Delaware |
6770 |
46-5723951 |
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(State
or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
David Alan Miller, Esq. Jeffrey M. Gallant, Esq. Graubard Miller The Chrysler Building 405 Lexington Avenue New York, New York 10174 (212) 818-8800 (212) 818-8881 Facsimile |
Douglas S. Ellenoff, Esq. Stuart Neuhauser, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, NY 10105 (212) 370-1300 (212) 370-7889 Facsimile |
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Large
accelerated filer o |
Accelerated filer o |
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Non-accelerated filer þ (Do not check if a smaller reporting company) |
Smaller reporting company o |
Title of each Class of Security being registered |
Proposed Maximum Aggregate Offering Price(1) |
Amount of Registration Fee |
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Units, each
consisting of one share of common stock, par value $0.0001, and one Redeemable Warrant to purchase three fourths (3/4) of a share of common
stock(2)(4) |
$ | 115,000,000 | $ | 14,812 | ||||||
Common Stock
included as part of the Units(2)(4) |
| | ||||||||
Redeemable
Warrants included as part of the Units(2)(4) |
| | ||||||||
Total
|
$ | 115,000,000 | $ | 14,812 | (3) |
(1) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). |
(2) |
Includes Units and shares of Common Stock and Warrants underlying such Units which may be issued on exercise of a 45-day option granted to the Underwriters to cover over-allotments, if any. |
(3) |
The filing fee has previously been paid. |
(4) |
Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, dividends or similar transactions. |
PRELIMINARY
PROSPECTUS |
SUBJECT TO COMPLETION, DECEMBER 31, 2014 |
Public Offering Price |
Underwriting Discount and Commissions(1) |
Proceeds, Before Expenses, to Us |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Per unit
|
$ | 10.00 | $ | 0.5325 | $ | 9.4675 | ||||||||
Total
|
$ | 100,000,000 | $ | 5,325,000 | $ | 94,675,000 |
(1) |
Includes up to $0.30 per unit, or up to $3,000,000, as a deferred underwriting fee to be placed in the trust account described below. These funds will be released only on completion of our initial business combination, as described in this prospectus. Please see the section titled Underwriting for further information relating to the underwriting arrangements agreed to between us and the underwriters in this offering. |
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F-1 |
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we, us or our company refers to Harmony Merger Corp.; |
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initial stockholders refer to all of our stockholders immediately prior to the date of this prospectus, including all of our officers and directors to the extent they hold such shares; |
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insider shares refer to the 3,026,250 shares of common stock held by our initial stockholders prior to this offering, including up to an aggregate of 382,500 shares subject to forfeiture to the extent that the underwriters over-allotment option is not exercised in full or in part, after giving effect to a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock effectuated in November 2014; |
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management team or our management refer to our officers and directors; |
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private units refer to the units we are selling privately to our initial stockholders upon consummation of this offering and references to private shares refer to the shares of common stock included within the private units; |
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the term public stockholders means the holders of the shares of common stock which are being sold as part of the units in this public offering, or public shares (whether they are purchased in the public offering or in the aftermarket), including any of our initial stockholders to the extent that they purchase such shares; and |
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the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. |
common stock commencing on the later of (1) two business days after we file a
Form 8-K disclosing all material information relating to our initial business combination, and (2) 60 days after the termination of the
restricted period in connection with this offering under Regulation M of the Exchange Act, and ending on the record date for the
shareholder meeting at which such initial business combination is to be approved, or earlier in certain circumstances as described in the limit
order agreement, which we refer to in this prospectus as the buyback period. These limit orders will require Mr. Rosenfeld to purchase any
shares of our common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount
held in our trust account as reported in such Form 8-K, until the earlier of (1) the expiration of the buyback period or (2) the date such
purchases reach $500,000 in total. We will provide at least 20 business days between the beginning of the buyback period and the record date for
the shareholder meeting for such initial business combination. It is intended that the purchases will satisfy the conditions of Rule
10b-18(b) under the Exchange Act to the extent possible and the brokers purchase obligation will otherwise be subject to applicable
law, including Regulation M under the Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain
circumstances.
