanding Warrants to extend the date for automatic termination of the Warrants if the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date. The Holders will continue to have five years from the consummation of the Company’s business combination to exercise such Warrants.
Promissory Notes
In February 2014, the Company issued convertible promissory notes in the aggregate amount of $400,000 for additional working capital (which notes will be convertible into warrants of the post business combination entity at a price of $0.75 per warrant at the option of the lender) as follows: $140,000 to Cowen, $246,667 to the Sponsor and $13,333 to Mr. Wright. On September 9, 2014, the Company issued promissory notes in the aggregate amount of $750,000 as follows: $246,667 non-convertible note to the Sponsor; $215,834 convertible note to the Sponsor; $140,000 non-convertible note to Cowen; $122,500 convertible note to Cowen; $13,333 non-convertible note to Joseph R. Wright, the Company’s Chairman and Chief Executive Officer, and $11,666 convertible note to Joseph R. Wright. Payment on all of the notes and convertible notes are due on the earlier of: (i) March 13, 2015 and (ii) the date on which the Company consummates its business combination. On February 4, 2015, the Company issued non-interest bearing promissory notes in the aggregate amount of $450,000 as follows: $277,500.37 to the Sponsor; $157,500 to Cowen and $14,999.63 to Mr. Wright. Payment on all of the notes are due on the earlier of: (i) March 13, 2015 and (ii) the date on which the Company consummates its business combination. If the Extension Amendment and the Trust Amendment are approved (and not abandoned), it is expected that the maturity dates of the notes will be extended to the earlier of: (i) June 13, 2015 and (ii) the date on which the Company consummates its business combination.
Section 10. Material U.S. Federal Income Tax Consequences
The following discussion is a general summary of certain material U.S. federal income tax consequences to the holders of Public Warrants (“Holders”) who tender and ultimately redeem some or all of their Public Warrants
31
pursuant to the Offer to Purchase (a “Tender Sale”). This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), laws, regulations, rulings and decisions in effect on the date hereof, all of which are subject to change, possibly with retroactive effect, and to varying interpretations, which could result in U.S. federal income tax consequences different from those described below. This discussion does not address the tax consequences to Holders under any state, local, or non-U.S. tax laws or any other U.S. federal tax, including the alternative minimum tax provisions of the Code.
This discussion applies only to Holders who are “United States persons,” as defined in the Code (a “U.S. Holder”), and applies only to Holders who would hold the Common Stock covered by their Warrants (if exercised) as a “capital asset,” as defined in the Code. For purposes of this discussion, the term “United States person” means (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that was created or organized in the U.S. or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. Holders have the authority to control all substantial decisions of the trust, or (b) such trust has in effect a valid election to be treated as a United States person.
If a partnership is a Holder, the tax treatment to a partner therein of a Tender Sale by the partnership will generally depend upon the tax status of the partner and the activities of the partnership. Partners should consult their own tax advisors regarding the specific tax consequences to them of their partnership selling Warrants pursuant to the Offer.
This discussion does not address all of the U.S. federal income tax consequences of a Tender Sale that may be relevant to particular Holders in light of their individual circumstances or to Holders subject to special treatment under the Code, including, without limitation, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, cooperatives, banks and certain other financial institutions, insurance companies, tax exempt organizations, retirement plans, Holders that are, or hold Warrants through, partnerships or other-pass through entities for U.S. federal income tax purposes, United States persons whose functional currency is not the U.S. dollar, dealers in securities or foreign currency, traders that mark to market their securities, certain former citizens and long-term residents of the United States, and Holders holding their Warrants as a part of a straddle, hedging, constructive sale or conversion transaction.
No legal opinion of any kind has been or will be sought or obtained regarding the U.S. federal income tax or any other tax consequences of Holders selling Warrants pursuant to the Offer. In addition, the following discussion is not binding on the U.S. Internal Revenue Service (“IRS”) or any other taxing authority, and no ruling has been or will be sought or obtained from the IRS or other taxing authority with respect to any of the U.S. federal income tax consequences or any other tax consequences that may arise in connection with a Tender Sale. There can be no assurance that the IRS or other taxing authority will not challenge any of the general statements made in this summary or that a U.S. court or other judicial body would not sustain such a challenge.
THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS TAX ADVICE. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES TO YOU OF SELLING OR NOT SELLING YOUR WARRANTS PURSUANT TO THE OFFER, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX RULES AND POSSIBLE CHANGES IN LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED IN THIS OFFER TO PURCHASE.
U.S. Federal Income Tax Treatment with Respect to Warrants Not Sold
No income, gain or loss for U.S. federal income tax purposes will be recognized by Holders with respect to Warrants that are not tendered and sold pursuant to the Offer, and Holders will not experience federal income tax consequences with respect to retained Warrants as a result of consummation of Tender Sales by other Holders.
U.S. Federal Income Tax Treatment of a Tender Sale of Warrants
A sale of Warrants for cash pursuant to the Purchaser Offer will be a taxable sale of the Warrants for U.S. federal income tax purposes. Upon a sale of Warrants, a U.S. Holder will recognize capital gain or loss in an
32
amount equal to the difference between the amount of cash received and the Holder’s adjusted tax basis in such Warrants. A Holder’s adjusted tax basis in the Warrants generally will equal the Holder’s acquisition cost for the Warrants. If the Holder purchased a Unit consisting of both Common Stock and Warrants, the cost of such Unit must be allocated between the Common Stock and the Warrants that comprised such Unit based on their relative fair market values at the time of the purchase. Any such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the Warrants exceeds one year. Calculation of gain or loss must be made separately for each block of Warrants owned by a Holder. (Generally, a “block” consists of Warrants acquired at the same cost in a single transaction.) Depending upon the Holder’s particular circumstances, a Holder may be able to designate which block(s) out of which Warrants will be considered to have been the sold in the Tender Sale if less that all of such Holder’s Warrants are sold.
Long-term capital gain recognized by a non-corporate U.S. Holder may be eligible for reduced rates of tax. The deduction of capital losses is subject to limitations, as is recognition of loss upon a taxable disposition by a U.S. Holder of Warrants if, within a period beginning 30 days before the date of such disposition and ending 30 days after such date, such Holder has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized), or has entered into a contract or option so to acquire, substantially identical stock or securities.
For taxable years beginning after December 31, 2012, U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally will be subject to a 3.8% Medicare contribution tax on “net investment income”, including, among other things, capital gains from the sale or other taxable disposition of securities, subject to certain limitations and exceptions. U.S. Holders should consult their own tax advisors regarding the effect, if any, of such tax on their disposition of the Warrants.
Information Reporting and Tax Withholding
In general, information reporting for U.S. federal income tax purposes should apply to the gross proceeds from sales and other dispositions of Warrants by a U.S. Holder. U.S. federal income tax laws require that, in order to avoid potential backup withholding in respect of certain “reportable payments”, each Holder (or other payee) must either (i) provide to the payor such Holder’s correct taxpayer identification number (“TIN”) (or certify under penalty of perjury that such Holder is awaiting a TIN) and certify that (A) such Holder has not been notified by the IRS that such Holder is subject to backup withholding as a result of a failure to report all interest and dividends or (B) the IRS has notified such Holder that such Holder is no longer subject to backup withholding, or (ii) provide an adequate basis for exemption. Each tendering U.S. Holder is required to make such certifications by including a signed copy of Form W-9 that is included as part of the Letter of Transmittal. Holders claiming exemption from information reporting and backup withholding will be required to certify their exemption from backup withholding on an applicable form. A non-U.S. Holder generally will eliminate the requirement for information reporting and backup withholding with respect to proceeds of by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable Form W-8 or by otherwise establishing an exemption. A Holder who sells Warrants in a Tender Sale but has not provided a correct TIN or an adequate basis for exemption may be subject to a $50 penalty imposed by the IRS, and any “reportable payments” made to such Holder pursuant to the Offer will be subject to backup withholding in an amount equal to 28% of such “reportable payments.” Amounts withheld, if any, are generally not an additional tax and may be refunded or credited against the Holder’s federal income tax liability, provided that the Holder timely furnishes the required information to the IRS.
Section 11. Important Information Concerning the Company
Except as specifically set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from or is based upon information furnished by the Company or its representatives or upon publicly available documents and records on file with the SEC and other public sources. The summary information set forth below is qualified in its entirety by reference to the Company’s public filings with the SEC (which may be obtained and inspected as described below) and should be considered in conjunction with the more comprehensive financial and other information in such reports and other publicly available information. We have no knowledge that would indicate that any statements contained herein based on such documents and records are untrue.
33
General
The Company was incorporated in Delaware on July 22, 2011. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or similar business combination, one or more operating businesses or assets. All activity through December 19, 2012 related to the Company’s formation and consummation of the IPO. Since December 19, 2012, the Company has been investigating prospective target businesses with which to consummate its business combination.
On December 19, 2012 the Company consummated its IPO of 7,500,000 Units, each Unit consisting of one share of Common Stock and a Warrant to purchase one share of Common Stock, pursuant to the Registration Statement, which was declared effective on December 13, 2012. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $75,000,000. The underwriters of the IPO were granted a 45-day option to purchase up to an additional 1,125,000 Units to cover over-allotments, if any. The underwriters did not exercise such option before the option period expired.
Simultaneously with the closing of the IPO, the Company closed the Private Placement pursuant to which it sold an aggregate of 375,000 Placement Units, each Placement Unit consisting of one share of Common Stock and one Warrant to purchase one share of Common Stock, to the Purchasers.
On December 14, 2012, the Units commenced trading on Nasdaq under the symbol “CACGU”. On February 4, 2013, the Units were separated and the Common Stock and Warrants began to trade on Nasdaq under the symbols “CACG” and “CACGW”, respectively.
Subsequent to the IPO, an amount of $75,000,000 of the net proceeds of the IPO and Private Placement was deposited in the Trust Account. The proceeds held in the Trust Account were invested only in United States government treasury bills with a maturity of 180 days or less or in money market funds that invest solely in United States government treasury bills with a maturity of 180 days or less and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended.
On September 5, 2014, we held a special meeting of stockholders at which stockholders approved an amendment to our amended and restated certificate of incorporation extending the date by which we must consummate our initial business combination from September 13, 2014 to March 13, 2015.
The Company’s executive office is located at 555 5th Avenue, 19th Floor, New York, NY 10017. It agreed to pay, commencing on December 14, 2012 and until such time as the Company consummates a business combination or its liquidation, a total of $10,000 per month to The Chart Group L.P., an affiliate of the Sponsor, for office space, secretarial and administrative services. The Company considers its current office space adequate for its current operations.
Directors and Executive Officers
The executive officers and directors of the Company are set forth in the following table:
Name |
|
Age |
|
|
Position |
|
Joseph R. Wright |
|
76 |
|
|
Chairman and Chief Executive Officer |
|
Christopher D. Brady |
|
60 |
|
|
President and Director |
|
Michael LaBarbera |
|
65 |
|
|
Chief Financial Officer and Secretary |
|
Peter A. Cohen |
|
68 |
|
|
Director |
|
Governor Thomas J. Ridge |
|
69 |
|
|
Director |
|
Senator Joseph Robert “Bob” Kerrey |
|
71 |
|
|
Director |
|
Manuel D. Medina |
|
62 |
|
|
Director |
|
Kenneth J. Krieg |
|
53 |
|
|
Director |
|
The address and telephone number of each director and executive officer is: 555 5th Avenue, 19th Floor, New York, NY 10017; telephone (212) 350-8205.
Joseph R. Wright has been Chairman of the Company’s Board of Directors and Chief Executive Officer since the Company’s inception. Mr. Wright is a Senior Advisor to The Chart Group, L.P., a merchant banking firm and
34
an affiliate of our sponsor and a member of the Advisory Board of The Comvest Group. Mr. Wright has served as the Executive Chairman of the Board of Directors of MTN Satellite Communications since 2010 and Chairman of the Investment Committee of ClearSky Power & Technology Fund I LLC since 2011. Mr. Wright was Senior Advisor to Providence Equity Partners LLC from July 2010 to June 2012 and Chief Executive Officer of Scientific Games Corp. from January 2009 to December 2010. From July 2006 through to April 2008, Mr. Wright served as Chairman and Director of Intelsat, Ltd., a provider of global satellite services and Chief Executive Officer and Director of PanAmSat Corporation from August 2001 until it was combined with Intelsat in July 2006. Mr. Wright was Chairman and Director of GRC International, Inc. from 1996 to 2000 and was Executive Vice President and Vice Chairman of W.R. Grace & Co. from August 1989 to 1994. Mr. Wright was a member of President Reagan’s Cabinet, was Director and Deputy Director of the White House Office of Management and Budget from March 1982 to 1989 and was Deputy Secretary of the Department of Commerce from 1981 to 1982. In 1989, Mr. Wright was appointed to the President’s Export Council by President George H.W. Bush as Chairman of the Export Control Sub-Committee. In 2003, President George W. Bush appointed Mr. Wright to the President’s Commission on the U.S. Postal Service Reform, the National Security Telecommunications Advisory Committee (NSTAC), the FCC’s Network Reliability and Interoperability Council and the FCC’s Media and Security Reliability Council. Mr. Wright presently serves on the current Administration’s Defense Business Board which provides advice on the overall management and governance on the Department of Defense. Mr. Wright received the Distinguished Citizens Award from President Reagan in 1989. Mr. Wright is currently a Director of Cowen Group, Inc., the parent of Cowen and Company, LLC. Mr. Wright has served as a member of several other boards of directors throughout his career, including Federal Signal Corporation from 2010 to 2012, Education Management Corporation from 2011 to 2012, Travelers from 1990 to 1999, Harcourt Brace Janovich from 1990 to 1992 and Titan from 2000 to 2005. Mr. Wright received his undergraduate degree from the Colorado School of Mines and his graduate degree from Yale University in 1961.
Peter A. Cohen, one of the Company’s directors, serves as chief executive officer and chairman of the board of Cowen Group, Inc., an affiliate of Cowen.
During the last five years, none of the Company’s directors or executive officers has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment or decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
Summary of the Warrants
Public Warrants
The following is a summary of the existing terms of the Warrants.
Each Warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, on the later of the date that is 30 days after the completion of the Company’s business combination and 12 months from the closing of the IPO. The Warrants (including Warrants tendered pursuant to the Offer) will expire five years after the completion of a business combination, at 5:00 p.m., New York time, or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Common Stock pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Common Stock underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations described below with respect to registration. No Warrant will be exercisable and the Company will not be obligated to issue Common Stock upon exercise of a Warrant unless shares of Common Stock issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt therefrom under the securities laws of the state of residence of the registered holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant will not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Warrant. In the event that a registration statement is not effective for the exercised Warrants, the purchaser of a Unit containing such Warrant will have paid the full purchase price for the Unit solely for the share of Common Stock underlying such Unit.
35
The Company has agreed that as soon as practicable, but in no event later than fifteen business days, after the closing of the Company’s business combination, the Company will 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 Securities Act, of the Common Stock issuable upon exercise of the Warrants, and the Company will use its best efforts to take such action as is necessary to register or qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants, to the extent an exemption therefrom is not available. The Company will use its best efforts to cause the post-effective amendment or new registration statement to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of the Warrant Agreement. In addition, the Company agreed to use its best efforts to register the Common Stock issuable upon exercise of a Warrant under the blue sky laws of the states of residence of the exercising Warrant holder to the extent an exemption is not available.
No Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the Common Stock issuable upon exercise of the Warrants and a current prospectus relating to such Common Stock. Notwithstanding the foregoing, if a registration statement covering the Common Stock issuable upon exercise of the Public Warrants has not been declared effective by the 60th business day following the closing of the Company’s business combination, Public 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 the Public Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933. If cashless exercise is permitted, each holder of the Public Warrants exercising on a cashless basis would pay the exercise price by surrendering the Public Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing: (x) the product of the number of shares of Common Stock underlying the Public Warrants, multiplied by the difference between the Public Warrant exercise price and the “fair market value” by (y) the fair market value. For these purposes, fair market value will mean the volume weighted average price of Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Public Warrants or the Company’s securities broker or intermediary.
Once the Warrants become exercisable, the Company may call the Warrants for redemption:
• in whole and not in part;
• at a price of $0.01 per Warrant;
• upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Warrant holder; and
• if, and only if, the reported last sale price of the Common Stock equals or exceeds $17.50 per share for any 20 trading days within a 30-trading day period ending three business days before the notice of redemption to the Warrant holders.
The Company will not redeem the Warrants unless an effective registration statement covering the Common Stock issuable upon exercise of the Warrants is current and available throughout the 30-day redemption period.
The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the Warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the Warrants, each Warrant holder will be entitled to exercise his, her or its Warrant prior to the scheduled redemption date. However, the price of the Common Stock may fall below the $17.50 redemption trigger price as well as the $11.50 Warrant exercise price after the redemption notice is issued.
A holder of a Warrant may notify the Company in writing in the event it elects to be subject to a requirement that such holder will 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% of the shares of the Common Stock outstanding immediately after giving effect to such exercise.
If the number of shares of Common Stock outstanding is increased by a stock dividend payable in Common Stock, or by a split-up of Common Stock or other similar event, then, on the effective date of such stock dividend,
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split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant will be increased in proportion to such increase in the outstanding shares of Common Stock. A rights offering to holders of Common Stock entitling holders to purchase Common Stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock 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 Common Stock) multiplied (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there will 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 Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if the Company, at any time while the Warrants are outstanding and unexpired, pays a dividend or makes a distribution in cash, securities or other assets to the holders of Common Stock on account of such Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of Common Stock in connection with a proposed business combination, or (d) in connection with the redemption of the Common Stock upon the Company’s failure to consummate a business combination, then the Warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Common Stock in respect of such event.
If the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant will be decreased in proportion to such decrease in outstanding shares of Common Stock.
Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as described above, the Warrant exercise price will be adjusted by multiplying the Warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Common Stock so purchasable immediately thereafter.
If, at any time after the Company’s business combination while the Warrants are outstanding, the Company effects (a) a merger with another company, in which the Company’s stockholders immediately prior to such transaction own less than a majority of the outstanding stock of the surviving entity, (b) any sale of all or substantially all of the Company’s assets in one or a series of related transactions, (c) a tender offer or exchange offer approved or authorized by the Company’s board is completed pursuant to which holders of at least a majority of the outstanding shares of Common Stock tender or exchange their shares for other securities, cash or property, or (d) a reclassification of its shares or any compulsory share exchange pursuant to which shares of the Common Stock are effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of the Company’s Common Stock), the holders of the Warrants will thereafter have the right to receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or other securities or property receivable upon such event, that the holder of the Warrants would have received if such holder had exercised their Warrants immediately prior to such event. Notwithstanding the foregoing, in the event of such a transaction, at the request of any holder, properly delivered, the Company (or its successor entity) shall purchase such Warrant from such holder by paying, within five trading days after such request, cash in an amount equal to the Black Scholes Value (as specifically defined in the Warrant Agreement) of the remaining unexercised portion of such Warrant on the date of such transaction. Any Warrant holder that receives cash pursuant to the immediately preceding sentence shall not receive the kind and amount of shares or other securities or property including cash, receivable upon such reclassification, reorganization, merger or consolidation.