Securities
offered |
10,000,000 units, at $10.00 per unit, each unit consisting of one share of common stock and one redeemable warrant, each warrant to purchase
three-fourths (3/4) of a share of common stock at a price of $11.50 per full share subject to adjustment as described in this
prospectus. |
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We
structured each warrant to be exercisable for three-fourths of one share of our common stock, as compared to warrants issued by some other similar
companies which are exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of a business combination
as compared to units that each contain a warrant to purchase one whole share. We believe this will make us a more attractive merger partner for target
businesses compared to companies whose unit structure contains a warrant to purchase more than three-fourths of a share of common stock. However, no
fractional shares will be issued upon exercise of the warrants. Accordingly, unless you acquire at least four warrants, you will not be able to receive
shares upon exercise of your warrants. This unit structure may cause our units to be worth less than if they included a warrant to purchase one full
share. |
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Listing of our
securities and proposed symbols |
We
anticipate the units, and the common stock and warrants once they begin separate trading, will be listed on Nasdaq under the symbols HRMNU,
HRMN and HRMNW, respectively. |
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We
have agreed with Cantor Fitzgerald & Co. that each of the shares of common stock and warrants may trade separately ten business days following the
earlier to occur of the expiration of the underwriters over-allotment option, its exercise in full or the announcement by the underwriters of
their intention not to exercise all or any remaining portion of the over-allotment option. In no event will Cantor Fitzgerald & Co. allow separate
trading of the common stock and warrants until we file an audited balance sheet reflecting our receipt of the gross proceeds of this
offering. |
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Once
the common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the
component pieces. Holders will need to have their brokers contact our transfer agent in order to separate the units into separately trading common
stock and warrants. |
We
will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly after the consummation of this offering, which is
anticipated to take place three business days from the date the units commence trading. The audited balance sheet will reflect our receipt of the
proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this prospectus. If the over-allotment
option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K or a new Form 8-K to provide updated financial
information to reflect the exercise of the over-allotment option. We will also include in the Form 8-K, or amendment thereto, or in a subsequent Form
8-K, information relating to the separate trading of the common stock and warrants. |
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Common
Stock: |
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Number
outstanding before this offering |
3,026,250 shares1 |
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Number to be
outstanding after this offering and sale of private units |
13,218,750 shares2 |
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Redeemable
Warrants: |
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Number
outstanding before this offering |
0
warrants |
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Number to be
outstanding after this offering and sale of private units |
10,575,000 warrants |
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Exercisability |
Each
warrant is exercisable for three-fourths of one share of common stock. Because the warrants may only be exercised for whole numbers of shares, unless
you acquire at least four warrants, you will not be able to receive shares upon exercise of your warrants. |
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Exercise
price |
$11.50 per whole share. Except as described elsewhere in this prospectus, no warrants will be exercisable for cash unless we have an
effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus
relating to such shares of common stock. It is our current intention to have an effective and current registration statement covering the shares of
common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock in effect promptly following
consummation of an initial business combination. Notwithstanding the foregoing, if a registration statement covering the shares of common stock
issuable upon exercise of the warrants is not effective within 90 days following the consummation of our initial business combination, warrant holders
may, until such time as there is an effective registration statement and during any period |
1 |
This number includes an aggregate of up to 382,500 shares of common stock held by our initial stockholders that are subject to forfeiture if the over-allotment option is not exercised by the underwriters in full. |
2 |
Assumes the over-allotment option has not been exercised and an aggregate of 382,500 shares of common stock held by our initial stockholders have been forfeited. |
when
we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from
registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering the warrants for that number of 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 exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The
fair market value shall mean the average reported last sale price of the shares of common stock for the 10 trading days ending on the day
prior to the date of exercise. If an exemption from registration is not available, holders will not be able to exercise their warrants on a cashless
basis. |
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Exercise
period |
The
warrants will become exercisable on the later of 30 days after the completion of an initial business combination and 12 months from the date of this
prospectus. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination,
or earlier upon redemption. |
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Redemption |
We
may redeem the outstanding warrants (excluding the warrants underlying the private units so long as they are held by the initial
purchasers or their permitted transferees), in whole and not in part, at a price of $0.01 per warrant: |
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at any time while the warrants are exercisable, |
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upon a minimum of 30 days prior written notice of redemption, |
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if, and only if, the last sales price of our shares of common stock equals or exceeds $21.00 per share for any 20 trading
days within a 30 trading day period ending three business days before we send the notice of redemption, and |
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if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying
such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of
redemption. |
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If
the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the
scheduled redemption date. However, the price of the shares of common stock may fall below the $21.00 trigger price as well as the $11.50 warrant
exercise price after the redemption notice is issued. |
The
redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial
exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price
declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the
warrants. |
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If we
call the warrants for redemption as described above, we will have the option to require all holders that wish to exercise warrants to do so on a
cashless basis. In such event, each holder would pay the exercise price by surrendering the warrants for that number of 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 exercise price of the warrants and the fair market value (defined below) by (y) the fair market value. The
fair market value shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading
day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether we will exercise our option to require all holders
to exercise their warrants on a cashless basis will depend on a variety of factors including the price of our common stock at the time the
warrants are called for redemption, our cash needs at such time and concerns regarding dilutive share issuances. |
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Amendment |
The
warrant agreement governing the warrants 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. Additionally, the warrants may be amended, by written consent or vote, of the holders of 65% of the then
outstanding warrants (including the warrants underlying the private units and any other warrants we may issue after the date of this prospectus)
in order to make any change that adversely affects the interests of the warrant holders. |
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Offering
proceeds to be held in trust |
$96,250,000 of the net proceeds of this offering (or $111,250,000 if the over-allotment option is exercised in full), plus the $5,750,000 (or
$6,050,000 if the over-allotment option is exercised in full) we will receive from the sale of the private units, for an aggregate of $102,000,000 (or
an aggregate of $117,300,000 if the over-allotment option is exercised in full), or $10.20 per unit sold to the public in this offering will be placed
in a trust account in the United States maintained by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be
signed on the date of this prospectus. The remaining $750,000 of net |
proceeds of this offering will not be held in the trust account. |
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Except as set forth below, the proceeds in the trust account will not be released until the earlier of the completion of an initial business
combination within the required time period or our entry into liquidation if we have not completed a business combination in the required time period.
Therefore, unless and until an initial business combination is consummated, the proceeds held in the trust account will not be available for our use
for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business and the
negotiation of an agreement to acquire a target business. |
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Notwithstanding the foregoing, there can be released to us from the trust account any interest earned on the funds in the trust account that
we need to pay our income or other tax obligations. With this exception, expenses incurred by us may be paid prior to a business combination only from
the net proceeds of this offering not held in the trust account (estimated to initially be $750,000); provided, however, that in order to meet our
working capital needs following the consummation of this offering if the funds not held in the trust account are insufficient, our initial
stockholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever
amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon
consummation of our initial business combination, without interest, or, at the lenders discretion, up to $500,000 of the notes may be converted
upon consummation of our business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the
holders being issued 50,000 shares of common stock and 50,000 warrants to purchase 37,500 shares if $500,000 of notes were so converted). Our initial
stockholders have approved the issuance of the units (and underlying securities) upon conversion of such notes, to the extent the holder wishes to so
convert them at the time of the consummation of our initial business combination. If we do not complete a business combination, the loans would not be
repaid. |
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Limited
payments to insiders |
Prior
to the consummation of a business combination, there will be no fees, reimbursements or other cash payments paid to our initial stockholders, officers,
directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of a business combination (regardless
of the type of transaction that it is) other than: |
repayment at the closing of this offering of a $50,000 non-interest loan made by Eric S. Rosenfeld, our chairman and chief
executive officer; |
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payment of $12,500 per month to Crescendo Advisors II, LLC, an entity controlled by Mr. Rosenfeld, for office space and
related services; and |
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reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as
identifying and investigating possible business targets and business combinations. |
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There
is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available
proceeds not deposited in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. Our
audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of our management team, or our or
their respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved by our Board of
Directors, with any interested director abstaining from such review and approval. |
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Stockholder
approval of initial business combination |
In
connection with any proposed initial business combination, we will seek stockholder approval of such initial business combination at a meeting called
for such purpose at which stockholders may seek to have their shares converted, regardless of whether they vote for or against the proposed business
combination, for a pro rata share of the aggregate amount then on deposit in the trust account less any taxes then due but not yet paid (such
conversion amount initially anticipated to be $10.20 per share). However, the conversion price could be reduced by claims of creditors or if we
increase the size of this offering, each as described in more detail in this prospectus. |
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We
will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of
the outstanding shares of common stock voted are voted in favor of the business combination. We have determined not to consummate any business
combination unless we have net tangible assets of at least $5,000,001 upon such consummation in order to avoid being subject to Rule 419 promulgated
under the Securities Act. |
Our
initial stockholders have agreed (i) to vote their insider shares, private shares and any public shares purchased in or after this offering in favor of
any proposed business combination and (ii) not to convert any insider shares or private shares in connection with a stockholder vote to approve a
proposed initial business combination. As a result, we would need only 3,390,626 of the 10,000,000 public shares sold in this offering to be voted in
favor of a transaction in order to have such transaction approved (assuming the over-allotment option is not exercised). However, one of our initial
stockholders has indicated an intention to purchase 720,000 units in this offering. If it purchased such shares, we would only need 2,670,626
additional public shares to vote in favor of the transaction in order to have it approved. Additionally, Eric S. Rosenfeld, our Chief Executive
Officer, has agreed to enter into an agreement in accordance with the guidelines of Rule 10b5-1 of the Exchange Act, pursuant to which he will
place limit orders for an aggregate of up to $500,000 of our common stock as described in more detail in this prospectus. Any buyback
shares purchased by Mr. Rosenfeld pursuant to this arrangement will be voted in favor of the proposed business combination, thereby further
reducing the number of public shares needed to be voted in favor of a business combination to have it approved. Moreover, if a significant
number of stockholders vote, or indicate an intention to vote, against a proposed business combination, our officers, directors, initial stockholders
or their affiliates could purchase shares in the open market or in private transactions in order to influence the vote. There is no limit on the amount
of shares that may be purchased by the initial stockholders. Any purchases would be made in compliance with federal securities laws, including the fact
that all material information will be made public prior to such purchase, and no purchases would be made if such purchases would violate Section
9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a companys stock. |
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Conversion
rights |
In
connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will have the right,
regardless of whether he is voting for or against such proposed business combination, to have his shares converted into a pro rata share of the trust
account upon consummation of the business combination. However, we will consummate our initial business combination only if we have net tangible assets