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
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executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to the Company, for the number of Warrants being exercised.
The Warrant holders do not have the rights or privileges of holders of Common Stock and any voting rights until they exercise their Warrants and receive shares of Common Stock. After the issuance of shares of Common Stock upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
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, the Company will, upon exercise, round up to the nearest whole number the number of shares of Common Stock to be issued to the Warrant holder.
The Warrants were issued in registered form under the Warrant Agreement. You should review a copy of the Warrant Agreement, as amended, which was filed as an exhibit to the Form 8-K filed on September 12, 2014, for a complete description of the terms and conditions applicable to the Warrants.
If the Extension Amendment and the Trust Amendment are approved (and not abandoned), and the Offer is completed (and not terminated), the Company will amend the terms of the Warrants to extend the date for automatic termination of the Warrants if the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date. The Holders will continue to have five years from the consummation of the Company’s business combination to exercise such Warrants, subject to earlier liquidation or redemption events described above.
Placement Warrants and Tendered Warrants
The Sponsor has purchased 231,250 Placement Warrants, Joseph Wright has purchased 12,500 Placement Warrants and Cowen has purchased 131,250 Placement Warrants, which were included in the Placement Units purchased at a price of $10.00 per Unit for an aggregate purchase price of $3,750,000, in a private placement that occurred simultaneously with the IPO. In connection with the business combination, the Purchasers committed to commence the Business Combination Tender Offer, and by virtue thereof, acquire the tendered Public Warrants. The Placement Warrants and any tendered Public Warrants are identical to the Public Warrants sold in the IPO, except that, (i) if held by the Purchasers or their permitted assigns, they (a) may be exercised for cash or on a cashless basis; and (b) are not subject to being called for redemption, and (ii) the Placement Warrants which form a part of the Placement Units issued to Cowen, so long as they are held by Cowen or any of its related persons under FINRA rules, will expire on December 13, 2017, or earlier upon the Company’s liquidation, whereas any Placement Warrants or tendered Public Warrants held by holders other than Cowen or any such related person will expire five years from the consummation of the Company’s business combination, or earlier upon the Company’s liquidation. A portion of the proceeds from the sale of the Placement Warrants is held in the Trust Account for the benefit of the Company’s public stockholders.
The holders of the Placement Warrants have agreed that they will not exercise them if, at the time of exercise, an effective registration statement and a current prospectus relating to the shares of Common Stock issuable upon exercise of the Public Warrants is not available, unless, at that time, the Public Warrants are exercisable on a cashless basis. The Placement Warrants will become worthless if the Company does not consummate a business combination.
Section 12. Certain Legal Matters; Regulatory Approvals.
Except as otherwise discussed herein, based on our examination of publicly available information filed by the Company with the SEC and other information concerning the Company, we are not aware of any license or regulatory permit that is material to the Company’s business that might be adversely affected by our acquisition of the Warrants pursuant to the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic, foreign or supranational, that would be required for our acquisition or ownership of Warrants pursuant to the Offer. Should any approval or other action be required, we are unable to predict whether we will delay the acceptance for payment of or payment for Warrants tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any approval or other action, if needed, would be obtained without substantial cost or conditions or that the failure to obtain the approval or other action might not result in adverse consequences to the Company’s business and financial condition.
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Section 13. Extension of the Offer; Termination; Amendment.
Extension of the Offer
We expressly reserve the right, for any reason, at any time and from time to time prior to the Expiration Date, and regardless of whether any of the events set forth in “The Offer — Section 6. Conditions of the Offer” shall have occurred or are deemed by us to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Warrants. We will effect any such extension by giving notice of such extension to the Depositary and making a public announcement of the extension. If we are required for any reason to extend the Expiration Date past the Extended Termination Date, we will terminate the Offer and holders of any outstanding Warrants at such time will receive a pro rata distribution of the amount in the Escrow Account in the amount of $0.30 per Warrant as promptly as reasonably possible but no more than five business days after the Expiration Date and such Warrants will expire worthless.
Termination
We also expressly reserve the right, in our sole discretion, to terminate the Offer and reject for payment and not pay for any Warrants not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Warrants upon the occurrence of any of the conditions specified in “The Offer—Section 6. Conditions of the Offer” by giving oral or written notice of the termination or postponement to the Depositary and making a public announcement of the termination or postponement. Our reservation of the right to delay payment for Warrants which we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that we must pay the consideration offered or return the Warrants tendered promptly after termination or withdrawal of a tender offer.
Amendment
Subject to compliance with applicable law (including Rule 14d-1 under the Exchange Act), we further reserve the right, in our sole discretion, and regardless of whether any of the events set forth in “The Offer—Section 6. Conditions of the Offer” have occurred or are deemed by us to have occurred, to amend the Offer prior to the Expiration Date for any reason. Amendments to the Offer may be made at any time and from time to time by public announcement. In the case of an extension of the Offer, such amendment must be announced no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to Warrant holders in a manner reasonably designed to inform Warrant holders of the change. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law or regulation (including Rule 14d-1 under the Exchange Act), we shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release through PR Newswire, Business Wire or another comparable service.
If we materially change the terms of the Offer or the information concerning the Offer, we will extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 promulgated under the Exchange Act. These rules and certain related releases and interpretations of the SEC provide that the minimum period during which a tender offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of the terms or information; however, in no event will the Offer remain open for fewer than five business days following such a material change in the terms of, or information concerning, the Offer. If (i) we make any change to increase or decrease the price to be paid for Warrants, and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of an increase or decrease is first published, sent or given to Warrant holders in the manner specified in this “Section 13. Extension of the Offer; Termination; Amendment”, the Offer will be extended until the expiration of such period for ten business days. For purposes of the Offer, a “business day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.
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Section 14. Fees and Expenses.
The Purchasers have retained Morrow & Co., LLC to act as Information Agent and Continental to act as Depositary in connection with the Offer. The Information Agent may contact holders of Warrants by mail, facsimile and personal interviews and may request brokers, dealers and other nominee Warrant holders to forward materials relating to the Offer to beneficial owners. The Information Agent and Depositary will receive reasonable and customary compensation for their respective services, will be reimbursed by us for reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws.
The Purchasers will not pay any fees or commissions to brokers, dealers or other persons (other than fees to the Information Agent as described above) for soliciting tenders of Warrants pursuant to the Offer. Warrant holders holding Warrants through brokers, dealers and other nominee stockholders are urged to consult the brokers, dealers and other nominee stockholders to determine whether transaction costs may apply if Warrant holders tender Warrants through the brokers, dealers and other nominee Warrant holders and not directly to the Depositary. The Purchasers will, however, upon request, reimburse brokers, dealers and commercial banks for customary mailing and handling expenses incurred by them in forwarding the Offer and related materials to the beneficial owners of Warrants held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as our agent or the agent of the Information Agent or the Depositary for purposes of the Offer.
Section 15. Miscellaneous.
The Purchasers are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If the Purchasers become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Warrants, the Purchasers will make a good faith effort to comply with that statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, the Purchasers cannot comply with any such statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of Warrants in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchasers by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by the Purchasers.
No person has been authorized to give any information or to make any representation on behalf of the Purchasers not contained herein or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized. No broker, dealer, bank, trust company, fiduciary or other person shall be deemed to be the agent of the Purchasers, the Company, the Depositary, or the Information Agent for the purpose of the Offer.
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WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the information requirements of the Exchange Act, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Additional information regarding the Proposals can be found in the preliminary proxy statement filed by the Company with the SEC on February 6, 2015, and the definitive proxy statement, when available. Additional information regarding the Merger Agreement and related agreements can be found in the Form 8-K filed by the Company with the SEC on January 7, 2015. You should also carefully review the complete text of the Merger Agreement attached as Exhibit 2.1 to the Form 8-K filed by the Company with the SEC on January 7, 2015. In addition, you should carefully review the registration statement on Form S-4, as amended, initially filed by Tempus Holdings on January 9, 2015 for more information about the proposed business combination.
The SEC also maintains a website at http://www.sec.gov that contains reports and other information that we file with or furnish electronically with the SEC. You may also request a copy of any of the documents that have been referred to and related exhibits, at no cost, by writing or calling the Information Agent for the Offer at the telephone numbers set forth on the back cover of this Offer to Purchase. You may also read and copy, at the SEC’s prescribed rates, any document filed with the SEC, at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room.
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IF YOU WOULD LIKE ADDITIONAL COPIES OF THIS OFFER TO PURCHASE OR IF YOU HAVE QUESTIONS ABOUT THE OFFER, YOU SHOULD CONTACT THE COMPANY BY TELEPHONE OR IN WRITING AT THE FOLLOWING ADDRESS:
Chart Acquisition Corp.
555 5th Avenue,
19th Floor
New York, NY 10017
Telephone: (212) 350-8205
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Attn:
Reorganization Dept.
17 Battery
Place, 8th Floor
New York, NY
10004
Questions and requests for assistance regarding the Offer may be directed to Morrow & Co., LLC, our Information Agent for the Offer at the telephone numbers set forth below. You may also request additional copies of this Offer to Purchase, the Letter of Transmittal, and the other Offer documents from the Information Agent at the telephone numbers set forth below. You may also contact your broker, dealer, commercial bank, trust company or nominee for copies of these documents.
The Information Agent for the Offer is:
470 West Avenue
Stamford, CT 06902
Banks and Brokerage Firms, Please Call: (203) 658-9400
Holders Call Toll Free: (800) 662-5200
chart.info@morrowco.com
Offer to Purchase
February 11, 2015
EXHIBIT (a)(1)(B)
LETTER OF TRANSMITTAL
CHART
ACQUISITION GROUP LLC
JOSEPH R. WRIGHT
AND
COWEN INVESTMENTS
LLC
Offer to Purchase for Cash
Up to 7,492,300 Warrants
of
CHART ACQUISITION CORP.
at a Purchase Price of $0.30 Per Warrant
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, AT THE END OF THE DAY ON MARCH 11, 2015 OR SUCH LATER TIME AND DATE TO WHICH THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CONTINENTAL STOCK
TRANSFER & TRUST COMPANY
By First Class Mail: |
By Overnight or Hand Delivery: |
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17 Battery Place, 8th Floor |
17 Battery Place, 8th Floor |
New York, NY 10004 |
New York, NY 10004 |
Attn: Reorganization Dept. |
Attn: Reorganization Dept. |
For this Letter of Transmittal to be validly delivered, it must be received by the Depositary at one of the addresses above before our Offer expires (in addition to the other requirements detailed herein). The instructions set forth in this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed. Delivery of this Letter of Transmittal to an address other than as set forth above will not be forwarded to the Depositary and will not constitute a valid delivery to the Depositary.
DESCRIPTION OF WARRANTS TENDERED
(Attach Additional
Signed List(s) if Necessary) (See Instruction 3)
Name(s) and Address(es) of Registered Holder(s) (Please fill in exactly as name(s) appear(s) on Warrant Certificate(s)) |
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Warrant Certificate Number(s)* |
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Total Number of Warrants Evidenced by Warrant Certificate(s) |
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Number of Warrants Tendered** |
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* Do not need to complete if Warrants are delivered by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Warrants evidenced by each certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
You should use this Letter of Transmittal if you are tendering physical certificates, or are causing the Warrants to be delivered by book-entry transfer to the Depositary’s account at The Depositary Trust Company (“DTC”) pursuant to the procedures set forth in “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase.
All capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Offer to Purchase.
Certificates for Warrants, together with a properly completed Letter of Transmittal and any other documents required by this Letter of Transmittal, must be delivered to the Depositary and not to us or to Chart Acquisition Corp. (the “Company”). ANY DOCUMENTS DELIVERED TO US, THE COMPANY, THE INFORMATION AGENT OR DTC WILL NOT BE FORWARDED TO THE DEPOSITARY OR CONSIDERED DELIVERED TO THE DEPOSITARY AND WILL NOT BE DEEMED TO BE VALIDLY DELIVERED.
The Offer is only available for outstanding Warrants. The Company also has outstanding shares of Common Stock and units, each unit comprising a share of Common Stock and a Warrant to acquire a share of Common Stock. You may tender Warrants that are included in units, but to do so you must first separate such Warrants from the units and then tender such Warrants. See “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase.
This Letter of Transmittal is to be completed only if (i) certificates representing Warrants are to be forwarded herewith, or (ii) an Agent’s Message is utilized, and a tender of Warrants is to be made concurrently by book-entry transfer to the account maintained by DTC pursuant to “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase (See Instruction 2).
The name(s) and address(es) of the registered holder(s) should be printed, if they are not already printed above, exactly as they appear on the certificates representing Warrants tendered. The certificate numbers, the number of Warrants represented by the certificates and the number of Warrants that the undersigned wishes to tender should be set forth in the appropriate boxes above.
Additional Information if Warrants Are Being Delivered By Book-Entry Transfer
BOOK-ENTRY TRANSFER
(See Instruction
2)
¨ CHECK HERE IF TENDERED WARRANTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: __________________________________
DTC Account No.: ___________________________________________
Transaction Code No.: ________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, we may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Warrants tendered. In any event, the undersigned understands that certificate(s) for any Warrants not tendered or not purchased will be returned to the undersigned at the address indicated above, unless otherwise indicated under the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” below. The undersigned understands that acceptance of Warrants by the Purchasers for payment will constitute a binding agreement between the undersigned and the Purchasers upon the terms and subject to the conditions of the Offer.
The check for the aggregate net Purchase Price for the Warrants tendered and purchased will be issued to the order of the undersigned and mailed to the address indicated in the box entitled “Description of Warrants Tendered” above, unless otherwise indicated in the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” below. The undersigned acknowledges that the Company has no obligation, pursuant to the
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“Special Payment Instructions,” to transfer any Warrants from the name of its registered holder(s), or to order the registration or transfer of any Warrants tendered by book-entry transfer, if the Purchasers do not purchase any of the Warrants.
Ladies and Gentlemen:
The undersigned hereby tenders to Chart Acquisition Group LLC, Joseph R. Wright and Cowen Investments LLC (the “Purchasers,” “we”, “us” or “our”) upon the terms and subject to the conditions described in the Offer to Purchase dated February 11, 2015 (the “Offer to Purchase”), and in this Letter of Transmittal (which together, as each may be supplemented or amended from time to time, constitute the “Offer”), receipt of which is hereby acknowledged, the number indicated herein of Warrants, each to purchase one share of common stock of Chart Acquisition Corp. (the “Company”) for a price per Warrant of $0.30 (the “Purchase Price”).
Subject to, and effective upon, acceptance for payment of the Warrants tendered in accordance with the terms and subject to the conditions of the Offer, including, if the Offer is extended or amended, the terms and conditions of the extension or amendment, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchasers all right, title and interest in and to all Warrants tendered and orders the registration of all Warrants if tendered by book-entry transfer and irrevocably constitutes and appoints the Depositary as the true and lawful agent and attorney-in-fact of the undersigned with respect to the Warrants with full knowledge that the Depositary also acts as the agent of the Purchasers, with full power of substitution (the power of attorney being deemed to be an irrevocable power coupled with an interest), to:
• deliver certificate(s) representing the Warrants or transfer of ownership of the Warrants on the account books maintained by DTC, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchasers upon receipt by the Depositary, as the undersigned’s agent, of the Purchase Price with respect to the Warrants;
• present certificates for the Warrants for cancellation and transfer on the books of the Company; and
• receive all benefits and otherwise exercise all rights of beneficial ownership of the Warrants, subject to the next paragraph, all in accordance with the terms and subject to the conditions of the Offer.
All Warrants validly tendered and not properly withdrawn will be purchased, subject to the conditions of the Offer described in the Offer to Purchase. The undersigned understands that all Warrant holders whose Warrants are purchased by the Purchasers will receive the same Purchase Price for each Warrant purchased in the Offer.
The undersigned covenants, represents and warrants to the Purchasers that the undersigned:
• has full power and authority to tender, sell, assign and transfer the Warrants tendered hereby and when and to the extent accepted for payment, the Purchasers will acquire good, marketable and unencumbered title to the tendered Warrants, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer of the Warrants, and not subject to any adverse claims;
• understands that tenders of Warrants pursuant to any one of the procedures described in “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer;
• releases and discharges the Purchasers and the Company from any and all claims that the undersigned may have now or in the future arising out of or related to the Warrants tendered hereby, other than payment of the Purchase Price; and
• will, upon request, execute and deliver any additional documents deemed by the Depositary, the Company or the Purchasers to be necessary or desirable to complete the sale, assignment and transfer free and clear of all liens of the Warrants tendered hereby.
A tender of Warrants made by means of this Letter of Transmittal will also constitute an acknowledgement by the undersigned tendering Warrant holder that:
• the Offer is discretionary and may be extended, modified, suspended or terminated by us as provided herein;
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• such Warrant holder is voluntarily participating in the Offer;
• the future value of our Warrants is unknown and cannot be predicted with certainty;
• such Warrant holder has received the Offer to Purchase;
• such Warrant holder is not relying on the Purchasers, the Company, the Information Agent or the Depositary for tax or financial advice with regard to how the Offer will impact the tendering Warrant holder’s specific situation;
• any foreign exchange obligations triggered by such Warrant holder’s tender of Warrants or receipt of proceeds are solely his, her or its responsibility;
• the undersigned has a “net long position,” within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in the Warrants or equivalent securities at least equal to the Warrants being tendered;
• the tender of Warrants complies with Rule 14e-4; and
• regardless of any action that Purchaser takes with respect to any or all income/capital gains tax, social security or insurance tax, transfer tax or other tax-related items (“Tax Items”) related to the Offer and the disposition of Warrants, such Warrant holder acknowledges that the ultimate liability for all Tax Items is and remains his, her or its sole responsibility.
The undersigned understands that tenders of Warrants pursuant to any one of the procedures described in “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchasers upon the terms and subject to the conditions of the Offer. The undersigned acknowledges that under no circumstances will the Purchasers pay interest on the Purchase Price, including without limitation by reason of any delay in making payment.