of at least $5,000,001 upon such consummation. As a result, we will not be able to consummate an initial business combination if the
value |
of
the shares being sought to be converted reduces our net tangible value below $5,000,001. Additionally, in connection with any proposed business
combination, a target business could impose a working capital closing condition or require us to have a minimum amount of funds available from the
trust account upon consummation of such initial business combination. As a result, this may limit the number of shares that we can have converted and
still consummate such business combination. |
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As
indicated above, our initial stockholders have agreed not to convert any insider shares or private shares for a pro rata portion of the funds in the
trust account in connection with a stockholder vote to approve a proposed initial business combination. Additionally, each initial stockholder other
than NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P. and Covalent Capital Partners Master Fund, L.P. has agreed not to convert any public shares
(including in the case of Mr. Rosenfeld, any buyback shares he purchases) they hold for a pro rata portion of the funds in the trust account in
connection with a stockholder vote to approve a proposed initial business combination. NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P. and
Covalent Capital Partners Master Fund, L.P. would be allowed to convert any public shares they purchase in this offering or in the aftermarket for a
pro rata portion of the funds in the trust account in connection with a stockholder vote to approve a proposed initial business
combination. |
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Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert
or as a group (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or
more of the shares of common stock sold in this offering. Accordingly, all shares purchased by a holder in excess of 20% of the shares sold in this
offering will not be converted for cash. We believe this restriction will prevent an individual stockholder or group from accumulating
large blocks of shares before the vote held to approve a proposed business combination and attempt to use the redemption right as a means to force us
or our management to purchase its shares at a significant premium to the then current market price. By restricting a stockholders ability to
convert more than 20% of the shares of common stock sold in this offering, we believe we have limited the ability of a small group of stockholders to
unreasonably attempt to block a transaction which is favored by our other public stockholders. |
We
may also require public stockholders, whether they are a record holder or hold their shares in street name, to either tender their
certificates to our transfer agent at any time through the vote on the business combination or to deliver their shares to the transfer agent
electronically using Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) System, at the holders option, in order to have their
shares converted. The requirement for physical or electronic delivery prior to the meeting ensures that a holders election to convert his shares
is irrevocable once the business combination is approved. There is a nominal cost associated with this tendering process and the act of certificating
the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the
broker whether or not to pass this cost on to the converting holder. |
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If
the business combination is not consummated for any reason, public stockholders will not be entitled to have their shares converted. Public
stockholders who convert their shares will continue to have the right to exercise any warrants they may hold if the business combination is
consummated. |
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Liquidation if
no business combination |
If we
are unable to complete our initial business combination within 24 months from the consummation of this offering, we will (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 100% of the
outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining holders of common stock and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii)
above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. |
|||||
In
connection with our redemption of 100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive
a full pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not
previously released to us to pay our taxes payable on such funds (subject in each case to our obligations under Delaware law to provide for claims of
creditors). Holders of warrants will receive no proceeds in connection with the liquidation with respect to such warrants, which will expire
worthless. |
We
may not have funds sufficient to pay or provide for all creditors claims. Although we will seek to have all third parties (including any vendors
or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements with us waiving any
right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such
agreements. There is also no guarantee that the third parties would not challenge the enforceability of these waivers and bring claims against the
trust account for monies owed them. |
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The
holders of the insider shares and private units will not participate in any redemption distribution with respect to their insider shares, private
shares or warrants underlying the private units. |
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If we
are unable to conclude our initial business combination and we expend all of the net proceeds of this offering not deposited in the trust account,
without taking into account any interest earned on the trust account, we expect that the initial per-share redemption price will be approximately
$10.20. The proceeds deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of
our stockholders. In addition, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that is not dismissed,
the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the
claims of third parties with priority over the claims of our stockholders. Therefore, the actual per-share redemption price may be less than $10.20.
Although the anticipated redemption price could be reduced if we were to increase the size of this offering as described in more detail in this
prospectus, we have agreed with Cantor Fitzgerald & Co., as representative for the underwriters, that we will not increase the size of this
offering unless (i) the initial stockholders agree to purchase additional private units in the private placement, or (ii) the underwriters defer a
larger portion of the underwriting discount, such that at least $10.20 per share sold to the public in this offering is held in
trust. |
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We
will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Eric S.
Rosenfeld, our Chairman and Chief Executive Officer, has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no
more than approximately $15,000) and has agreed not to seek repayment for such expenses. |
Insider
Indemnification |
Eric
S. Rosenfeld has agreed that he will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a transaction agreement, reduces the amount of funds in the trust account to
below $10.20 per public share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account
and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the
Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Rosenfeld will not be
responsible to the extent of any liability for such third party claims. Furthermore, he will not be personally liable to our public stockholders and
instead will only have liability to us. We have not independently verified whether Mr. Rosenfeld has sufficient funds to satisfy his indemnity
obligations and, therefore, Mr. Rosenfeld may not be able to satisfy those obligations. We have not asked Mr. Rosenfeld to reserve for such
eventuality. We believe the likelihood of Mr. Rosenfeld having to indemnify the trust account is limited because we will endeavor to have all vendors
and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to
monies held in the trust account. Nevertheless, if we liquidate, the per-share distribution from the trust account could be less than approximately
$10.20 due to claims or potential claims of creditors. |
May 31, 2014 |
September 30, 2014 |
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Actual |
Actual |
As Adjusted |
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Balance
Sheet Data: |
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Working
capital (deficiency) |
$ | 2,007 | $ | (74,457 | ) | $ | 99,773,905 | (2) | |||||||
Total assets
|
97,485 | 104,705 | 102,773,905 | (3) | |||||||||||
Total
liabilities |
72,978 | 80,800 | 3,000,000 | (4) | |||||||||||
Value of
common stock subject to possible conversion |
0 | 0 | 93,999,989 | (5) | |||||||||||
Stockholders equity |
24,507 | 23,905 | 5,773,916 |
May 31, 2014 |
September 30, 2014 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
Actual |
As Adjusted |
|||||||||||||
Income
Statement Data: |
|||||||||||||||
Revenue
|
$ | 0 | $ | 0 | $ | 0 | |||||||||
Net loss
|
(493 | ) | (1,095 | ) | (1,095 | ) | |||||||||
Basic and
diluted net loss per share |
(0.00 | ) | (0.00 | ) | (0.00 | ) |
(1) |
Includes the proceeds to be received from this offering as the offering is being made on a firm commitment basis and therefore the underwriters are obligated to purchase the units on the date of this prospectus. Also includes the $5,750,000 we will receive from the sale of the private units. |
(2) |
The as adjusted working capital is derived by adding total stockholders equity and the value of the common stock subject to possible conversion less up to $3,000,000 of deferred underwriting commissions. |
(3) |
The as adjusted total assets is derived by adding total stockholders equity and the value of common stock subject to possible conversion. |
(4) |
The as adjusted liabilities represents up to $3,000,000 of deferred underwriting commissions. |
(5) |
The as adjusted value of common stock subject to possible conversion is derived by taking 9,215,685 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of $10.20. |
|
may significantly reduce the equity interest of investors in this offering; |
|
may subordinate the rights of holders of common stock if we issue preferred stock with rights senior to those afforded to our common stock; |
|
may cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
|
may adversely affect prevailing market prices for our shares of common stock. |
|
default and foreclosure on our assets if our profits after a business combination are insufficient to repay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and |
|
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding. |
|
a limited availability of market quotations for our securities; |
|
reduced liquidity with respect to our securities; |
|
a determination that our shares of common stock are penny stock which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock; |
|
a limited amount of news and analyst coverage for our company; and |
|
a decreased ability to issue additional securities or obtain additional financing in the future. |
|
solely dependent upon the performance of a single business, or |
|
dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
|
restrictions on the nature of our investments; and |
|
restrictions on the issuance of securities. |
|
registration as an investment company; |
|
adoption of a specific form of corporate structure; and |
|
reporting, record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations. |
|
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
|
our capital structure; |
|
an assessment of our management and their experience in identifying operating companies; and |
|
general conditions of the securities markets at the time of the offering. |
|
rules and regulations or currency redemption or corporate withholding taxes on individuals; |
|
tariffs and trade barriers; |
|
regulations related to customs and import/export matters; |
|
longer payment cycles; |
|
inflation; |
|
economic policies and market conditions; |
|
unexpected changes in regulatory requirements; |
|
challenges in managing and staffing international operations; |
|
tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
|
currency fluctuations; |
|
challenges in collecting accounts receivable; |
|
cultural and language differences; |
|
protection of intellectual property; and |
|
employment regulations. |
|
ability to complete our initial business combination; |
|
limited operating history; |
|
success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
|
potential ability to obtain additional financing to complete a business combination; |
|
pool of prospective target businesses; |
|
the ability of our officers and directors to generate a number of potential investment opportunities; |
|
potential change in control if we acquire one or more target businesses for shares; |
|
our public securities potential liquidity and trading; |
|
regulatory or operational risks associated with acquiring a target business; |
|
use of proceeds not held in the trust account; |
|
financial performance following this offering; or |
|
listing or delisting of our securities from Nasdaq or the ability to have our securities listed on Nasdaq following our initial business combination. |
Without Over-Allotment Option |
Over-Allotment Option Exercised |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Gross
proceeds |
||||||||||
From offering
|
$ | 100,000,000 | $ | 115,000,000 | ||||||
From private
placement |
5,750,000 | 6,050,000 | ||||||||
Total gross
proceeds |
105,750,000 | 121,050,000 | ||||||||
Offering
expenses(1) |
||||||||||
Underwriting
discount (2.325% of gross proceeds from offering) |
2,325,000 | (2) | 2,325,000 | (2) | ||||||
Financial
advisor fee |
175,000 | 175,000 | ||||||||