The undersigned recognizes that the Purchasers have no obligation, pursuant to the “Special Payment Instructions”, to transfer any Warrants from the name of the registered holder(s) thereof, if the Purchasers do not accept for payment any of the Warrants so tendered.
Unless otherwise indicated under “Special Payment Instructions”, please issue the check for the Purchase Price of any Warrants purchased (less the amount of any federal income or backup withholding tax required to be withheld), and return any Warrants not tendered or not purchased, in the name(s) of the undersigned or, in the case of Warrants tendered by book-entry transfer, by credit to the account at DTC. Similarly, unless otherwise indicated under “Special Delivery Instructions”, please mail the check for the Purchase Price of any Warrants purchased (less the amount of any federal income or backup withholding tax required to be withheld) and any certificates for Warrants not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned’s signature(s). In the event that both “Special Payment Instructions” and “Special Delivery Instructions” are completed, please issue the check for the Purchase Price of any Warrants purchased (less the amount of any federal income or backup withholding tax required to be withheld) and return any Warrants not tendered or not purchased in the name(s) of, and mail said check and any certificates to, the person(s) so indicated.
All authority conferred or agreed to be conferred will survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder will be binding on the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and legal representatives of the undersigned. Except as stated in the Offer to Purchase, the tender of the undersigned’s Warrants pursuant to this Letter of Transmittal is irrevocable.
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SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4,
and 6)
To be completed ONLY if certificate(s) for Warrants not tendered or not purchased and/or any check for the Purchase Price are to be issued in the name of someone other than the undersigned.
Issue:
¨ Check
¨ Warrant Certificate(s) to:
Name: ____________________________________
Address: __________________________________
Zip Code: _________________________________
Tax Identification or Social Security Number:
(Complete Substitute Form W-9 or Form W-8,
as applicable)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4,
and 6)
To be completed ONLY if certificate(s) for Warrants not tendered or not purchased and/or any check for the Purchase Price are to be mailed or sent to someone other than the undersigned, or to the undersigned at an address other than that designated in the box entitled “Description of Warrants Tendered” above.
Mail:
¨ Check
¨ Warrant Certificate(s) to:
Name: ____________________________________
Address: __________________________________
Zip Code: _________________________________
Tax Identification or Social Security Number:
(Complete Substitute Form W-9 or Form W-8,
as applicable)
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IMPORTANT
WARRANT HOLDERS SIGN HERE
(Please Complete and Return the Attached Substitute Form W-9 or an appropriate Form W-8, as applicable.)
(Must be signed by the registered holder(s) exactly as such holder(s) name(s) appear(s) on certificate(s) for Warrants or on a security position listing or by person(s) authorized to become the registered holder(s) thereof by certificates and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.)
Signature(s) of Owner(s): _________________________________
Dated:__________________ |
Name(s): ___________________________________ |
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(Please Print) |
Capacity (full title): _______________________________________
Address: ________________________________________________
(Include Zip Code)
Daytime Area Code and Telephone Number: ____________________
Taxpayer Identification or Social Security Number: ______________
(See Substitute Form W-9 or Form W-8, as applicable)
GUARANTEE OF SIGNATURE(S)
(If Required — See
Instructions 1 and 5)
Authorized Signature: _____________________________________.
(Please Print)
Name: __________________________________________________
Title: ___________________________________________________
Name of Firm: ___________________________________________
Address: ________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ___________________________
Dated: __________________________________________________
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INSTRUCTIONS
FORMING PART OF THE
TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required if:
• this Letter of Transmittal is signed by the registered holder of the Warrants whose name appears on a security position listing as the owner of the Warrants tendered and the holder has not completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on this Letter of Transmittal; or
• Warrants are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or an “eligible guarantor institution,” as the term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing constituting an “eligible institution”).
In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an eligible institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of Transmittal is to be completed only if certificates for Warrants are delivered with it to the Depositary or if a tender for Warrants is being made concurrently pursuant to the procedure for tender by book-entry transfer set forth in “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase. Certificates for all physically tendered Warrants or confirmation of a book-entry transfer into the Depositary’s account at DTC of Warrants tendered electronically, together in each case with a properly completed and duly executed Letter of Transmittal, or an Agent’s Message in the case of a book-entry transfer, and any required signature guarantees and other documents required by the Letter of Transmittal, should be mailed or delivered to the Depositary at the appropriate address set forth in this document and must be received by the Depositary on or before the Expiration Date. Delivery of this Letter of Transmittal and any other required documents to DTC or any other person or address does not constitute delivery to the Depositary.
The method of delivery of all documents, including certificates for Warrants, this Letter of Transmittal and any other required documents, is at the election and risk of the tendering Warrant holder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.
We will not accept any alternative, conditional or contingent tenders, nor will they purchase any fractional Warrants, except as expressly provided in the Offer to Purchase. All tendering Warrant holders, by execution of this Letter of Transmittal (or a facsimile of this Letter of Transmittal), waive any right to receive any notice of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box entitled “Description of Warrants Tendered” above is inadequate, the certificate numbers and/or the number of Warrants should be listed on one or more separate signed schedules and attached to this Letter of Transmittal.
4. Partial Tenders and Unpurchased Warrants. (Not applicable to Warrant holders who tender by book-entry transfer.) If fewer than all of the Warrants evidenced by any certificate are to be tendered, fill in the number of Warrants that are to be tendered in the column entitled “Number of Warrants Tendered” in the box entitled “Description of Warrants Tendered” above. In that case, if any tendered Warrants are purchased, a new certificate for the remainder of the Warrants (including any Warrants not purchased) evidenced by the old certificate(s) will be issued and sent to the registered holder(s), unless otherwise specified in either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” in this Letter of Transmittal, as soon as practicable after the Expiration Date. Unless otherwise indicated, all Warrants represented by the certificate(s) set forth above and delivered to the Depositary will be deemed to have been tendered.
5. Signatures on Letter of Transmittal; Instruments of Transfer and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the Warrants tendered, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever.
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If any of the Warrants tendered hereby are registered in the names of two or more persons, all such persons must sign this Letter of Transmittal.
If any of the Warrants tendered hereby are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the Warrants tendered hereby, no endorsement(s) of certificate(s) representing the Warrants or separate instrument(s) of transfer are required unless payment is to be made or the certificate(s) for Warrants not tendered or not purchased are to be issued to a person other than the registered holder(s). Signature(s) on the certificate(s) must be guaranteed by an eligible institution.
If this Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed, or if payment is to be made or certificate(s) for Warrants not tendered or not purchased are to be issued to a person other than the registered holder(s), the certificate(s) must be endorsed or accompanied by appropriate instrument(s) of transfer, in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s), and the signature(s) on the certificate(s) or instrument(s) of transfer must be guaranteed by an eligible institution. See Instruction 1.
If this Letter of Transmittal or any certificate(s) or instrument(s) of transfer is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or any other person acting in a fiduciary or representative capacity, that person should so indicate when signing this Letter of Transmittal and must submit proper evidence satisfactory to the Depositary which is satisfactory to us of his or her authority to so act.
6. Special Payment and Delivery Instructions. If certificate(s) for Warrants not tendered or not purchased and/or check(s) are to be issued in the name of a person other than the signer of this Letter of Transmittal or if the certificates and/or checks are to be sent to someone other than the person signing this Letter of Transmittal or to the signer at a different address, the box entitled “Special Payment Instructions” and/or the box entitled “Special Delivery Instructions” on this Letter of Transmittal should be completed as applicable and signatures must be guaranteed as described in Instruction 1.
7. Irregularities. All questions as to the number of Warrants to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Warrants will be determined by the Purchasers, in their sole discretion, and their determination will be final and binding on all parties, except as finally determined in a subsequent judicial proceeding in a court of competent jurisdiction if the Purchasers’ determinations are challenged by Warrant holders. We reserve the absolute right to reject any or all tenders of any Warrants that they determine are not in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any conditions of the Offer with respect to all tendered Warrants or waive any defect or irregularity in any tender with respect to any particular Warrants or any particular Warrant holder whether or not we waive similar defects or irregularities in the case of other Warrant holders. No tender of Warrants will be deemed to have been properly made until all defects or irregularities have been cured by the tendering Warrant holder or waived by the Purchasers. the Purchasers will not be liable for failure to waive any condition of the Offer, or any defect or irregularity in any tender of Warrants. None of the Purchasers, the Company, the Depositary, the Information Agent, or any other person will be obligated to give notification of any defects or irregularities in tenders, nor will any of them incur any liability for failure to give any notice.
8. Questions and Requests for Assistance and Additional Copies. Questions or requests for assistance may be directed to the Information Agent at its telephone number and address set forth at the end of this Letter of Transmittal. Warrant holders may request additional copies of the Offer to Purchase and this Letter of Transmittal from the Information Agent at its telephone number and address set forth at the end of this Letter of Transmittal.
9. Important Tax Information and Substitute Form W-9. Under the U.S. federal income tax backup withholding rules, unless an exemption applies under the applicable law and regulations, 28% of the gross proceeds payable to a Warrant holder or other payee pursuant to the Offer must be withheld and remitted to the Internal Revenue Service (the “IRS”), unless the Warrant holder or other payee provides its taxpayer
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identification number (employer identification number or social security number) to the Depositary (as payor) and certifies under penalties of perjury that the number is correct and that the Warrant holder is exempt from backup withholding or otherwise establishes an exemption. Therefore, each tendering Warrant holder that is a U.S. Holder (as defined in “The Offer – Section 10. Material U.S. Federal Income Tax Consequences” of the Offer to Purchase) should complete and sign the Substitute Form W-9 included as part of this Letter of Transmittal in order to provide the information and certification necessary to avoid backup withholding. If a U.S. holder provides the Depositary with an incorrect taxpayer identification number, the U.S. holder may be subject to penalties imposed by the IRS. If backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS in accordance with its refund procedures. Certain “exempt recipients” (including, among others, all corporations and certain Non-U.S. Holders, as defined in “The Offer – Section 10. Material U.S. Federal Income Tax Consequences” of the Offer to Purchase) are not subject to backup withholding. In order for a non-U.S. holder to qualify as an exempt recipient, that Warrant holder must submit to the Depositary an appropriate IRS Form W-8 (or successor form), signed under penalties of perjury, attesting to that Warrant holder’s exempt status. This form can be obtained from the Depositary. Backup withholding is not an additional tax and may be credited against U.S. federal income tax payable by a U.S. holder or, if such backup withholding exceeds such amount of tax payable, claimed as a refund.
10. Units. The Offer is only available to outstanding Warrants. The Company also has outstanding shares of Common Stock and units, each unit comprising a share of Common Stock and a Warrant to acquire a share of Common Stock. The Offer is open to Warrants included within units, but any such Warrants must first be separated from the units prior to being tendered. See “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase.
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ALL
TENDERING U.S. HOLDERS MUST COMPLETE THE
FOLLOWING:
PAYER: CONTINENTAL STOCK
TRANSFER & TRUST COMPANY
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PLEASE PROVIDE YOUR TIN IN THE |
Part I — Social Security Number |
SUBSTITUTE |
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(If awaiting TIN, write “Applied For”) |
Form W-9 Department of the Treasury Internal Revenue Service Payer’s Request for Taxpayer Identification Number (TIN) |
Name: Business Name: Please check appropriate box ¨ Individual/Sole Proprietor ¨ Corporation ¨ Partnership ¨ Limited Liability Company. Enter the tax classification: ___ (P=Partnership, C=Corporation, D=Disregarded Entity) ¨ Other Address (Number, street and apt. or suite no.) City, State, Zip Code |
Part II — For Payees exempt from backup withholding, see the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9, check the Exempt box below, and complete the Substitute Form W-9. Exempt o |
Part III — Certifications — Under penalties of perjury, I certify that: |
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The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and |
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I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (4) |
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I am a U.S. person (including a U.S. resident alien). |
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Certification Instructions — You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item (2) does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (Also see instructions in the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.) |
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The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. |
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SIGNATURE:___________________________________________ DATE:____________________________ |
NOTE: IF YOU ARE A U.S. HOLDER, FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER TO PURCHASE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INSTRUCTIONS.
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YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED FOR” IN PART I OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (i) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (ii) I intend to mail or deliver an application in the near future. I understand that (A) 28% of all reportable payments made to me will be withheld until I provide a taxpayer identification number and (B) I must provide my taxpayer identification number within 60 days of the date I sign this form.
SIGNATURE:___________________________________________ DATE:____________________________
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This Letter of Transmittal, properly completed and duly executed, together with certificates representing Warrants being tendered or confirmation of book-entry transfer and all other required documents should be sent or delivered by each Warrant holder of the Company who wishes to participate in the Offer or such holder’s broker, dealer, commercial bank, trust company or other nominee, to the Depositary by the Expiration Date at one of the addresses set forth below. Holders are encouraged to return a completed Substitute Form W-9 or Form W-8, as applicable, with this Letter of Transmittal.
The Depositary for the Offer is:
Continental Stock Transfer & Trust Company
Attn: Reorganization Dept.
17 Battery Place, 8th Floor
New York, NY 10004
Questions or requests for assistance or additional copies of the Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its address and telephone numbers set forth below. Warrant holders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
470 West Avenue, 3rd Floor
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and brokerage firms: (203) 658-9400
chart.info@morrowco.com
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EXHIBIT (a)(1)(C)
Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
CHART
ACQUISITION GROUP LLC
JOSEPH R. WRIGHT AND
COWEN INVESTMENTS LLC
Offer
to Purchase for Cash
Up to 7,492,300 Warrants
of
CHART ACQUISITION CORP.
at a Purchase Price of $0.30 Per Warrant
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, AT THE END OF THE DAY ON MARCH 11, 2015 OR SUCH LATER TIME AND DATE TO WHICH THE OFFER IS EXTENDED.
February 11, 2015
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Chart Acquisition Group LLC, Joseph R. Wright, and Cowen Investment LLC (which we collectively refer to as the “Purchasers”, “we”, “us” or “our”) are offering to purchase up to 7,492,300 of the outstanding public warrants (the “Warrants”) of Chart Acquisition Corp. (the “Company”), at a purchase price of $0.30 per Warrant, in cash, without interest (the “Purchase Price”), for an aggregate purchase price of $2,247,690 (each of the Warrants representing the right to purchase one share of the common stock of the Company, par value $0.0001 per share (the “Common Stock”), at an exercise price of $11.50 per share) upon the terms and subject to certain conditions described in the Offer to Purchase and in the related Letter of Transmittal (which together, as they may be amended or supplemented from time to time, constitute the “Offer”). All capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Offer to Purchase. Please furnish copies of the enclosed materials to your clients for whom you hold Warrants registered in your name or in the name of your nominee.
Enclosed with this letter are copies of the following documents:
1. Offer to Purchase dated February 11, 2015;
2. Letter of Transmittal (including substitute Form W-9), for your use in accepting the Offer and tendering Warrants of your clients;
3. Letter to Clients, for you to send to your clients for whose account you hold Warrants registered in your name or in the name of a nominee, with an Instruction Form provided for obtaining such client’s instructions with regard to the Offer; and
4. Return envelope addressed to Continental Stock Transfer & Trust Company, as the Depositary.
Warrant holders must make their own decision as to whether to tender their Warrants and, if so, how many Warrants to tender. Your clients should read carefully the information set forth or incorporated by reference in the Offer to Purchase and in the related Letter of Transmittal, including the Purchasers’ reasons for making the Offer.
Warrant holders who choose not to tender will not receive cash for their Warrants and the Warrants will remain outstanding.
The Offer is only available for outstanding Warrants. The Company also has outstanding Common Stock and units, each unit comprising one share of Common Stock and a Warrant to acquire one share of Common Stock. On behalf of your clients, you may tender Warrants that are included in units, but to do so, such Warrants must first be separated from the units prior to tendering such Warrants. See “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase. On the terms and subject to the conditions of the Offer, Purchasers will only pay for Warrants validly tendered and not properly withdrawn before the Expiration Date.
Certain conditions of the Offer are described in “The Offer — Section 6. Conditions of the Offer” of the Offer to Purchase. All tenders must be in proper form as described in “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase to be valid.
We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at 12:00 midnight, New York City time, at the end of the day on March 11, 2015 or such later time and date to which the Offer is extended.
Under no circumstances will interest be paid on the Purchase Price of the Warrants regardless of any extension of, or amendment to, the Offer or any delay in paying for such Warrants.
Purchasers will not pay any fees or commissions to any broker, dealer or other person (other than to the Information Agent, as described in the Offer to Purchase) in connection with the solicitation of tenders of Warrants pursuant to the Offer. However, Purchasers will, on request, reimburse you for customary mailing and handling expenses incurred by you in forwarding copies of the enclosed Offer materials to your clients.
As withholding agent for your clients, you are instructed to backup withhold on the gross proceeds of the Offer paid to your clients that do not submit the Form W-9, Form W-8BEN, W-8IMY or Form W-8ECI, as applicable, in accordance with appropriate accepted procedures. This withholding obligation is disclosed in the Offer to Purchase.
Questions and requests for assistance or for additional copies of the enclosed material may be directed to the Information Agent at the telephone number and address listed below.
Very truly yours,
Chart Acquisition Group LLC
Joseph R. Wright
Cowen Investments LLC
Nothing contained in this letter or in the enclosed documents shall render you or any other person the agent of Purchasers, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to give any information or use any document or make any statement on behalf of any of them with respect to the offer other than the enclosed documents and the statements contained therein.
The Information Agent for the Offer is:
470 West Avenue, 3rd Floor
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and brokerage firms: (203) 658-9400
chart.info@morrowco.com
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EXHIBIT (a)(1)(D)
Letter to Clients
CHART
ACQUISITION GROUP LLC
JOSEPH R. WRIGHT AND
COWEN INVESTMENTS LLC
Offer
to Purchase for Cash
Up to 7,492,300 Warrants
of
CHART ACQUISITION CORP.
at a Purchase Price of $0.30 Per Warrant
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, AT THE END OF THE DAY ON MARCH 11, 2015 OR SUCH LATER TIME AND DATE TO WHICH THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the offer to purchase dated February 11, 2015 (the “Offer to Purchase”) and the related letter of transmittal (“Letter of Transmittal”) (which together, as they may be amended or supplemented from time to time, constitute the “Offer”) in connection with the Offer by Chart Acquisition Group LLC, Joseph R. Wright, and Cowen Investments LLC (which we collectively refer to as the “Purchasers”, “we”, “us” or “our”) to purchase up to 7,492,300 of the outstanding public warrants (the “Warrants”) of Chart Acquisition Corp. (the “Company”), at a purchase price of $0.30 per Warrant, in cash, without interest (the “Purchase Price”), for an aggregate purchase price of $2,247,692 (each of the Warrants representing the right to purchase one share of the common stock of the Company, par value $0.0001 per share (the “Common Stock”), at an exercise price of $11.50 per share) upon the terms and subject to certain conditions of the Offer. All capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Offer to Purchase.
The Offer is only available for outstanding Warrants. The Company also has outstanding shares of Common Stock and units, each comprising one share of Common Stock and a Warrant to acquire one share of Common Stock. You may instruct us to tender Warrants on your behalf that are included in units, but to do so such Warrants must first be separated from the units prior to tendering such Warrants. See “The Offer – Section 3. Procedures for Tendering Warrants” of the Offer to Purchase. On the terms and subject to the conditions of the Offer, Purchasers will only pay for Warrants validly tendered and not properly withdrawn before the Expiration Date.
We are the holder of record of Warrants held for your account. As such, we are the only ones who can tender your Warrants in the Offer, and then only pursuant to your instructions. We are sending you the Letter of Transmittal for your information only; you cannot use it to tender Warrants we hold for your account.
Please instruct us as to whether you wish us to tender any or all of the Warrants we hold for your account on the terms and subject to the conditions of the Offer.
Please note the following:
1. You may tender your Warrants and receive the Purchase Price of $0.30 per Warrant, as indicated in the attached Instruction Form, in cash, without interest;
2. The Offer and withdrawal rights will expire at midnight, New York City time, at the end of the day on March 11, 2015, or such later time and date to which Purchasers extend the Offer;
3. The Offer is not conditioned on any minimum number of Warrants being tendered. However, the Offer is subject to certain other conditions. If certain events occur, Purchasers may not be obligated to purchase Warrants pursuant to the Offer. See “The Offer – Section 6. Conditions of the Offer” of the Offer to Purchase;
4. The Offer is for up to an aggregate 7,492,300 Warrants;
5. Tendering Warrant holders who are registered Warrant holders or who tender their Warrants directly to the Depositary will not be obligated to pay any brokerage commissions or fees, or solicitation fees except as set forth in the Offer to Purchase and the Letter of Transmittal;
6. If your Warrants are held as part of the Company’s outstanding units, you must first instruct us to separate the units before the Warrants may be tendered.
If you wish to have us tender any or all of your Warrants, please so instruct us by completing, executing, detaching and returning the attached Instruction Form. If you authorize us to tender your Warrants, we will tender all your Warrants unless you specify a lesser number on the attached Instruction Form.
Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit a tender on your behalf before the Expiration Date of the Offer (including, if applicable, sufficient time to effect the separation of the units). Please note that the Offer and withdrawal rights will expire at midnight, New York City time, at the end of the day on March 11, 2015, or such later time and date to which the Offer is extended.
The Offer is being made solely pursuant to the Offer to Purchase and the related Letter of Transmittal and is being made to all record holders of the Warrants. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Warrants residing in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of that jurisdiction.
None of the Company, the Company’s board of directors, the Filing Persons, the Information Agent, or the Depositary is making any recommendation to you as to whether to tender or refrain from tendering your Warrants pursuant to the Offer. You must make your own decision as to whether to tender your Warrants and, if so, how many Warrants to tender. In doing so, you should read carefully the information set forth or incorporated by reference in the Offer to Purchase and in the related Letter of Transmittal, including the purposes and effects of the Offer. See “The Offer – Section 2. Purposes of the Offer; Certain Effects of the Offer,” “The Business Combination,” and “The Offer – Section 11. Important Information Concerning the Company,” of the Offer to Purchase. You should discuss whether to tender your Warrants with your broker or other financial advisor, if any.
Warrant holders who choose not to tender will not receive cash for their Warrants and the Warrants will remain outstanding.
None of the sponsor, directors and executive officers of the Company will tender their Warrants pursuant to the Offer. See “The Offer — Section 9. Interests of Directors and Executive Officers; Certain Agreements.”
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INSTRUCTION FORM WITH RESPECT TO
CHART
ACQUISITION GROUP LLC
JOSEPH R. WRIGHT AND
COWEN INVESTMENTS LLC
Offer
to Purchase for Cash
Up to 7,492,300 Warrants
of
CHART ACQUISITION CORP.
at a Purchase Price of $0.30 Per Warrant
The undersigned acknowledge(s) receipt of your letter and the offer to purchase dated February 11, 2015 (the “Offer to Purchase”) and the related letter of transmittal (“Letter of Transmittal”) (which together, as they may be amended or supplemented from time to time, constitute the “Offer”) in connection with the Offer by Chart Acquisition Group LLC, Joseph R. Wright, and Cowen Investments LLC (the “Purchasers”) to purchase up to 7,492,300 of the outstanding public warrants (the “Warrants”) of Chart Acquisition Corp., at a purchase price of $0.30 per Warrant, in cash, without interest (the “Purchase Price”), for an aggregate purchase price of $2,247,690 (each of the Warrants representing the right to purchase one share of common stock, par value $0.0001 per share, at an exercise price of $11.50 per share) upon the terms and subject to certain conditions of the Offer.
The undersigned hereby instruct(s) you to tender to Purchasers the number of Warrants indicated below or, if no number is indicated below, all Warrants which are beneficially owned by the undersigned and registered in your name for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer.
¨ Please check if any or all Warrants being tendered are part of a unit (consisting of one share and one Warrant). As the Warrants you are being instructed to tender pursuant to the Offer are held as part of a unit, please separate the unit and undertake all actions necessary to allow for the tender of the outstanding Warrants.
NUMBER OF WARRANTS TO BE TENDERED HEREBY: _______________________________(1)
SIGNATURE: _______________________________
_________
(1) Unless otherwise indicated, it will be assumed that all Warrants held by us for your account are to be tendered.
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EXHIBIT (a)(1)(E)
GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM
W-9
Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payor — Social security numbers have nine digits separated by two hyphens (i.e., 000-00-0000). Employer identification numbers have nine digits separated by only one hyphen (i.e., 00-0000000). The table below will help determine the number to provide to the payer.
For this type of account: |
Give the name and social security number of: |
For this type of account: |
Give the name and taxpayer identification number of: |
1. Individual |
The individual |
6. Disregarded entity not owned by an individual |
The owner |
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2. Two or more individuals (joint account) |
The actual owner of the account or, if combined funds, the first individual on the account(1) |
7. A valid trust, estate, or pension trust |
The legal entity(4) |
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3. Custodian account of a minor (Uniform Gift to Minors Act) |
The minor(2) |
8. Corporation or LLC electing corporate status on Form 8832 or Form 2553 |
The corporation |
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4. (a) The usual revocable savings trust (grantor is also trustee) |
The grantor-trustee(1) |
9. Association, club, religious, charitable, educational, or other tax-exempt organization |
The organization |
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4. (b) So-called trust account that is not a legal or valid trust under state law |
The actual owner(1) |
10. Partnership or multi- member LLC
11. A broker or registered nominee |
The partnership
The broker or nominee |
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5. Sole proprietorship or disregarded entity owned by an individual |
The owner(3) |
12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments |
The public entity |
________
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.
(2) Circle the minor’s name and furnish the minor’s social security number.
(3) You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your taxpayer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)
NOTE: If more than one name is listed and no name is circled, the number will be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9, Cont.
Obtaining a Number
If you don’t have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at a local office of the Social Security Administration or the Internal Revenue Service or online at www.ssa.gov or www.irs.gov and apply for a number. Section references in these guidelines refer to sections under the Internal Revenue Code of 1986, as amended.
Payees Exempt From Backup Withholding
Even if the payee does not provide a taxpayer identification number in the manner required, you are not required to backup withhold on any payments you make if the payee is:
Even if the payee does not provide a taxpayer identification number in the manner required, you are not required to backup withhold on any payments you make if the payee is:
• An organization exempt from tax under Section 501(a), any individual retirement account (IRA), or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(f)(2).
• The United States or any of its agencies or instrumentalities.
• A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities.
• A foreign government or any of its political subdivisions, agencies, or instrumentalities.
• An international organization or any of its agencies or instrumentalities.
Other payees that may be exempt from backup withholding include:
• A corporation.
• A foreign central bank of issue.
• A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.
• A futures commission merchant registered with the Commodity Futures Trading Commission.
• A real estate investment trust (REIT).
• An entity registered at all times during the tax year under the Investment Company Act of 1940.
• A common trust fund operated by a bank under Section 584(a).
• A financial institution.
• A middleman known in the investment community as a nominee or custodian.
• A trust exempt from tax under Section 664 or described in Section 4947.
Payments Exempt From Backup Withholding
Dividends and patronage dividends that generally are exempt from backup withholding include:
• Payments to nonresident aliens subject to withholding under Section 1441.
• Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.
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• Payments of patronage dividends not paid in money.
• Payments made by certain foreign organizations.
• Section 404(k) distributions made by an employee stock ownership plan (ESOP).
Interest payments that generally are exempt from backup withholding include:
• Payments of interest on obligations issued by individuals. However, if you pay $600 or more of interest in the course of your trade or business to a payee, you must report the payment. Backup withholding applies to the reportable payment if the payee has not provided a taxpayer identification number or has provided an incorrect taxpayer identification number.
• Payments of tax-exempt interest (including exempt-interest dividends under Section 852).
• Payments described in Section 6049(b)(5) to nonresident aliens.
• Payments on tax-free covenant bonds under Section 1451.
• Payments made by certain foreign organizations.
• Mortgage or student loan interest paid to you.
Other types of payments that generally are exempt from backup withholding include:
• Wages.
• Distributions from a pension, annuity, profit-sharing or stock bonus plan, any IRA, an owner-employee plan or other deferred compensation plan.
• Distributions from a medical or health savings account and long-term care benefits.
• Certain surrenders of life insurance contracts.
• Gambling winnings if withholding is required under Section 3402(q). However, if withholding is not required under Section 3402(q), backup withholding applies if the payee fails to furnish a taxpayer identification number.
• Real estate transactions reportable under Section 6045(e).
• Cancelled debts reportable under Section 6050P.
• Fish purchases for cash reportable under Section 6050R.
Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” IN PART II, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N of the Internal Revenue Code of 1986, as amended.
Privacy Act Notice — Section 6109 of the Internal Revenue Code of 1986, as amended, requires you to give your correct taxpayer identification number to persons who must file information returns with the Internal Revenue Service to report, among other things, interest, dividends, and certain other income paid to you. The Internal Revenue Service uses the numbers for identification purposes and to help verify the accuracy of your tax return. The Internal Revenue Service may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states and the District of Columbia to carry out their tax laws. You must provide your taxpayer identification number whether or not you are required to file a tax return. Payers must generally withhold 28% (or the then prevailing rate) of taxable interest, dividend and certain other payments to a payee who does not give a taxpayer identification number to a payer. Certain penalties may also apply.
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Penalties —
(1) Penalty for Failure to Furnish Taxpayer Identification Number — If you fail to furnish your correct taxpayer identification number to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding — If you make a false statement with no reasonable basis that results in no imposition of backup withholding, you are subject to a penalty of $500.
(3) Civil and Criminal Penalties for False Information — Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
(4) Misuse of Taxpayer Identification Numbers — If the requester discloses or uses taxpayer identification numbers in violation of federal law, the requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.
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Exhibit (d)(3)
SECOND AMENDED AND RESTATED WARRANT AGREEMENT
THIS SECOND AMENDED AND RESTATED WARRANT AGREEMENT (this “Agreement”), dated as of March __, 2015, is by and between Chart Acquisition Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”).
WHEREAS, the Company has entered into that certain Third Amended and Restated Unit Subscription Agreement, dated November 1, 2012, with Chart Acquisition Group LLC, a Delaware limited liability company (the “Sponsor”) pursuant to which the Sponsor purchased an aggregate of 231,250 Units (as defined below) for an aggregate purchase price of $2,312,500 (“Placement Units”), each Unit consisting of one share of Common Stock (as defined below) (“Placement Shares”) and one warrant to purchase one Placement Share (the “Placement Warrants”) of the Company, bearing the legend set forth in Exhibit B hereto;
WHEREAS, the Company has entered into that certain Third Amended and Restated Unit Subscription Agreement, dated November 1, 2012, with Cowen Overseas Investment LP, a Cayman Islands limited partnership (together with its affiliates, “Cowen”) pursuant to which Cowen purchased an aggregate of 131,250 Placement Units of the Company for an aggregate purchase price of $1,312,500, bearing the legend set forth in Exhibit B hereto;
WHEREAS, the Company has entered into that certain Second Amended and Restated Unit Subscription Agreement, dated November 1, 2012, with Joseph R. Wright (“Wright”) pursuant to which Wright purchased an aggregate of 12,500 Placement Units of the Company for an aggregate purchase price of $125,000, bearing the legend set forth in Exhibit B hereto;
WHEREAS, the Company engaged in an initial public offering (the “Offering”) of units of the Company’s equity securities, each such unit comprised of one share of Common Stock and one Public Warrant (as defined below) (the “Public Units”, and together with the Placement Units, the “Units”) and, in connection therewith, has determined to issue and deliver up to 8,625,000 Warrants (which included up to 1,125,000 warrants subject to a forty-five (45) day over-allotment option granted to the underwriters (the “Over allotment Option”) which expired unexercised) to investors in the Offering (the “Public Warrants” and, together with the Placement Warrants, the “Warrants”), each such Warrant evidencing the right of the holder thereof to purchase one share of common stock of the Company, $0.0001 par value per share (the “Common Stock”), for $11.50 per share, subject to adjustment as described herein;
WHEREAS, in connection with the Offering, Cowen, Mr. Wright and the Sponsor have agreed to purchase in the aggregate up to 3,750,000 Public Warrants (subject to reduction as described in that certain second amended and restated escrow agreement with the Warrant Agent at $0.60 per warrant (the “Business Combination Repurchased Public Warrants”)) in a tender offer to occur after the Company’s announcement of an initial Business Combination;
WHEREAS, the Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, No. 333-177280 (the “Registration Statement”) and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Public Units, the Public Warrants and Common Stock included in the Public Units;
WHEREAS, the Company and the Warrant Agent entered into the Warrant Agreement on December 13, 2012;
WHEREAS, the Company and the Warrant Agent entered into the Amended and Restated Warrant Agreement on September 12, 2014 (the “Current Agreement”);
WHEREAS, Cowen, Mr. Wright and the Sponsor acquired 7,700 Public Warrants in a tender offer consummated on September 12, 2014;
WHEREAS, the requisite number of stockholders of the Company have approved an amendment to the Company’s second amended and restated certificate of incorporation (the “Extension Amendment”) to, among other things, extend the date before which the Company must complete a business combination from March 13, 2015 (the “Original Termination Date”) to June 13, 2015 (the “Extended Termination Date”);
WHEREAS, in connection with the Extension Amendment, Cowen, Mr. Wright and the Sponsor have agreed to purchase in the aggregate up to 7,492,300 Public Warrants (as defined below) at $0.30 per warrant (the “Extension Repurchased Public Warrants”) in a tender offer which is expected to close on or about the Original Termination Date (the Extension Repurchased Public Warrants together with the Business Combination Repurchased Public Warrants, the “Repurchased Public Warrants”); and
WHEREAS, the Company desires to amend and restate the Current Agreement to provide, among other things, that the Expiration Date of each Warrant is extended so that the Warrants will expire if the Company has not completed a business combination by the Extended Termination Date.
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 and 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, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
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 (the “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 is registered in the Warrant Register (the “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 (as defined below) 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 Common Stock and Public Warrants comprising the Public Units shall begin separate trading on the 52nd day following the date of the Prospectus, or, if such 52nd day is not on a Business Day (a “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City), then on the immediately succeeding Business Day following such date (the “Detachment Date”) unless Cowen and Company, LLC informs the Company of their decision to allow earlier separate trading, but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded until (A) the Company has filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting its receipt of the gross proceeds of the Offering and (B) the Company issues a press release and files with the Commission a current report on Form 8-K announcing when such separate trading shall begin; provided, that, if the Over-allotment Option is exercised following the filing of the initial Current Report on Form 8-K, a second or amended Current Report on Form 8-K shall be filed by the Company to provide updated financial information to reflect the exercise of the Over-allotment Option.
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2.5. Warrant Attributes.
2.5.1. Placement Warrants and Repurchased Public Warrants. The Placement Warrants and Repurchased Public Warrants shall be identical to the Public Warrants, except that (i) so long as they are held by Wright, the Sponsor or Cowen, members of the Sponsor, partners of Cowen or any of their Permitted Transferees (as defined below), the Placement Warrants and Repurchased Public Warrants (x) may be exercised for cash or on a cashless basis, pursuant to subsection 3.3.1(c) hereof, (y) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business Combination (as defined below); provided that any Placement Warrants held by Cowen or any of its “related persons” under the rules of the Financial Industry Regulatory Authority shall not be sold during the Offering or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of any such Placement Warrants by any person for a period of 180 days immediately following the date of effectiveness of the Registration Statement, and (z) shall not be redeemable by the Company, and (ii) the Placement Warrants issued to Cowen, so long as such Placement Warrants are held by Cowen or any of its “related persons” under the rules of the Financial Industry Regulatory Authority (“Cowen Held Warrants”), shall expire five years from the date of effectiveness of the Registration Statement (not five years from the consummation of the initial Business Combination) or earlier upon liquidation; provided, however, that in the case of the Placement Warrants and Repurchased Public Warrants and any shares of Common Stock held by Wright, the Sponsor, members of the Sponsor or partners of Cowen and issued upon exercise of the Placement Warrants and Repurchased Public Warrants may be transferred by Wright, the Sponsor, members of the Sponsor or partners of Cowen:
(a) as gift to a member of Sponsor, a partner of Cowen or an entity owned or controlled by Wright, their immediate family or to a trust, the beneficiary of which is a member of Wright’s immediate family, the Sponsor or partner of Cowen and their immediate family or to a charitable organization,
(b) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any member of Sponsor or partners of Cowen or any of their respective affiliates,
(c) by virtue of the laws of descent and distribution upon death of Wright, one of the members of the Sponsor or partners of Cowen,
(d) pursuant to a qualified domestic relations order,
(e) by virtue of the laws of the jurisdiction of incorporation or formation, as applicable, of the Sponsor or Cowen, the Sponsor’s limited liability company agreement upon dissolution of the Sponsor or, in the case of Cowen, by virtue of the laws of the Cayman Islands or its controlling limited partnership agreement or by any member of Sponsor or partner of Cowen upon dissolution of such entity,
(f) in the event of the Company’s liquidation prior to the completion of the initial Business Combination, or
(g) in the event that, subsequent to the consummation of the initial Business Combination, the Company consummates a merger, stock exchange or other similar transaction that results in all of the holders of the Company’s equity securities issued in the Offering having the right to exchange their shares of Common Stock for cash, securities or other property; provided, however, that, in the case of clauses (a) through (e), these transferees (the “Permitted Transferees”) enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.