Legal fees
and expenses |
250,000 | 250,000 | ||||||||
Nasdaq
listing fee |
75,000 | 75,000 | ||||||||
Printing and
engraving expenses |
45,000 | 45,000 | ||||||||
Accounting
fees and expenses |
40,000 | 40,000 | ||||||||
FINRA filing
fee |
18,000 | 18,000 | ||||||||
SEC
registration fee |
15,000 | 15,000 | ||||||||
Miscellaneous
expenses |
57,000 | 57,000 | ||||||||
Total
offering expenses |
3,000,000 | 3,000,000 | ||||||||
Net
proceeds |
||||||||||
Held in trust
|
102,000,000 | 117,300,000 | ||||||||
Not held in
trust |
750,000 | 750,000 | ||||||||
Total net
proceeds |
$ | 102,750,000 | $ | 118,050,000 | ||||||
Use of net
proceeds not held in trust and amounts available from interest income earned on the trust account(3)(4) |
||||||||||
Legal,
accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring and
negotiation of a business combination |
$ | 200,000 | (23.5%) | |||||||
Due diligence
of prospective target businesses by officers, directors and initial stockholders |
50,000 | (5.8%) | ||||||||
Legal and
accounting fees relating to SEC reporting obligations |
100,000 | (11.8%) | ||||||||
Payment of
administrative fee to Crescendo Advisors II, LLC ($12,500 per month for up to 24 months) |
300,000 | (35.3%) | ||||||||
Corporate and
franchise taxes |
100,000 | (11.8%) | ||||||||
Working
capital to cover miscellaneous expenses, D&O insurance, general corporate purposes, Nasdaq continued listing fees, liquidation obligations and
reserves |
100,000 | (11.8%) | ||||||||
Total
|
$ | 850,000 | (100.0%) |
(1) |
A portion of the offering expenses, including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds we received from Eric S. Rosenfeld described below. These funds will be repaid out of the proceeds of this offering available to us. |
(2) |
The underwriting discount of 2.325% is payable at the closing of the offering (excluding proceeds received from the exercise of the over-allotment option, on which we will not pay any underwriting discount). Additionally, a deferred underwriting fee of up to 3.0% is payable upon consummation of our initial business combination and will be held in the trust account until consummation of such business combination. No discounts or commissions will be paid with respect to the purchase of the private units. |
(3) |
The amount of proceeds not held in trust will remain constant at $750,000 even if the over-allotment is exercised. In addition, interest income earned on the amounts held in the trust account will be available to us to pay for our income and other tax obligations. We estimate the interest earned on the trust account will be approximately $100,000 over a 24-month period assuming an interest rate of approximately 0.05% per year. |
(4) |
These are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of that business combination. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would be deducted from our excess working capital. |
Public
offering price |
$ | 10.00 | ||||||||
Net tangible
book value before this offering |
$ | (0.03 | ) | |||||||
Increase
attributable to new investors and private sales |
1.47 | |||||||||
Pro forma net
tangible book value after this offering |
1.44 | |||||||||
Dilution to
new investors |
$ | 8.56 | ||||||||
Percentage of
dilution to new investors |
85.6 | % |
Shares Purchased |
Total Consideration |
Average Price per Share |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number |
Percentage |
Amount |
Percentage |
||||||||||||||||||||
Initial
stockholders |
3,218,750(1) | 24.3 | % | $ | 5,775,000 | 5.5 | % | $ | 1.79 | ||||||||||||||
New investors
|
10,000,000 | 75.7 | % | 100,000,000 | 94.5 | % | $ | 10.00 | |||||||||||||||
13,218,750 | 100.0 | % | $ | 105,775,000 | 100.0 | % |
(1) |
Assumes the over-allotment option has not been exercised and an aggregate of 382,500 shares of common stock held by our initial stockholders have been forfeited as a result thereof. Includes 575,000 private shares issued simultaneously with the consummation of this offering. |
Numerator: |
||||||
Net tangible
book value before the offering |
$ | (74,457 | ) | |||
Net proceeds
from this offering and private placement of private units |
102,750,000 | |||||
Offering
costs excluded from net tangible book value before this offering |
98,362 | |||||
Less:
Deferred underwriters commission |
(3,000,000 | ) | ||||
Less:
Proceeds held in trust subject to possible conversion |
(93,999,989 | ) | ||||
$ | 5,773,916 | |||||
Denominator: |
||||||
Shares of
common stock outstanding prior to this offering |
2,643,750 | (1) | ||||
Shares of
common stock included in the units offered |
10,000,000 | |||||
Shares of
common stock to be sold in private placement |
575,000 | |||||
Less: Shares
subject to possible conversion |
(9,215,685 | ) | ||||
4,003,065 |
(1) |
Assumes the over-allotment option has not been exercised and an aggregate of 382,500 shares of common stock held by our initial stockholders have been forfeited as a result thereof. |
September 30, 2014(1) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
As Adjusted(2) |
||||||||||
Note payable
to related party(3) |
$ | 50,000 | $ | | |||||||
Deferred
underwriting commissions |
| 3,000,000 | |||||||||
Shares of
common stock, par value $0.0001 per share, -0- and 9,215,685 shares which are subject to possible conversion |
| 93,999,989 | (5) | ||||||||
Stockholders equity: |
|||||||||||
Shares of
preferred stock, par value $0.0001 per share, 1,000,000 shares authorized; none issued or outstanding |
| | |||||||||
Shares of
common stock, par value $0.0001 per share, 16,000,000 shares authorized(6); 3,026,250 shares issued and outstanding, actual; 4,003,065
shares issued and outstanding(4) (excluding 9,215,685 shares subject to possible conversion), as adjusted |
303 | 400 | |||||||||
Additional
paid-in capital |
24,697 | 5,774,611 | |||||||||
Accumulated
deficit |
(1,095 | ) | (1,095 | ) | |||||||
Total
stockholders equity: |
$ | 23,905 | $ | 5,773,916 | |||||||
Total
capitalization |
$ | 73,905 | $ | 102,773,905 |
(1) |
September 30, 2014 balances reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock effectuated in November 2014. |
(2) |
Includes the proceeds to be received from this offering as the offering is being made on a firm commitment basis and therefore the underwriters are obligated to purchase the units on the date of this prospectus. Also includes the $5,750,000 we will receive from the sale of the private units. |
(3) |
Note payable to related party is a promissory note issued in the aggregate amount of $50,000 to Eric S. Rosenfeld. The note is non-interest bearing and is payable on the earliest to occur of (i) May 31, 2015, (ii) the consummation of this offering or (iii) the date on which we determine not to proceed with this offering. |
(4) |
Assumes the over-allotment option has not been exercised and an aggregate of 382,500 shares of common stock held by our initial stockholders have been forfeited as a result thereof. |
(5) |