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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 Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per 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 Agreement shall mean the price per share at which a share of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.
3.2. Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes an acquisition, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”), or (ii) the date that is twelve (12) months from the date of the closing of the Offering, and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) with respect to any warrant other than a Cowen Held Warrant, the date that is five (5) years after the date on which the Company completes its initial Business Combination and, with respect to a Cowen Held Warrant, the date that is five (5) years after the date on which the Registration Statement is declared effective by the Commission, (y) the liquidation of the Company, or if the Company fails to consummate a Business Combination thirty (30) months from the effective date of the Registration Statement, or (z) other than with respect to the Placement Warrants and the Repurchased Public Warrants, the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration statement. Except with respect to the right to receive the Redemption Price (other than with respect to a Placement Warrant) in the event of a redemption (as set forth in Section 6 hereof), each Warrant (other than a Placement Warrant or a Repurchased Public Warrant in the event of a redemption) 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 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants.
3.3. Exercise of Warrants.
3.3.1. Payment. Subject to the provisions of the Warrant and this 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 share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows:
(a) by wire transfer of immediately available funds in good certified check or good bank draft payable to the order of the Company;
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(b) with respect to any Placement Warrant or Repurchased Public Warrant exercised on a “cashless basis”, so long as such Placement Warrant or Repurchased Public Warrant is held by Wright, the Sponsor, a member of the Sponsor, Cowen or partners of Cowen or their Permitted Transferees, by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the “Fair Market Value”, as defined in this subsection 3.3.1(c), by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Fair Market Value” shall mean the last sale price of the Common Stock on the date on which notice of exercise of the Warrant is sent to the Warrant Agent, in the event notice is received after market close it shall mean the last sale price the next trading day; or
(c) as provided in Section 7.4 hereof.
3.3.2. Issuance of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Common Stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4. No Warrant shall be exercisable and the Company shall not be obligated to issue Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless, in which case the purchaser of a Unit containing such Public Warrants shall have paid the full purchase price for the Unit solely for the Common Stock underlying such Unit. In no event will the Company be required to net cash settle the Warrant exercise.
3.3.3. Valid Issuance. All Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.
3.3.4. Date of Issuance. Each person in whose name any certificate for Common Stock is issued shall for all purposes be deemed to have become the holder of record of such Common Stock 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.
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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; provided, however, that 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 Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Common Stock 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 stock 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 shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, 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 Continental Stock Transfer & Trust Company (the “Transfer Agent”) setting forth the number of shares of Common Stock 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 shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock 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 shares of Common Stock 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. Stock Dividends.
4.1.1. Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in Common Stock, or by a split-up of the Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase Common Stock at a price less than the “Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock 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 Common Stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering divided by (y) the Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, 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, for purposes of this subsection 4.1.1 only, the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the Common Stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
4.1.2. Extraordinary Dividends. If the Company, at any time while 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 Common Stock on account of such Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Common Stock in connection with a proposed initial Business Combination, (d) as a result of the repurchase of Common Stock by the Company if a proposed initial Business Combination is presented to the stockholders of the Company for approval 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/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, “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 Common Stock 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 shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering).
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4.2. Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3. Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4. Replacement of Securities upon Reorganization, etc. If, at any time while any Warrant is outstanding (i) the Company effects (A) any merger of the Company with (but not into) another person, in which stockholders of the Company measured immediately prior to the consummation of such transaction, consequently own less than a majority of the outstanding stock of the surviving entity, or (B) any merger or consolidation of the Company into another person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer approved or authorized by the Company’s Board of Directors is completed pursuant to which holders of at least a majority of the outstanding shares of Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the shares of Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered elsewhere in this Section 4) (in any such case, a “Fundamental Transaction”), then the Registered Holder shall have the right thereafter to receive, upon exercise of such Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of shares underlying the Warrants then issuable upon exercise in full of such Warrant without regard to any limitations on exercise contained herein (the “Alternate Consideration”), and the Registered Holder shall no longer have the right to receive such shares upon exercise of such Warrant. Notwithstanding anything to the contrary contained herein, the provisions of this section shall not be deemed to apply to, and no Fundamental Transaction shall be deemed to have occurred in connection with, any Business Combination. The Company shall not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or person shall assume the obligation to deliver to the Registered Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Registered Holder may be entitled to receive, and the other obligations under the Warrant. The provisions of this section 4.4 shall similarly apply to subsequent transactions of an analogous type to any Fundamental Transaction. Notwithstanding the foregoing, in the event of a Fundamental Transaction, then at the request of the Registered Holder delivered at any time through the date that is 30 days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company (or the successor entity to the Company) shall purchase such Warrant from the Registered Holder by paying to the Registered Holder, within five Trading Days after such request, cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of such Warrant on the date of such Fundamental Transaction. Any Registered Holder that receives cash pursuant to the immediately preceding sentence shall not receive any Alternate Consideration. For purposes hereof, “Black Scholes Value” means the value of the Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg using (i) a price per share of Common Stock equal to the Closing Sale Price of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of such Warrant as of such date of request, and (iii) an expected volatility equal to the greater of (A) forty percent (40%) and (B) the 30-day volatility obtained from the HVT function on Bloomberg determined as of the Trading Day immediately following the announcement of the Fundamental Transaction, (iv) a “Style” of “Warrant” and (v) a “Warrant type” of “Capped” where “Call cap” equals $17.50, subject to adjustment under Section 4.1.
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4.5. Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.6. No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up to the nearest whole number, the number of the shares of Common Stock to be issued to such holder.
4.7. Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the 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.
4.8. 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 they determine 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.
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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 (as in the case of the Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof 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 shall 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, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6. Transfer of Warrants. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after the Detachment Date.
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 notice to the Registered Holders of the Warrants, as described in Section 6.2 below, at the price of $0.01 per Warrant (the “Redemption Price”); provided, that the last sales price of the Common Stock reported has been at least $17.50 per share (subject to adjustment in compliance with Section 4 hereof), on each of twenty (20) trading days within the thirty (30) trading-day period ending on the third Business Day prior to the date on which notice of the redemption is given; provided further, in the event there was no actual trading of the Warrants for any day within such 30-Day trading period, then the closing bid price on such day must be at least $17.50 per share to count; and, provided further that there is an effective registration statement covering the Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.2 below).
6.2. Date Fixed for, and Notice of, Redemption. In the event that the Company elects 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 thirty (30) days prior to the Redemption Date (such 30-day period, the “Redemption Period”) 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.
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6.3. Exercise After Notice of Redemption. The Warrants may be exercised 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. 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 Placement Warrants or Repurchased Public Warrants. The Company agrees that the redemption rights provided in this Section 6 shall not apply to the Placement Warrants or Repurchased Public Warrants if at the time of the redemption such Placement Warrants or Repurchased Public Warrants continue to be held by Wright, the Sponsor, members of the Sponsor, Cowen, partners of Cowen or their Permitted Transferees; provided, however, that once such Placement Warrants or Repurchased Public Warrants are transferred (other than to Permitted Transferees under subsection 2.5), the Company may redeem the Placement Warrants or Repurchased Public Warrants, provided that the criteria for redemption are met, including the opportunity of the holder of such Placement Warrants or Repurchased Public Warrants to exercise the Placement Warrants or Repurchased Public Warrants prior to redemption pursuant to Section 6.3. Placement Warrants or Repurchased Public Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer cease to be Placement Warrants and shall become Public Warrants under this Agreement.
7. | Other Provisions Relating to Rights of Holders of Warrants. |
7.1. No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
7.2. Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4. Registration of Common Stock. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after the closing of its initial Business Combination, it shall use its best efforts to file with the Commission a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, and it shall use its best efforts to take such action as is necessary to register or qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants, to the extent an exemption is not available. The Company shall use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Agreement. If any such post-effective amendment or registration statement has not been declared effective by the sixtieth (60th) Business Day following the closing of the Business Combination, holders of the Warrants shall have the right, during the period beginning on the sixty-first (61st) Business Day after the closing of the Business Combination and ending upon such post-effective amendment or registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the “Fair Market Value” (as defined below) by the Fair Market Value. Solely for purposes of this Section 7.4, “Fair Market Value” shall mean the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. 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 exercise of the Warrants on a cashless basis in accordance with this Section 7.4 is not required to be registered under the Securities Act and (ii) the Common Stock issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act) of the Company and, accordingly, shall 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. In addition, the Company agrees to use its best efforts to register the Common Stock issuable upon exercise of a Warrant under the blue sky laws of the states of residence of the exercising Warrant holder to the extent an exemption is not available.
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8. | Concerning the Warrant Agent and Other Matters. |
8.1. Payment of Taxes. The Company shall 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 Common Stock upon the exercise of the 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 thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a 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 Common Stock not later than the effective date of any such appointment.
8.2.3. Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
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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 shall, pursuant to its obligations under this Agreement, 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 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 President, 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). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not 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 Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any Common Stock shall, 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 monies received by the Warrant Agent for the purchase of the Common Stock through the exercise of the Warrants.
8.6. Waiver. The Warrant Agent has no 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. The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
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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 Agreement shall be sufficiently given (i) when so delivered if by hand or overnight delivery, (ii) upon receipt of by the intended recipient if by facsimile, or (ii) if sent by certified mail or private courier service within five
(5) days after deposit of such notice, postage prepaid. Such notice, statement or demand shall be addressed as follows:
If to the Company:
Chart Acquisition Corp.
555 5th Avenue, 19th Floor,
New York, NY 10017
Fax: (212) 350-8299
Attention: Michael LaBarbera, Chief Financial Officer
If to the Warrant Agent:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Fax: 212-616-7615
Attention: Compliance Department
If to Cowen:
Cowen Investments LLC
c/o RCG LV Pearl LLC
599 Lexington Avenue, 27th Floor
New York, NY 10022
Fax: (212) 845-7990
Attention: Stephen Lasota, Chief Financial Officer
with a copy in each case (which shall not constitute service) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Fax: (212) 370-7889
Attention: Douglas S. Ellenoff
DLA Piper LLP (US)
1251 Avenue of Americas
New York, New York 10020
Fax: (212) 884-8645
Attention: Jack Kantrowitz, Esq.
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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 inconvenient forum.
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 any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5. Examination of the 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 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 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 and any amendment to the terms of only the Placement Warrants or Cowen Held Warrants, shall require the written consent of the Registered Holders of 65% of the then outstanding Public Warrants. Further, Wright, the Sponsor, the members of the Sponsor, Cowen, partners of Cowen shall not vote any Placement Warrants owned or controlled by them in favor of such amendment unless the Registered Holders of 65% of the Public Warrants vote in favor of such amendment. 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. To the extent any amendment is made to either the Placement Warrants, Cowen Held Warrants or Repurchased Public Warrants resulting in an increase in value (including for example, an extension to the Expiration Date), such amendment will also be made to all Public Warrants. In addition, there can be no such amendment to the Placement Warrants, Cowen Held Warrants or Repurchased Public Warrants after the Public Warrants have been redeemed.
9.9. Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Remainder of page intentionally left blank. Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
CHART ACQUISITION CORP. | ||
By: | ||
Name: Michael LaBarbera | ||
Title: Chief Financial Officer | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, | ||
as Warrant Agent | ||
By: | ||
Name: | ||
Title: |
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EXHIBIT A
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
CHART ACQUISITION CORP.
A Delaware corporation
CUSIP 161151 113
Warrant Certificate
This Warrant Certificate certifies that __________, or registered assigns, is the registered holder of __________ warrants (the “Warrants”) to purchase shares of common stock, $0.0001 par value (the “Common Stock”), of Chart Acquisition Corp. (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Common Stock (each, a “Warrant” ) as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” if permitted by the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement (as defined on the reverse hereof).
Each Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Exercise Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant 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.
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of December 13, 2012 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” if permitted by the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise
(i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through “cashless exercise” if permitted by the Warrant Agreement. Additionally, if the Corporation fails to enter into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Corporation and one or more businesses within 21 months from the Company’s final prospectus, the Warrants evidenced by this Warrant Certificate shall expire worthless.
The Warrant Agreement provides that upon the occurrence of certain events the number of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round up to the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or 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 evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certificate at the office 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(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
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The Company and the Warrant Agent may deem and treat the Registered Holder(s) thereof as the absolute owner(s) 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 holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive __________ shares of Common Stock and herewith tenders payment for such shares to the order of Chart Acquisition Corp. (the “Company”) in the amount of $__________ in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of __________, whose address is__________ and that such shares be delivered to __________ whose address is __________. If said number of shares is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of __________, whose address is __________, and that such Warrant Certificate be delivered to __________, whose address is __________.
In the event that the Warrant is a Placement Warrant or Repurchased Public Warrant that is to be exercised on a “cashless basis” pursuant to subsections 3.3.1(b) of the Warrant Agreement, the number of shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(b) of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless basis” pursuant to Section 7.4 of the Warrant Agreement, the number of shares that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock. If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of, whose address is, and that such Warrant Certificate be delivered to , whose address is __________.
Date: __________, 20
(Signature) | |
Signature | 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).
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EXHIBIT B
LEGEND
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AGREEMENT AND MAY ONLY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THAT LOCKUP AGREEMENT PURSUANT TO THE TERMS SET FORTH THEREIN.
No. Warrants
19
Exhibit (d)(5)
March __, 2015
Chart Acquisition Corp.
555 5th Avenue, 19th Floor
New York, New York 10017
Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005
Cowen and Company, LLC
599 Lexington Avenue
New York, New York10022
Re: Initial Public Offering
Ladies and Gentlemen:
This second amended and restated letter agreement (“Letter Agreement”) amends and restates that certain amended and restated Letter Agreement, dated as of September 9, 2014 (the “Original Letter Agreement”) by and among Chart Acquisition Corp., a Delaware corporation (the “Company”), Deutsche Bank Securities, Inc. and Cowen and Company, LLC, as the representatives of the underwriters (the “Underwriters”) and the Insiders (as defined below). The Original Letter Agreement was delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between the Company and the Underwriters, relating to the Company’s underwritten initial public offering (the “Offering”), of 7,500,000 of the Company’s units (the “Units”), each comprised of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant exercisable for one share of Common Stock (each, a “Warrant”). The Units sold in the Offering have been listed on the Nasdaq Capital Market pursuant to a registration statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission (the “Commission”). Certain capitalized terms used herein are defined in paragraph 16 hereof.
WHEREAS, the requisite number of stockholders of the Company have approved an amendment to the Company’s amended and restated certificate of incorporation to, among other things, extend the date before which the Company must complete a business combination from March 13, 2015 (the “Original Termination Date”) to June 13, 2015 (the “Extended Termination Date”); and
WHEREAS, the parties to the Original Letter Agreement desire to amend and restate the Original Letter Agreement to provide, among other things, that any references to the Original Termination Date shall be replaced with the Extended Termination Date.
The Insiders and Underwriters hereby agree with the Company as follows:
1. Each Insider of the Company hereby agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection with such proposed Business Combination, such person shall vote, as applicable, all Founder Shares, Placement Shares and any shares acquired by such person in the Offering or in the secondary public market in favor of such proposed Business Combination.
2. (a) Each Insider of the Company hereby agrees that in the event that the Company fails to consummate a Business Combination within 30 months from the date of the Prospectus, such person, shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Common Stock held by the Public Stockholders, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any amounts representing interest earned on the Trust Account less any interest released for working capital purposes, payment of taxes or dissolution expenses, divided by the number of shares of Common Stock then outstanding, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Insiders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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(b) Each of the Company and its officers and directors hereby agree they will not propose any amendment to the Company's amended and restated certificate of incorporation that would affect the substance or timing of the Company's redemption obligation, as described in Section 9.1(a) of the Company’s amended and restated certificate of incorporation.
(c) Each Insider acknowledges that such party has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the Trust Account with respect to the Founder Shares or Placement Shares only.
(d) Each Insider hereby further waives, with respect to any shares of the Common Stock or Placement Shares held by such undersigned party, any redemption rights such party may have (i) in connection with the consummation of a Business Combination, (ii) if the Company fails to consummate its initial Business Combination within 30 months from the date of the Prospectus; provided, however, that if any of the Insiders, should acquire public shares in or after the Offering, such Insiders will be entitled to redemption rights with respect to such public shares if the Company fails to consummate a Business Combination within 30 months from the date of the Prospectus, (iii) in connection with an expired or unwithdrawn tender offer, and (iv) upon the liquidation of the Company prior to the expiration of the 30 month period.
3. (a) To the extent that the Underwriters do not exercise their over-allotment option to purchase an additional 1,125,000 shares of Common Stock (as described in the Prospectus), the Insiders (except Messrs. Joseph R. Wright, Governor Thomas Ridge, Senator Joseph Robert Kerrey, Timothy N. Teen and Manuel D. Medina) shall return to the Company for cancellation, at no cost, an aggregate number of Founder Shares determined by multiplying 281,250 by a fraction: (i) the numerator of which is 1,125,000 minus the number of shares of the Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,125,000. The Insiders further agree that to the extent that: (A) the size of the Offering is increased or decreased and (B) the Insiders have either purchased or sold shares of the Common Stock or an adjustment to the number of Founder Shares has been effected by way of a stock split, stock dividend, reverse stock split, contribution back to capital or otherwise, in each case in connection with such increase or decrease in the size of the Offering, then, (x) the references to 1,125,000 in the numerator and denominator of the formula in the immediately preceding sentence shall be changed to a number equal to 15% of the number of shares included in the Units issued in the Offering and (y) the reference to 281,250 in the formula set forth in the immediately preceding sentence shall be adjusted to such number of shares of the Common Stock that the Insiders would have to return to the Company in order that the Insiders will hold an aggregate of 20% of the Company’s issued and outstanding shares (which 20% shall include any Founder Shares held by each of Messrs. Wright, Ridge, Kerrey, Teen and Medina) after the Offering (assuming the Underwriters do not exercise their over-allotment option and excluding any Placement Shares).
(b) In the case of any of the Founder Shares owned by the Insiders that are not subject to forfeiture pursuant to paragraph 3(a) above, until the earlier of (A) one year after the consummation of the Business Combination or earlier if, subsequent to the Business Combination, the last sales price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (B) the date on which the Company consummates a liquidation, merger, stock exchange or other similar transaction after the Business Combination that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (such applicable period being the “Founder Lock-Up Period”); provided that, to the extent any Founder Shares remain subject to forfeiture as described in this paragraph 3(b)(i) and (ii) below, the Founder Lock-up Period shall be automatically extended until such Founder Shares are no longer subject to forfeiture; the Insiders shall not, except as described in the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”), with respect to the Founder Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Founder Shares, whether any such transaction is to be settled by delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (b)(i) or (b)(ii). Each of the Insiders, agrees, with respect to the Founder Shares that are the subject to this paragraph 3(b), in the event the Company’s trading price of the Common Stock does not exceed the following price targets subsequent to the Business Combination, such Insider acknowledges and agrees that it, he or she shall forfeit any and all rights to a portion of the Founder Shares, as follows:
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(i) in the event the last sale price of the Common Stock does not equal or exceed $11.50 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 60 months following the closing of the Business Combination, the Insiders (and Permitted Transferees) shall forfeit pro-rata any and all rights to an aggregate of 2.5% of shares of Common Stock issued and outstanding (after exercise or expiration of the Over-allotment Option and excluding any Placement Shares); and
(ii) in the event the last sale price of the Common Stock does not equal or exceed $13.50 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 60 months following the closing of the Business Combination, the Insider (and Permitted Transferees) shall forfeit pro-rata any and all rights to 2.5% of shares of Common Stock issued and outstanding (after exercise or expiration of the Over-allotment Option and excluding any Placement Shares) in addition to any shares forfeited under Section 3(a)(i) above.
(c) Until 30 days after the consummation of the Business Combination (“Placement Unit Lock-Up Period”), each of Sponsor, Mr. Joseph R. Wright and Cowen shall not, except as described in the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to the Placement Units, Placement Shares, Placement Warrants, Tendered Warrants or shares of Common Stock underlying the Placement Warrants or Tendered Warrants, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Placement Units, Placement Shares, Placement Warrants, Tendered Warrants or shares of Common Stock underlying the Placement Warrants or Tendered Warrants, whether any such transaction is to be settled by delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (c)(i) or (c)(ii).
(d) Notwithstanding the provisions contained in paragraphs 3(b) and 3(c) herein, any Insider or Cowen may transfer, as applicable, the Founder Shares and/or Placement Units, Placement Shares, Placement Warrants, Tendered Warrants or shares of Common Stock underlying the Placement Warrants or Tendered Warrants: (i) to the Company’s officers or directors, to the other Insiders, any affiliates or family members of any of the Company’s officers, directors or other Insiders, any member of Sponsor or partners, affiliates or employees of members of the Sponsor, or partners of Cowen or any of their respective affiliates; (ii) by gift to a member of the Sponsor or partners, affiliates, or employees of the members of the Sponsor, or a partner of Cowen or their immediate family or one of the Insiders, an immediate family member of one of the members of the Sponsor or to a trust, the beneficiary of which is a member of Sponsor or a family member of a member of the Sponsor or partners, affiliates or employees of the members of the Sponsor, or partner of Cowen and their immediate family, or an Insider, or to a charitable organization; (iii) by virtue of the laws of descent and distribution upon death of an Insider (including members of Sponsor) or a partner of Cowen; (iv) pursuant to a qualified domestic relations order; (v) by virtue of the laws of the state of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor or, in the case of Cowen, by virtue of the laws of the Cayman Islands or its controlling limited partnership agreement; (vi) in the event of the Company’s liquidation prior to the completion of the Business Combination; or (vii) in the event that the Company consummates a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of the Common Stock for cash, securities or other property subsequent to the consummation of the Business Combination; provided, however, that, in the case of clauses (i) through (v), these permitted transferees (each, a “Permitted Transferee”) enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in paragraphs 3(b) and 3(c) herein; provided, further that any Placement Units, Placement Shares or Placement Warrants held by Cowen or any of its “related persons” under the rules of the Financial Industry Regulatory Authority shall not be sold during the Offering or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of any such Placement Units, Placement Shares or Placement Warrants by any person for a period of 180 days immediately following the date of effectiveness of the registration statement of which the Prospectus forms a part.
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(e) Further, each Insider agrees that after the Founder Lock-Up Period or the Placement Unit Lock-Up Period, as applicable, has elapsed, the Founder Shares and/or Placement Units, Placement Shares, Placement Warrants or shares of Common Stock underlying the Placement Warrants owned by such Insider shall only be transferable or saleable pursuant to a sale registered under the Securities Act or pursuant to an available exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”). The Company and each Insider acknowledges that pursuant to that certain registration rights agreement to be entered into among the Company and certain securityholders of the Company, parties to the agreement may request that a registration statement relating to the Founder Shares and/or Placement Units, Placement Shares, Placement Warrants or shares of Common Stock underlying the Placement Warrants be filed by the Company with the Commission prior to the end of the Founder Lock-Up Period or the Placement Unit Lock-Up Period, as the case may be; provided, however, that such registration statement does not become effective prior to the end of the Founder Lock-Up Period or the Placement Unit Lock-Up Period, as applicable.
(f) Subject to the limitations described herein, each Insider shall retain all of such Insider’s rights as a securityholder during, as applicable, the Founder Lock-up Period and/or Placement Unit Lock-Up Period including, without limitation, the right to vote, as the case may be, the Founder Shares and/or Placement Shares.
(g) During the Founder Lock-Up Period and Placement Unit Lock-Up Period, all dividends payable in cash with respect to such securities shall be paid, as applicable, to each security holder, but all dividends payable in Common Stock or other non-cash property shall become subject to the applicable lock-up period as described herein and shall only be released from such lock-up in accordance with the provisions of this paragraph 3.
(h) Cowen agrees to purchase up to 1,312,500 Warrants, Joseph R. Wright agrees to purchase up to 125,000 Warrants, and the Sponsor (together with Cowen and Joseph R. Wright, the “Warrant Purchasers”) agrees to purchase up to 2,312,500 Warrants, in each case, at a purchase price of $0.60 per Warrant in a tender offer which will occur after the announcement by the Company of its having entered into a binding agreement with respect to its initial Business Combination (the “Warrant Tender Offer”); provided, however, that the aggregate number of Warrants subject to the Warrant Tender Offer shall be reduced at a ratio of one for every two Warrants tendered pursuant to the Warrant Extension Tender Offer (as defined below) and the tender offer consummated by the Warrant Purchasers on September 12, 2014 (the “Initial Warrant Tender Offer”) (rounded to the nearest number). In the event of any such reduction, the amount of Warrants each Warrant Purchaser agrees to purchase shall be reduced pro rata. Each of the Warrant Purchasers further agrees not to tender any of its Placement Warrants or any public warrants it may hold in the Warrant Tender Offer, which shall be consummated only upon, and simultaneously with, a Business Combination. The Warrant Purchasers also agree to deposit with Continental Stock Transfer & Trust Company (“Escrow Account”) an aggregate of $2,250,000 (representing $0.60 per Warrant for up to 3,750,000 of the Warrants), of which $2,247,690 remains following the consummation of the Initial Warrant Tender Offer. Each of the Warrant Purchasers further agrees that in the event the Company is unable to consummate the initial Business Combination, Continental Stock Transfer & Trust Company shall distribute to the holders of the Warrants the entire Escrow Account (as reduced by the amounts distributed in connection with the Warrant Extension Tender Offer), as promptly as reasonably possible, but no more than five business days after 30 months from the date of the Prospectus.
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(i) Cowen agrees to purchase up to 2,622,305 Warrants, Joseph R. Wright agrees to purchase up to 249,746 Warrants, and the Sponsor agrees to purchase up to 4,620,249 Warrants, in each case, at a purchase price of $0.30 per Warrant in a tender offer which will close on or about the Original Termination Date (the “Warrant Extension Tender Offer”). Each of the Warrant Purchasers further agrees not to tender any of its Placement Warrants or any public warrants it may hold in the Warrant Extension Tender Offer.
4. Without limiting the provisions of paragraph 3 hereof, during the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, each of the undersigned shall not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to any Units, Placement Units, shares of Common Stock, Warrants, Placement Shares, Placement Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by an undersigned party, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, Placement Units, shares of Common Stock, Warrants, Placement Shares, Placement Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by the undersigned, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii).
5. In the event of the liquidation of the Trust Account without the consummation of a Business Combination, each of Joseph R. Wright and Christopher D. Brady (the “Indemnitors”) agree to jointly and severally indemnify and hold harmless the Company 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, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to the Company or (ii) a prospective target business with which the Company has discussed entering into a transaction agreement for a Business Combination (a “Target”) as described in the Prospectus; provided, however, that such indemnification of the Company by the Indemnitors shall apply only to the extent necessary to ensure that such claims by a third party for services rendered or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below $10.00 (or approximately $9.96 if the over-allotment is exercised in full) per share of the Common Stock sold in the Offering (the “Offering Shares”), and, provided, further, that only if such third party or Target has not executed an agreement waiving claims against and all rights to seek access to the Trust Account whether or not such agreement is enforceable. In the event that any such executed waiver is deemed to be unenforceable against such third party, the Indemnitors shall not be responsible for any liability as a result of any such third party claims. Notwithstanding any of the foregoing, such indemnification of the Company by the Indemnitors shall not apply as to any claims under the Company’s obligation to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act. The Indemnitors shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitors, the Indemnitors notify the Company in writing that the Indemnitors shall undertake such defense.
6. Each of the undersigned and the Company agrees that the Company will not engage any third party to render services, agree to purchase any products from such third party, or enter into any discussion or any acquisition agreement with a Target unless (i) such third party or Target has agreed to execute a waiver against any right, title, interest or claim of any kind in or to any monies held in the Trust Account or any proceeds from the Trust Account that is acceptable to the Board of Directors of the Company (the “Board”) or (ii) the Board has consented in writing to dispense with such waiver with respect to such services, product, discussions or acquisition agreement, in each case with the written consent of each of the Indemnitors as part of the consent of the Board.
7. In order to minimize potential conflicts of interest that may arise from multiple corporate affiliations, each officer and director hereby agrees that until the earliest of the Company’s initial Business Combination, liquidation or such time as such party ceases to be an officer or director of the Company, such person shall present to the Company for its consideration, prior to presentation to any other entity, any suitable Business Combination opportunities of which such person or companies or entities which such person manages or controls becomes aware, subject to any pre-existing fiduciary or contractual obligations such party might have as disclosed to the Company.
8. As applicable, the biographical information furnished to the Company by an officer or director of the Company is true and accurate in all material respects and does not omit any material information with respect to such person’s background. Each of the questionnaires furnished to the Company by an officer and director is true and accurate in all material respects.
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9. Each undersigned party represents and warrants that:
(a) such party is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
(b) such party has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and the undersigned is not currently a defendant in any such criminal proceeding; and
(c) such party has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
10. No Insider shall receive any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate the consummation of the Business Combination (regardless of the type of transaction that it is), other than the following:
(a) repayment of $175,000 in loans made to the Company by the Sponsor in connection with the preparation, filing and consummation of the Offering;
(b) payment of an aggregate of $10,000 per month to the Sponsor or an affiliate of the Sponsor, for office space, general office support, and receptionist, secretarial and administrative services;
(c) reimbursement for any out-of-pocket expenses related to identifying, investigating and consummating an initial Business Combination, provided that no proceeds held in the Trust Account may be applied to the payment of such expenses prior to the consummation of a Business Combination;
(d) repayment of loans, if any, and on such terms as to be determined by the Company from time to time after completion of this Offering, made by the Sponsor or an affiliate of the Sponsor or any Insider to finance working capital requirements of the Company; provided, that, if the Company does not consummate a Business Combination, a portion of the working capital held outside the Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such repayment; and
(e) Promptly following the consummation of the Company’s initial Business Combination, the Company shall reimburse the Warrant Purchasers for the fees and expenses incurred in connection with the Warrant Tender Offer and the Warrant Extension Tender Offer.
11. Each undersigned party acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations, and warranties set forth herein in proceeding with the Offering.
12. To the extent applicable, each undersigned party authorizes any employer, financial institution, or consumer credit reporting agency to release to the Underwriters and their legal representatives or agents (including any investigative search firm retained by the Underwriters) any information they may have about such undersigned party’s background and finances (“Information”), purely for the purposes of the Offering (and shall thereafter hold such information confidential). Neither the Underwriters nor its agents shall be violating such undersigned party’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
13. Each officer and director of the Company acknowledges and agrees that the Company will not consummate any Business Combination with any company with which an officer or director has had any discussions in such person’s capacity as an officer or director of the Company, formal or otherwise, prior to the consummation of the Offering, with respect to a Business Combination. Until the earlier of (i) the entry into a definitive agreement by the Company for a Business Combination; (ii) the liquidation of the Company; or (iii) the termination of such person as an officer or director of the Company, each officer and director of the Company agrees not to become affiliated as an officer or director of a blank check company similar to the Company.
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14. Each undersigned party acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with such undersigned party unless the Company obtains an opinion from an independent investment banking firm which is a member of FINRA that the Business Combination is fair to the Company’s stockholders from a financial perspective.
15. Each officer and director has full right and power, without violating any agreement to which such person is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and to serve as an officer of the Company or as a director on the board of directors of the Company, as applicable, and hereby consents to being named in the Prospectus as an officer and/or as a director of the Company, as applicable.
16. As used in this Letter Agreement, (i) “Business Combination” shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination, involving the Company and one or more businesses; (ii) “Founder Shares” shall mean the 2,156,250 shares of the Common Stock of the Company acquired by Sponsor for an aggregate purchase price of $25,000, or approximately $0.0116 per share, prior to the consummation of the Offering; (iii) “Public Stockholders” shall mean the holders of securities issued in the Offering; (iv) “Placement Shares” shall mean the shares of Common Stock sold as part of the Placement Units; (v) “Placement Warrants” shall mean the aggregate of 375,000 Warrants to purchase up to an aggregate of 375,000 shares of the Common Stock that are acquired as part of the Placement Units; (vi) “Placement Units” shall mean the aggregate of 375,000 Units of the Company (each Placement Unit consists of one Placement Warrant and one Placement Share) sold in a private placement simultaneous with the Offering for an aggregate purchase price of $3,750,000 to Sponsor, Joseph R. Wright and Cowen; (vii) “Trust Account” shall mean the trust account into which a portion of the net proceeds of the Offering and the Private Placement will be deposited; (viii) “Prospectus” shall mean the prospectus included in the registration statement filed by the Company in connection with the Offering, as supplemented or amended from time to time; (ix) “Private Placement” shall mean that certain private placement transactions occurring simultaneously with the closing of the Offering pursuant to which the Company has agreed to sell (A) 231,250 Placement Units to Chart Acquisition Group LLC, a Delaware limited liability company (the “Sponsor”), (B) 12,500 Placement Units to Joseph R. Wright and (C) 131,250 Placement Units to Cowen Overseas Investment LP, a Cayman Islands limited partnership (“Cowen”); and (x) “Tendered Warrants” shall mean the Public Warrants to be purchased by the Warrant Purchasers in connection with the Warrant Tender Offer and the Warrant Extension Tender Offer; and (xi) “Insiders” shall mean the Sponsor, any holder of the Placement Units, or its underlying securities or Founder Shares, any of their respective Permitted Transferees and each officer and director of the Company.
17. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by the parties hereto.
18. No party may assign either this Letter Agreement or any of party’s 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 each undersigned party and each of such undersigned party’s, as applicable, heirs, personal representatives, successors and assigns.
19. 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. Each Insider and Cowen (i) agrees that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York, in the State of New York, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waives any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.
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20. 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, electronic or facsimile transmission.
21. This Letter Agreement shall terminate on the earlier of (i) the later of the expiration of the Founder Lock-Up Period or Placement Unit Lock-Up Period, as applicable, or (ii) the liquidation of the Trust Account;provided, however, that this Letter Agreement shall earlier terminate in the event that the Offering is not consummated; and, provided, further, that paragraph 5 of this Letter Agreement shall survive any liquidation of the Company.
[Signature page follows]
Sincerely, | ||
COMPANY: CHART ACQUISITION CORP. a Delaware corporation
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Name: | Stephen Lasota | |
Title: | Chief Financial Officer |
THE CHART GROUP L.P., a Delaware limited partnership
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By: | ||
Name: | Christopher D. Brady | |
Title: | Manager |
Signature Page to Second Amended and Restated Letter Agreement
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THE KENDALL FAMILY INVESTMENTS | ||
By: | ||
Name: | ||
Title: |
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Joseph R. Wright | Governor Thomas Ridge | |
Senator Joseph Robert Kerrey | Timothy N. Teen | |
David Collier | Christopher Brady | |
Michael LaBarbera | Charlene Ryan | |
Matthew McCooe | Christopher Brady Jr. | |
Cole Van Nice | Peter A. Cohen | |
Young-Gak Yun | Geoffry Nattans | |
H. Whitney Wagner | Abdulwahab Al-Nakib | |
Joseph Boyle |
Khaled El-Marsafy (Fourth and Market) | |
Deirdre Kilmartin | Margaret Saracco | |
Manuel D. Medina | Kenneth J. Krieg |
Signature Page to Second Amended and Restated Letter Agreement
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Agreed to and accepted on the date first above written (which also constitutes written consent under Section 7.3 of the Underwriting Agreement):
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DEUTSCHE BANK SECURITIES INC. COWEN AND COMPANY, LLC
Acting severally on behalf of themselves and the several Underwriters named in Schedule A hereto
DEUTSCHE BANK SECURITIES INC.
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By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: | ||||
COWEN AND COMPANY, LLC | ||||
By: | ||||
Name: | ||||
Title: |
Signature Page to Second Amended and Restated Letter Agreement
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Exhibit (d)(7)
SECOND AMENDED AND RESTATED INVESTMENT MANAGEMENT TRUST AGREEMENT
This second amended and restated investment management trust agreement (“Agreement”) is made as of March [___], 2015, by and between Chart Acquisition Corp. (the “Company”), a Delaware corporation and Continental Stock Transfer & Trust Company (the “Trustee”) located at 17 Battery Place, New York, New York 10004. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Registration Statement.