Derived by taking 9,215,685 shares of common stock which may be converted, representing the maximum number of shares that may be converted while maintaining at least $5,000,001 in net tangible assets after the offering, multiplied by a conversion price of approximately $10.20. |
(6) |
Our certificate of incorporation will be amended prior to the closing of this offering to authorize the issuance of up to 25,000,000 shares of common stock. |
|
may significantly reduce the equity interest of our stockholders; |
|
may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; |
|
will likely cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and |
|
may adversely affect prevailing market prices for our securities. |
|
default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations; |
|
acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant; |
|
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and |
|
our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding. |
|
$200,000 of expenses for the search for target businesses and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating of a business combination; |
|
$50,000 of expenses for the due diligence and investigation of a target business by our officers, directors and initial stockholders; |
|
$100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations; |
|
$300,000 for the payment of the administrative fee to Crescendo Advisors II, LLC (of $12,500 per month for up to 24 months); |
|
$100,000 for corporate and franchise taxes; and |
|
$100,000 for general working capital that will be used for miscellaneous expenses, Nasdaq continued listing fees liquidation obligations and reserves, including director and officer liability insurance premiums. |
|
staffing for financial, accounting and external reporting areas, including segregation of duties; |
|
reconciliation of accounts; |
|
proper recording of expenses and liabilities in the period to which they relate; |
|
evidence of internal review and approval of accounting transactions; |
|
documentation of processes, assumptions and conclusions underlying significant estimates; and |
|
documentation of accounting policies and procedures. |
|
financial condition and results of operation; |
|
growth potential; |
|
brand recognition and potential; |
|
return on equity or invested capital; |
|
market capitalization or enterprise value; |
|
experience and skill of management and availability of additional personnel; |
|
capital requirements; |
|
competitive position; |
|
barriers to entry; |
|
stage of development of its products, processes or services; |
|
existing distribution and potential for expansion; |
|
degree of current or potential market acceptance of the products, processes or services; |
|
proprietary aspects of products and the extent of intellectual property or other protection for its products, processes, formulas or services; |
|
impact of regulation on the business; |
|
regulatory environment of the industry; |
|
costs associated with effecting the business combination; |
|
industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and |
|
macro competitive dynamics in the industry within which the company competes. |
|
subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination, and |
|
result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services. |
|
prior to the consummation of our initial business combination, we shall seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, subject to the limitations described herein; |
|
we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination; |
|
if our initial business combination is not consummated within 24 months of the consummation of this offering, then our existence will terminate and we will distribute all amounts in the trust account and any net assets remaining outside the trust account to all of our public holders of shares of common stock; |
|
we may not consummate any other business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination; and |
|
prior to our initial business combination, we may not issue (i) any shares of common stock or any securities convertible into common stock, or (ii) any securities that participate in any manner in the proceeds of the trust account, or that vote as a class with the common stock sold in this offering on our initial business combination. |
|
our obligation to seek stockholder approval of a business combination may delay the completion of a transaction; |
|
our obligation to convert public shares held by our public stockholders (including NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P. and Covalent Capital Partners Master Fund, L.P. but not our other initial stockholders) may reduce the resources available to us for a business combination; |
|
Nasdaq may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination; |
|
our outstanding warrants, and the potential future dilution they represent; |
|
our obligation to pay a deferred underwriting fee of up to 3.0% of the proceeds of this offering; |
|
our obligation to either repay or issue private units upon conversion of up to $500,000 of working capital loans that may be made to us by our initial stockholders, officers, directors or their affiliates; |
|
our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial stockholders, officers, directors or their affiliates upon conversion of working capital loans; and |
|
the impact on the target business assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination. |
Terms of the Offering |
Terms Under a Rule 419 Offering |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Escrow of
offering proceeds |
$102,000,000 of the net offering proceeds and proceeds from the sale of the private units will be deposited into an account in the United
States maintained by Continental Stock Transfer & Trust Company, acting as trustee. |
$87,750,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or
in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the
account. |
||||||||
Investment
of net proceeds |
The
$102,000,000 of the net offering proceeds and proceeds from the sale of the private units held in trust will only be invested in United States
government treasury bills, bonds or notes with a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule
2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in United States government treasuries. |
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940
or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. |
||||||||
Limitation
on fair value or net assets of target business |
The
initial target business that we acquire must have a fair market value equal to at least 80% of the balance in our trust account at the time of the
execution of a definitive agreement for our initial business combination. |
We
would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the
maximum offering proceeds. |
||||||||
Trading of
securities issued |
The
units may commence trading on or promptly after the date of this prospectus. The shares of common stock and warrants comprising the units will begin to
trade separately ten business days following the earlier to occur of the expiration of the underwriters over-allotment option, its exercise in