WHEREAS, the Company’s initial registration statement, as amended, on Form S-1, No. 333-177280 (the “Registration Statement”), for its initial public offering of securities (the “IPO”) has been declared effective as of December 13, 2012 by the Securities and Exchange Commission (the “Commission”);
WHEREAS, Deutsche Bank Securities, Inc. and Cowen and Company, LLC are acting as the representatives of the underwriters in the IPO (the “Underwriters”) pursuant to an underwriting agreement (the “Underwriting Agreement”);
WHEREAS, simultaneously with the IPO, Chart Acquisition Group LLC, a Delaware limited liability company, purchased an aggregate of 231,250 placement units (“Placement Units”) for an aggregate purchase price of $2,312,500. Each Placement Unit consists of one share of Common Stock (as defined below) and one warrant to purchase one share of Common Stock;
WHEREAS, simultaneously with the IPO, Joseph Wright purchased an aggregate of 12,500 Placement Units for an aggregate purchase price of $125,000;
WHEREAS, simultaneously with the IPO, Cowen Overseas Investment LP, a Cayman Islands limited partnership and an affiliate of Cowen and Company, LLC, purchased an aggregate of 131,250 Placement Units for an aggregate purchase price of $1,312,500;
WHEREAS, as described in the Registration Statement, and in accordance with the Company’s Certificate of Incorporation, (as amended, the “Certificate of Incorporation”), $75,000,000 of the gross proceeds of the IPO and sale of the Placement Units were previously delivered to the Trustee to be deposited and held in a trust account (the “Trust Account”) for the benefit of the Company and the holders of the Company’s common stock, par value $.0001 per share (the “Common Stock”), issued in the IPO (the aggregate amount to be delivered to the Trustee will be referred to herein as the “Property,” the common stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,” and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”), pursuant to the investment management trust agreement as of December 13, 2012 (the “Original Agreement”);
WHEREAS, pursuant to certain provisions in the Company’s Certificate of Incorporation, the Public Stockholders may, regardless of how such stockholder votes in connection with the Company’s initial acquisition, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”), demand the Company redeem such Public Stockholder’s Common Stock into cash or redeem such Common Stock pursuant to a tender offer pursuant to the Rule 13e-4 and Regulation 14E of the Commission, as applicable and based upon the Company’s choice of proceeding under the proxy rules or tender offer rules, each as promulgated by the Commission (“Redemption Rights”);
WHEREAS, pursuant to the Underwriting Agreement, a portion of the Property equal to 3.125% of the gross proceeds of the IPO will be payable to the Underwriters in the event of consummation of a Business Combination (the “Deferred Fee”);
WHEREAS, pursuant to the Underwriting Agreement, the Deferred Fee is payable solely upon the consummation of the Company’s Business Combination and pursuant to the terms thereof;
WHEREAS, on September 5, 2014, the parties hereto amended and restated the Original Agreement in connection with the extension of the date before which the Company must complete a Business Combination from September 13, 2014 to March 13, 2015 (the “Current Agreement”);
WHEREAS, the Company has sought the approval of its Public Stockholders at a meeting of its stockholders (the “Stockholder Meeting”) to: (i) extend the date before which the Company must complete a business combination from March 13, 2015 (the “Current Termination Date”) to June 13, 2015 (the “Extended Termination Date”), and provide that the date for cessation of operations of the Company if the Company has not completed a business combination would similarly be extended, (ii) allow holders of the Company’s public shares to redeem their public shares for a pro rata portion of the funds available in the Trust Account, and authorize the Company and the Trustee to disburse such redemption payments (together with clause (i), the “Extension Amendment”) and (iii) amend and restate the Current Agreement to permit distributions from the trust account to pay public stockholders properly demanding redemption in connection with the Extension Amendment; and extend the date on which to commence liquidating the trust account in the event the Company has not consummated a business combination from the Current Termination Date to the Extended Termination Date (the “Trust Amendment”);
WHEREAS, holders of at least sixty-five percent (65%) of the Company’s outstanding shares of common stock approved the Trust Amendment and the Extension Amendment; and
WHEREAS, the parties desire to amend and restate the Current Agreement to, among other things, reflect amendments to the Current Agreement contemplated by the Trust Amendment.
NOW THEREFORE, 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 Trust Accounts which shall be established by the Trustee at JP Morgan Chase Bank, N.A. 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 written instruction of the Company, to invest and reinvest the Property in U.S. government treasury bills with a maturity of 180 days or less, and/or money market funds meeting certain conditions of Rule 2a-7 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 interest income arising from the Property, which shall become part of the “Property,” as such term is used herein;
(e) Notify the Company 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 reasonably indemnified by the Company and instructed by the Company to do so, so long as the Company shall have advanced funds sufficient to pay the Trustee’s expenses incident thereto.
(h) Render to the Company, and to such other person as the Company may instruct, monthly written statements of the activities of, and amounts in, the Trust Account, reflecting all receipts and disbursements of the Trust Account; and
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(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 hereto, signed on behalf of the Company by an executive officer and complete the liquidation of the Trust Account and distribute the Property in the Trust Account only as directed by the Company; provided, however, that in the event that a Termination Letter has not been received by the Trustee by 11:59 P.M. New York City time on the 30-month anniversary of the date of the final prospectus relating to the IPO, the Trust Account shall be liquidated as soon as practicable thereafter in accordance with the procedures set forth in the Termination Letter attached as Exhibit B hereto and distributed to the Public Stockholders of record at the close of trading (4:00 P.M. New York City time) on such 30 month anniversary date. For the purposes of clarity, any transmission of such Termination Letter electronically, whether by facsimile, electronic mail (e-mail), PDF or otherwise, shall constitute an original of such termination Letter hereunder.
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 by wire transfer from the income collected on the Property the amount necessary to cover any tax obligation owed by the Company.
(b) The Company may withdraw funds from the Trust Account for working capital purposes by delivery of Exhibit C to the Trustee. The distributions referred to herein shall be made only from income collected on the Property.
(c) The Trustee shall, only after and promptly after receipt of, and only in accordance with, the terms of a letter, in a form substantially similar to that attached hereto as Exhibit E, signed on behalf of the Company by an executive officer and in accordance with the written instruction of the Company, disburse to the Public Stockholders of record as of the record date for the Stockholder Meeting pursuant to which the Trust Amendment and the Extension Amendment were approved who (A) elected to exercise their redemption rights in connection with the Extension Amendment and the Trust Amendment and (B) tendered their stock certificate(s) in accordance with the provisions set forth in the proxy statement for the Stockholder Meeting, the amount indicated by the Company as required to pay such Public Stockholders. For the purposes of clarity, any transmission of such letter electronically, whether by facsimile, electronic mail (e-mail), PDF or otherwise, shall constitute an original of such letter hereunder.
(d) In no event shall the payments authorized by Sections 2(a) and 2(b) cause the amount in the Trust Account to fall below the amount initially deposited into the Trust Account. Except as provided in Sections 2(a), 2(b) and 2(c) above, no other distributions from the Trust Account shall be permitted except in accordance with Section 1(i) hereof.
(e) The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to such funds, and the Trustee has no responsibility to look beyond said request.
3. Agreements and Covenants of the Company. The Company hereby agrees and covenants to:
(a) Give all instructions to the Trustee hereunder in writing or the electronic equivalent, signed by the Company’s President, Chief Executive Officer or Chief Financial Officer, and as specified in Section 1(i). In addition, except with respect to its duties under Sections 1(i), 2(a), 2(b) and 2(c) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal, electronic 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 Section 5, hold the Trustee harmless and indemnify the Trustee from and against, any and all expenses, including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by the trustee hereunder or 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 section, 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;
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(c) Pay the Trustee the fees set forth on Schedule A hereto;
(d) In connection with the vote, if any, of the Company’s stockholders 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 stockholder votes verifying the vote of the Company’s stockholders 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) Promptly after the Deferred Fee shall become determinable on a final basis, to provide the Trustee notice in writing (with a copy to the Underwriters) of the total amount of the Deferred Fee.
4. Limitations of Liability. The Trustee shall have no responsibility or liability to:
(a) 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;
(b) Take any action with respect to the Property, other than as directed in Sections 1 and 2 hereof and the Trustee shall have no liability to any party except for liability arising out of its own gross negligence or willful misconduct;
(c) Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of the Property unless and until it shall have received written instructions from the Company given as provided herein to do so and the Company shall have advanced to it funds sufficient to pay any expenses incident thereto;
(d) Change the investment of any Property, other than in compliance with Section 1(c);
(e) Refund any depreciation in principal of any Property;
(f) 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;
(g) 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, judgment, instruction, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee, which counsel may be Company counsel), 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;
(h) 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
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(i) Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to income and activities relating to the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company (including but not limited to income tax obligations), it being expressly understood that as set forth in Section 2(a), if there is any income or other tax obligation relating to the Trust Account or the Property in the Trust Account, as determined from time to time by the Company and regardless of whether such tax is payable by the Company or the Trust, at the written instruction of the Company, the Trustee shall make funds available in cash from the Property in the Trust Account an amount specified by the Company as owing to the applicable taxing authority, which amount shall be paid directly to the Company by electronic funds transfer, account debit or other method of payment, and the Company shall forward such payment to the taxing authority;
(j) Pay or report any taxes on behalf of the Trust Account other than pursuant to Section 2(a).
(k) Verify calculations, qualify or otherwise approve Company requests for distributions pursuant to Sections 1(i), 2(a), 2(b) or 2(c).
5. No Right of Set-Off. The Trustee waives any right of set-off or any right, title, interest or claim of any kind that the Trustee may have against the Property held in the Trust Account. In the event the Trustee has a claim against the Company under this Agreement, including, without limitation, under Section 3(b), the Trustee will pursue such claim solely against the Company and not against the Property held in the Trust Account.
6. Termination. This Agreement shall terminate as follows:
(a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor trustee during which time the Trustee shall 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 the Company does not locate a successor trustee within ninety (90) 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 Section 1(i) hereof, and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 3(b).
7. Miscellaneous.
(a) The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained access to such information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon 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) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. It 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 Sections 1(i), 2(a), 2(b), 2(c) and 2(d) (which may not be modified, amended or deleted without the affirmative vote of at least 65% of the then outstanding shares of Common Stock; provided that no such amendment will affect any Public Stockholder who has otherwise either (i) indicated his election to redeem his shares of Common Stock in connection with a stockholder vote sought to amend this Agreement or (ii) not consented to any amendment to this Agreement to extend to the time he would be entitled to a return of his pro rata amount in the Trust Account), this Agreement or any provision hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto. As to any claim, cross-claim or counterclaim in any way relating to this Agreement, each party waives the right to trial by jury and the right to set-off as a defense. The Trustee may request an opinion from Company counsel as to the legality of any proposed amendment as a condition to its executing such amendment.
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(d) The parties hereto consent to the personal 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) Unless otherwise specified herein, 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 or delivery confirmation requested), by hand delivery or by electronic or facsimile transmission:
if to the Trustee, to:
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Frank A. DiPaolo, CFO
Fax No.: (212) 509-5150
if to the Company, to:
Chart Acquisition Corp.
c/o The Chart Group, L.P.
555 5th Avenue, 19th Floor,
New York, NY 10017
Attention: Michael LaBarbera
Fax No.: (212) 350-8299
with a copy to (which shall not constitute notice):
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Douglas S. Ellenoff, Esq.
Fax No: (212)-370-7889
(e) This Agreement may not be assigned by the Trustee without the prior consent of the Company.
(f) 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 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.
(g) This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto
(h) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute valid and sufficient delivery thereof.
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(i) The Company has also retained the Trustee to serve as its share transfer agent and warrant agent and shall pay the fees set forth in Schedule A for such services. Additionally, the Trustee has agreed to provide all services, including, but not limited to: the mailing of proxy or tender documents to registered holders, all wires in connection with the Business Combination (including the exercise of Redemption Rights) and maintaining the official record of the exercise of Redemption Rights and stockholder voting (if applicable).
[Signature page follows]
IN WITNESS WHEREOF, the parties have duly executed this Second Amended and Restated 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: | Chief Financial and Trust Officer | |
CHART ACQUISITION CORP. | ||
By: | ||
Name: | Michael LaBarbera | |
Title: | Chief Financial Officer |
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SCHEDULE A
Fee Item | Time and method of payment | Amount (1) |
Set-up fee | Consummation of IPO by wire transfer of funds | $3,000 |
Annual trustee fee | Upon execution of the IMTA and at each anniversary | $10,000.00 |
All services in connection with a Business Combination and/or all services in connection with liquidation of Trust Account if no Business Combination. | Upon final liquidation of the Trust Account but, upon liquidation if no Business Combination, only from interest earned or from the Company by wire transfer of funds | Prevailing rates after consultation with the issuer and its counsel at the time of combination. |
(1) Any amounts owed by the Company are subject in their entirety to the provisions of Section 5 of this Agreement.
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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 Di Paolo
Re: Trust Account No. [ ] - Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement between Chart Acquisition Corp. (“Company”) and Continental Stock Transfer & Trust Company, dated as of [ ], 2012 (“Trust Agreement”), this is to advise you that the Company has entered into an agreement with [ ] (the “Target Businesses”) to consummate a Business Combination with the Target Businesses on or before [ ] (the “Consummation Date”). This letter shall serve as the 48 hour notice required with respect to the Business Combination. Capitalized words used herein and not otherwise defined shall have the meanings ascribed to them 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 entire proceeds to the above referenced Trust checking account at [ ] to the effect that, on the Consummation Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in the Trust checking account awaiting distribution, the Company will not earn any interest or dividends.
On or before the Consummation Date: (i) counsel for the Company shall deliver to you (a) an affidavit which verifies the vote of the Company’s stockholders in connection with the Business Combination1 and (b) written notification that the Business Combination has been consummated or will, concurrently with your transfer of funds to the accounts as directed by the Company, be consummated (ii) the Company shall deliver to you written instructions with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel’s letter and the Instruction Letter in accordance with the terms of the Instruction Letter. In the event certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company or be distributed immediately and the penalty incurred. Upon the distribution of all the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated.
________________
1 Only if stockholder vote held
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In the event the Business Combination is not consummated by 11:59 p.m. on the Consummation Date and we have not notified you of a new Consummation Date, then upon the Trustee's receipt of the Company's written instruction, the funds held in the Trust checking account shall be reinvested as provided for by the Trust Agreement as soon as practicable thereafter.
Very truly yours,
CHART ACQUISITION CORP.
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. |
Cowen and Company, LLC |
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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 Di Paolo
Re: Trust Account No. [ ] - Termination Letter
Gentlemen:
Pursuant to Section 1(i) of the Investment Management Trust Agreement between Chart Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of ________, 2012 (the “Trust Agreement”), this is to advise you that the Company has been unable to effect a Business Combination with a Target Company within the 30-month anniversary of the date of the final prospectus relating to the IPO.
In accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate the Trust Account on [ ] and to transfer the total proceeds to the Trust checking account at [ ] for distribution to the stockholders. The Company has selected [ ] as the record date for the purpose of determining the stockholders entitled to receive their pro rata share of the liquidation proceeds. You agree to be the paying agent of record and in your separate capacity as paying agent to distribute said funds directly to the Company’s stockholders (other than with respect to the initial, or insider shares) in accordance with the terms of the Trust Agreement, the Certificate of Incorporation of the Company and the fees set forth on Schedule A to the Trust Agreement. Upon the distribution of all of the funds in the Trust Account, your obligations under the Trust Agreement shall be terminated.
Very truly yours,
CHART ACQUISITION CORP.
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. |
Cowen and Company, LLC |
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EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer
& Trust Company
17 Battery Place, 8th Floor
New York, New York 10004
Attn: Steven Nelson and Frank DiPaolo
Re: Trust Account No. [ ]
Gentlemen:
Pursuant to Section 2(a) or 2(b) of the Investment Management Trust Agreement between Chart Acquisition Corp. (“Company”) and Continental Stock Transfer & Trust Company, dated as of ___________, 2012 (“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 the tax obligations as set forth on the attached tax return or tax statement] or [for working capital purposes]. 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]
CHART ACQUISITION CORP. | ||
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. (“DB”) |
Cowen and Company, LLC |
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EXHIBIT D
AUTHORIZED INDIVIDUAL(S) FOR TELEPHONE CALL BACK | AUTHORIZED TELEPHONE NUMBER(S) | |
Company: | ||
Chart Acquisition Corp.
555 5th Avenue, 19th Floor,
New York, NY 10017
Attention: Michael LaBarbera |
(212) 350-8275 | |
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Douglas S. Ellenoff, Esq. |
(212) 370-1300 | |
Trustee: | ||
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Frank Di Paolo, CFO |
(212) 845-3270 |
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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 Di Paolo
Re: Trust Account No. [ ]
Gentlemen:
Pursuant to Section 2(c) of the Investment Management Trust Agreement between Chart Acquisition Corp. (the “Company”) and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of December 13, 2012 (the “Trust Agreement”), this is to advise you that in connection with the Extension Amendment and the Trust Amendment and in accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate $_____ of the Trust Account on March __, 2015 and to transfer $_____ of the proceeds of the Trust to the Trust checking account at [ ] for distribution to the shareholders that have requested redemption of their shares in connection with the Extension Amendment and the Trust Amendment. It is acknowledged and agreed that while such funds are on deposit in the Trust checking account awaiting distribution, the Company will not earn any interest or dividends on such funds.
On or before the date for liquidation referenced above the Company shall deliver to you (a) an affidavit which verifies the vote of the Company’s stockholders in connection with the Extension Amendment and the Trust Amendment, (b) written notification that the Extension Amendment and the Trust Amendment are effective, and (c) written instructions with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You agree to be the paying agent of record and in your separate capacity as paying agent to distribute said funds on the date for liquidation referenced above directly to the Company’s stockholders (other than with respect to the initial, or insider shares) in accordance with the Instruction Letter, terms of the Trust Agreement, the Certificate of Incorporation of the Company and the fees set forth on Schedule A to the Trust Agreement. In the event certain deposits held in the Trust Account may not be liquidated on such 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 or be distributed immediately and the penalty incurred.
[Signature page follows]
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Very truly yours,
CHART ACQUISITION CORP.
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. | |
Cowen and Company, LLC |
15
Exhibit (d)(16)
SECOND AMENDED AND RESTATED ESCROW AGREEMENT
SECOND AMENDED AND RESTATED ESCROW AGREEMENT, dated as of March [__], 2015 (“Agreement”), by and among Chart Acquisition Group, LLC (the “Representative”), Joseph Wright (“Wright”), and Cowen Investments LLLC (“Cowen Investments,” together with Wright and the Representative, the “Warrant Purchasers”), Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”) and Deutsche Bank Securities, Inc. (“DB”) and Cowen and Company, LLC (“Cowen”), with DB and Cowen acting as representatives of the several Underwriters (as defined below).
WHEREAS, the Warrant Purchasers agreed to establish an escrow account (the “Escrow Account”) to deposit certain funds with the Escrow Agent for the benefit of the holders of warrants (the “Beneficiaries”) issued by Chart Acquisition Corporation (the “Company”) in its initial public offering (the “IPO”) being underwritten by the underwriters in connection thereof, including DB and Cowen (the “Underwriters”), in an amount of TWO MILLION TWO HUNDRED FIFTY THOUSAND and 00/100 ($2,250,000.00) U.S. Dollars (the “Escrow Asset”), which amount shall be distributed, from time to time in accordance with the procedures set forth below;
WHEREAS, the Warrant Purchasers have collectively committed to offer to purchase up to 3,750,000 (subject to reduction as described herein) of the Company’s issued and outstanding warrants offered in the IPO (the “Warrants”) at a purchase price of $0.60 per Warrant in a proposed tender offer in connection with a business combination as described in the Registration Statement. The Beneficiaries that have tendered Warrants purchased by the Warrant Purchasers in such tender offer are hereinafter referred to as the “Tendering Beneficiaries.”);
WHEREAS, the parties hereto entered into the Escrow Agreement on December 19, 2012 (the “Original Agreement”) in connection with the IPO, as described in the Company’s Registration Statement on Form S-1, File No. 333-177280 (“Registration Statement”), to govern the distribution of the Escrow Asset;
WHEREAS, the requisite number of stockholders of the Company have approved an amendment (the “Extension Amendment”) to the Company’s second amended and restated certificate of incorporation to, among other things, extend the date before which the Company must complete a business combination from March 13, 2015 (the “Original Termination Date”) to June 13, 2015 (the “Extended Termination Date”);
WHEREAS, on September 12, 2014, the Warrant Purchasers purchased an aggregate of 7,700 of the Warrants at a purchase price of $0.30 per Warrant in a tender offer (the “Initial Warrant Extension Tender Offer”);
WHEREAS, following the Initial Warrant Extension Tender Offer TWO MILLION TWO HUNDRED FORTY SEVEN THOUSAND SIX HUNDRED NINETY and 00/100 ($2,247,690) U.S. Dollars remain in the Escrow Account;
WHEREAS, the parties hereto entered into the Amended and Restated Escrow Agreement on September 12, 2014 (the “Current Agreement”) to amend and to restate the Original Agreement in its entirety;
WHEREAS, the Warrant Purchasers have collectively committed to offer to purchase up to 7,492,300 of the Company’s Warrants at a purchase price of $0.30 per Warrant in a proposed tender offer to close on or about the Original Termination Date (the “Second Warrant Extension Tender Offer”) in connection with the Extension Amendment. The Beneficiaries that have tendered Warrants purchased by the Warrant Purchasers in such Second Warrant Extension Tender Offer are hereinafter referred to as the “Extension Tendering Beneficiaries”; and
WHEREAS, the parties hereto desire to amend and restate the Current Agreement to, among other things, provide that the Company’s failure to complete a business combination by the Extended Termination Date (rather than the Original Termination Date) will, in the circumstances set forth herein, constitute a Termination Event hereunder and to permit the Warrant Purchasers to use the Escrow Asset to fund the Second Warrant Extension Tender Offer.
IT IS AGREED:
1. Appointment of Escrow Agent and Representative.
1.1. The Warrant Purchasers 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.
1.2. The Warrant Purchasers hereby appoint the Representative as their representative to act on behalf of the Warrant Purchasers as their duly authorized agent with respect to all matters governed by this Agreement and the Representative hereby accepts such appointment and agrees to act in accordance with and subject to the terms hereof.
2. Deposit of Escrow Asset. 24 hours prior to the effective date of the Registration Statement (the “Effective Date”), the Warrant Purchasers shall deliver to the Escrow Agent the Escrow Asset in the amounts set forth in Schedule 1 hereto. The funds shall be delivered by wire transfer to a segregated non-interest bearing bank account established by the Escrow Agent at JP Morgan Chase Bank, NA maintained by the Escrow Agent, which thereafter shall be disbursed only in accordance with the terms and conditions of this Agreement and at a brokerage institution selected by the trustee that is reasonably satisfactory to the Company;
The Escrow Asset will be invested by the Escrow Agent only when and as directed in writing by Representative in a form substantially similar to Exhibit D attached hereto. in United States treasuries with a maturity of 180 days or less or in money market funds that invest solely in United States treasury securities.
3. Disbursement and Reduction of the Escrow Asset.
3.1. The Escrow Agent shall hold the Escrow Asset during the period (the “Escrow Period” commencing on the date hereof and ending upon the earlier of (each a “Termination Event”) (i) the Company’s consummation of an initial business combination as described in the Registration Statement (“Business Combination”) or (ii) the Company’s failure to consummate a Business Combination within 30 months from the date of the final prospectus. Upon completion of the Escrow Period, the Escrow Agent shall promptly commence the distribution of the Escrow Asset (excluding any interest or dividends earned thereon) to the Beneficiaries upon receipt of, and only in accordance with, the terms of a joint letter (the “Direction Letter”) in accordance with Sections 3.3 or 3.4, as applicable, hereof. Notwithstanding the foregoing, during the Escrow Period, the Escrow Agent may distribute a certain portion of the Escrow Asset pursuant to Sections 3.2 or 3.5 herein.
3.2. During the Escrow Period, upon written request from the Representative, which may be given from time to time pursuant to a letter (the “Earnings Reduction Letter”) in a form substantially similar to that attached hereto as Exhibit A, the Escrow Agent shall reduce the amount of the Escrow Asset and distribute to the Warrant Purchasers by wire transfer the income collected on the Escrow Asset.
3.3. If the Termination Event is the Company’s consummation of a Business Combination, Escrow Agent shall distribute the Escrow Asset pro-rata to the Tendering Beneficiaries upon Escrow Agent’s receipt of a Direction Letter in a form substantially similar to that attached hereto as Exhibit B, stating that that the Company has consummated its initial business combination, as set forth in the Registration Statement and a concurrent tender offer has also been consummated for up to 3,750,000 (provided, that such number shall be reduced at a ratio of one for every two Warrants (rounded to the nearest number) properly tendered and not withdrawn in the Initial Warrant Extension Tender Offer or the Second Warrant Extension Tender Offer) of the Company’s Warrants issued (but not private warrants), such that each Tendering Beneficiary will receive an amount equal to $0.60 per Warrant for each Warrant validly tendered and not properly withdrawn on a pro rata basis as applicable. The Escrow Agent will distribute all validly tendered and acquired Warrants to the Warrant Purchasers on a pro rata basis.
3.4. If the Termination Event is the Company’s failure to consummate a Business Combination, Escrow Agent shall distribute the Escrow Asset pro-rata to the Beneficiaries upon Escrow Agent’s receipt of a Direction Letter in a form substantially similar to that attached hereto as Exhibit C-1, stating that the Company did not consummate a proposed business combination within 30 months from the date of the final prospectus, and the Warrant Purchasers must distribute the Escrow Asset such that each Beneficiary receives a pro rata amount of the Escrow Asset per Warrant for each Warrant then held by such Beneficiary
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3.5. If the Company has not consummated a Business Combination within 27 months from the date of the final prospectus, the Escrow Agent shall distribute a portion of the Escrow Asset to the Extension Tendering Beneficiaries upon Escrow Agent’s receipt of a Direction Letter in a form substantially similar to that attached hereto as Exhibit C-2, stating that the Second Warrant Extension Tender Offer has been consummated and authorizing distribution of a portion of the Escrow Asset to the Extension Tendering Beneficiaries based on the number of Warrants tendered by each Extension Tendering Beneficiary and not properly withdrawn, such that each Extension Tendering Beneficiary is entitled to receive an amount equal to $0.30 per Warrant for each Warrant validly tendered and not properly withdrawn. The Escrow Agent will distribute all validly tendered and acquired Warrants to the Warrant Purchasers on a pro rata basis.
4. Concerning the Escrow Agent.
4.1. 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.
4.2. Indemnification. The parties hereto agree to jointly and severally indemnify and hold the Escrow Agent harmless 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 Asset 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 Asset or it may deposit the Escrow Asset with the clerk of any appropriate court or it may retain the Escrow Asset 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 Asset are to be disbursed and delivered. The provisions of this Section 4.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 4.5 or 4.6 below.
4.3. Compensation. The Escrow Agent shall be entitled to compensation in accordance with Schedule A attached hereto from the Warrant Purchasers for all services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from the Warrant Purchasers 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. The parties further agree to promptly pay the Escrow Agent’s monthly invoices when delivered by regular mail, or by other electronic means to the following address: Chart Acquisition Group LLC, 555 Fifth Avenue, 19th Floor, New York, New York 10017, Attn: Christopher D. Brady.
4.4. Further Assurances. From time to time on and after the date hereof, the Warrant Purchasers 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.
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4.5. 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 jointly by DB and Cowen, the Escrow Asset 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 Asset with any court it reasonably deems appropriate.
4.6. 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 4.5.
4.7. 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. Miscellaneous.
5.1. Governing Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
5.2. Third Party Beneficiaries. Each of the Warrant Purchasers hereby acknowledges that the Beneficiaries and Extending Tender Beneficiaries are third party beneficiaries of this Agreement.
5.3. 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.
5.4. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.
5.5. 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.
5.6. 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 Warrant Purchasers, to the Representative:
Chart Acquisition Group LLC
555 Fifth Avenue, 19th Floor
New York, New York 10017
Attn: Christopher D. Brady
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and if to the Escrow Agent, to:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven G. Nelson, Chairman
And if to DB, to:
Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005
And if to Cowen, to:
Cowen and Company, LLC
599 Lexington Avenue
New York, NY 10022
Attn: Head of Equity Capital Markets
A copy of any notice sent hereunder shall be sent to:
DLA Piper LLP (US)
1251 Avenue of the Americas, 27th Floor
New York, New York 10020-1104
Attn: Jack Kantrowitz, Esq.
and:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attention: Douglas S. Ellenoff
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.
[Signature Page Follows]
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WITNESS the execution of this Agreement as of the date first above written.
WARRANT PURCHASERS: | ||
CHART ACQUISITION GROUP, LLC | ||
(as a Warrant Purchaser and its capacity as Representative) | ||
By: | ||
Name: | ||
Title: | ||
Name: Joseph Wright | ||
COWEN INVESTMENTS LLC | ||
By: | ||
Name: | ||
Title: | ||
ESCROW AGENT: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
By: | ||
Name: | ||
Title: | ||
DEUTSCHE BANK SECURITIES INC. | ||
By: | ||
Name: | ||
Title: | ||
COWEN AND COMPANY, LLC | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Second Amended and Restated Escrow Agreement]
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SCHEDULE A
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SCHEDULE 1
WARRANT PURCHASER | PERCENTAGE | AMOUNT |
Chart Acquisition Group LLC | 61.7% | $ [_____] |
Joseph R. Wright | 3.3% | $ [_____] |
Cowen Investments LLC | 35.0% | $ [_____] |
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EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer
& Trust Company
17 Battery Place, 8th Floor
New York, New York 10004
Attn: Steven Nelson and Frank DiPaolo
Re: Escrow Account No. [ ] - Earnings Reduction Letter
Gentlemen:
Pursuant to Section 3.2 of the Second Amended and Restated Escrow Agreement by and among Chart Acquisition Group, LLC (the “Representative”), Joseph Wright, and Cowen Investments LLC (“Cowen Investments,” and together with Joseph Wright and the Representative, the “Warrant Purchasers”), Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”) and Deutsche Bank Securities, Inc. and Cowen and Company, LLC, dated as of , 2015 (the “Escrow Agreement”), the Representative hereby requests that you deliver to it $ of the interest income earned on the Escrow Asset as of the date hereof as follows.
[LIST WARRANT PURCHASERS AND AMOUNTS]
In accordance with the terms of the Escrow Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Warrant Purchasers’ operating accounts at:
[WIRE INSTRUCTION INFORMATION]
Chart Acquisition Group, LLC | ||
By: | ||
Name: |
||
Title: |
cc: | Deutsche Bank Securities, Inc. | |
Cowen and Company, LLC |
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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 Di Paolo
Re: Escrow Account No. [ ] - Direction Letter
Gentlemen:
Pursuant to Section 3.3 of the Second Amended and Restated Escrow Agreement between Chart Acquisition Group, LLC (the “Representative”), Joseph Wright, and Cowen Investments LLC (“Cowen Investments,” and together with Joseph Wright and the Representative, the “Warrant Purchasers”), Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”) and Deutsche Bank Securities, Inc. and Cowen and Company, LLC, dated as of , 2015 (the “Escrow Agreement”), this is to advise you that the Company has consummated a business combination with [ ] (the “Target Businesses”) on [ ] (the “Consummation Date”). Capitalized words used herein and not otherwise defined shall have the meanings ascribed to them in the Escrow Agreement.
Pursuant to Section 3.3 of the Escrow Agreement, you are hereby directed to distribute the Escrow Asset (less any interest earned thereon) pro-rata to the Tendering Beneficiaries based on the number of Warrants tendered by each Tendering Beneficiary and not properly withdrawn because the Company has consummated its initial business combination, as set forth in the Registration Statement and a concurrent tender offer has also been consummated for up to 3,746,150 (provided, that such number shall be reduced at a ratio of one for every two Warrants (rounded to the nearest number) properly tendered and not withdrawn in the Second Warrant Extension Tender Offer) of the Company’s Warrants (but not private warrants) issued, such that each Tendering Beneficiary is entitled to receive an amount equal to $0.60 per Warrant for each Warrant validly tendered and not properly withdrawn (pro rated as applicable). The balance of the Escrow Asset, if any, should be returned to the Warrant Purchasers’ operating accounts at:
[WIRE INSTRUCTION INFORMATION]
Upon the distribution of all Escrow Asset pursuant to the terms hereof, the Escrow Agreement shall be terminated.
Very truly yours, | ||
Chart Acquisition Group, LLC | ||
By: | ||
Name: | ||
Title: | ||
Deutsche Bank Securities, Inc. | ||
By: | ||
Name: | ||
Title: | ||
Cowen and Company, LLC | ||
By: | ||
Name: | ||
Title: |
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EXHIBIT C-1
[Letterhead of Company]
[Insert date]
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven Nelson and Frank Di Paolo
Re: Escrow Account No. [ ] - Direction Letter
Gentlemen:
Reference is made to the Second Amended and Restated Escrow Agreement between Chart Acquisition Group, LLC (the “Representative”), Joseph Wright, and Cowen Investments LLC (“Cowen Investments,” and together with Joseph Wright and the Representative, the “Warrant Purchasers”), Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”) and Deutsche Bank Securities, Inc. and Cowen and Company, LLC, dated as of , 2015 (the “Escrow Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Escrow Agreement. Pursuant to Section 3.4 of the Escrow Agreement, this is to advise you that the Company did not consummate a proposed business combination within 30 months from the initial closing of effective date of the Registration Statement, and the Warrant Purchasers must distribute the Escrow Asset such that each Beneficiary receives a pro rated amount of the Escrow Asset per Warrant for each Warrant then held by such Beneficiary.
In accordance with the terms of the Escrow Agreement, you are hereby directed to distribute the Escrow Asset on [ ] to the warrantholders. [ ] has been selected as the “record” date for the purpose of determining the warrantholders entitled to receive their pro rata share of the Escrow Asset (less interest earned thereon). You agree to be the paying agent of record and in your separate capacity as paying agent to distribute said funds directly to the Company’s warrantholders (other than with respect to the private warrants) in accordance with the terms of the Escrow Agreement. Upon the distribution of all of the funds comprising the Escrow Asset, your obligations under the Escrow Agreement shall be terminated.
Very truly yours, | ||
Chart Acquisition Group, LLC | ||
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. | |
Cowen and Company, LLC |
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EXHIBIT C-2
[Letterhead of Company]
[Insert date]
Continental Stock Transfer
& Trust Company
17 Battery Place
New York, New York 10004
Attn: Steven Nelson and Frank Di Paolo
Re: Escrow Account No. [ ] - Direction Letter
Gentlemen:
Reference is made to the Second Amended and Restated Escrow Agreement between Chart Acquisition Group, LLC (the “Representative”), Joseph Wright, and Cowen Investments LLC (“Cowen Investments,” and together with Joseph Wright and the Representative, the “Warrant Purchasers”), Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”) and Deutsche Bank Securities, Inc. and Cowen and Company, LLC, dated as of , 2015 (the “Escrow Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Escrow Agreement. Pursuant to Section 3.5 of the Escrow Agreement, this is to advise you that the Second Warrant Extension Tender Offer has been consummated. In accordance with the terms of the Escrow Agreement, you are hereby directed to distribute [ ] of the Escrow Asset to the Extension Tendering Beneficiaries based on the number of Warrants tendered by each Extension Tendering Beneficiary and not properly withdrawn and, such that each Extension Tendering Beneficiary is entitled to receive an amount equal to $0.30 per Warrant for each Warrant validly tendered and not properly withdrawn. You agree to be the paying agent of record and in your separate capacity as paying agent to distribute said funds directly to the Company’s warrantholders who are Extension Tendering Beneficiaries in accordance with the terms of the Escrow Agreement. If this distribution consists of all of the funds comprising the Escrow Asset, your obligations under the Escrow Agreement shall be terminated.
Very truly yours, | ||
Chart Acquisition Group, LLC | ||
By: | ||
Name: | ||
Title: |
cc: | Deutsche Bank Securities, Inc. | |
Cowen and Company, LLC |
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Exhibit D
October 11, 2012
Continental Stock Transfer & Trust Company
17 Battery Place, 8th Floor
New York, New York 10017
Attention: Frank A. Di Paolo, Chief Financial Officer
Dear Frank,
Regarding account _____________ established with Morgan Stanley in the name of Continental Stock and Transfer A/A/F Chart Acquisition Group, LLC, please issue instructions to invest the escrow deposit as follows:
Investment parameters:
[$______ of the Escrow Asset will be invested only in United States treasuries with a maturity of 180 days or less and the remaining $______ may be invested in either United States treasuries with a maturity of 180 days or less or in money market funds that invest solely in United States treasuries.]
SELECT OPTION
☐ Option 1:
Please purchase at market a $______ US T-bill maturing in 180 days and, with the remaining funds $______ , purchase an additional US T-bill also maturing in 180 days.
Or
☐ Option 2:
Please purchase at market a $______ T-bill maturing in 180 days and, with the remaining funds ($______), purchase Morgan Stanley 100% US Treasury Securities Money Market Fund.
Or
☐ Option 3:
Please purchase $______, of Morgan Stanley 100% US Treasury Securities Money Market Fund.
Sincerely, | ||
Chart Acquisition Group, LLC | ||
By: |
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