full or the announcement by the underwriters of its intention not to exercise all or any remaining portion of the over-allotment option, provided we
have filed with the SEC a Current Report on Form 8-K, which includes an audited balance sheet reflecting our receipt of the proceeds of this
offering. |
No
trading of the units or the underlying securities would be permitted until the completion of a business combination. During this period, the securities
would be held in the escrow or trust account. |
||||||||
Exercise of
the warrants |
The
warrants cannot be exercised until the completion of a business combination and, accordingly, will be exercised only after the trust account has been
terminated and distributed. |
The
warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise
would be deposited in the escrow or trust account. |
Terms of the Offering |
Terms Under a Rule 419 Offering | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Election to
remain an investor |
We
will give our stockholders the opportunity to vote on the business combination. We will send each stockholder a proxy statement containing information
required by the SEC. Under Delaware law and our bylaws, we must provide at least 10 days advance notice of any meeting of stockholders. Accordingly,
this is the minimum amount of time we would need to provide holders to determine whether to exercise their rights to convert their shares into cash or
to remain an investor in our company. |
A
prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the
company, in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective
amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment. If the company has
not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow
account would automatically be returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited
funds in the escrow account must be returned to all investors and none of the securities will be issued. |
||||||||
Business
combination deadline |
Pursuant to our amended and restated certificate of incorporation, if we do not complete an initial business combination within 24 months from
the consummation of this offering, it will trigger our automatic winding up, dissolution and liquidation. |
If an
acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow
account would be returned to investors. |
||||||||
Interest
earned on the funds in the trust account |
There
can be released to us, from time to time, any interest earned on the funds in the trust account that we may need to pay our tax obligations. The
remaining interest earned on the funds in the trust account will not be released until the earlier of the completion of a business combination and our
entry into liquidation upon failure to effect a business combination within the allotted time. |
All
interest earned on the funds in the trust account will be held in trust for the benefit of public stockholders until the earlier of the completion of a
business combination and our liquidation upon failure to effect a business combination within the allotted time. |
||||||||
Release of
funds |
Except for interest earned on the funds held in the trust account that may be released to us to pay our income or other tax obligations, the
proceeds held in the trust account will not be released until the earlier of the completion of a business combination (in which case, the funds
released to us would be net of the funds that would be paid to converting stockholders by Continental Stock Transfer & Trust Company, as trustee of
the trust account) and the liquidation of our trust account upon failure to effect a business combination within the allotted time. |
The
proceeds held in the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a
business combination within the allotted time. |
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Eric S.
Rosenfeld |
57 | Chairman of the Board and Chief Executive Officer |
||||||||
David D. Sgro
|
38 | Chief Operating Officer and Director |
||||||||
Thomas
Kobylarz |
37 | Chief Financial Officer |
||||||||
John P.
Schauerman |
57 | Director |
||||||||
Adam J. Semler
|
50 | Director |
||||||||
Leonard B.
Schlemm |
61 | Director |
|
reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K; |
|
discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; |
|
discussing with management major risk assessment and risk management policies; |
|
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; |
|
reviewing and approving all related-party transactions; |
|
inquiring and discussing with management our compliance with applicable laws and regulations; |
|
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; |
|
appointing or replacing the independent auditor; |
|
determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; |
|
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and |
|
approving reimbursement of expenses incurred by our management team in identifying potential target businesses. |
|
should have demonstrated notable or significant achievements in business, education or public service; |
|
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and |
|
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders. |
|
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officers compensation, evaluating our Chief Executive Officers performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officers based on such evaluation; |
|
reviewing and approving the compensation of all of our other executive officers; |
|
reviewing our executive compensation policies and plans; |
|
implementing and administering our incentive compensation equity-based remuneration plans; |
|
assisting management in complying with our proxy statement and annual report disclosure requirements; |
|
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
|
if required, producing a report on executive compensation to be included in our annual proxy statement; and |
|
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
|
None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. |
|
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining to which entity a particular business opportunity should be presented. |
|
Our officers and directors are now, and may in the future become, affiliated with entities, including other blank check companies, engaged in business activities identical to those intended to be conducted by our company. |
|
The insider shares owned by our officers and directors will be released from escrow only if a business combination is successfully completed and subject to certain other limitations. Additionally, our officers and directors will not receive distributions from the trust account with respect to any of their insider shares if we do not complete a business combination. Furthermore, the initial stockholders have agreed that the private units (and underlying securities) will not be sold or transferred by them until after we have completed our initial business combination. In addition, our officers and directors may loan funds to us after this offering and may be owed reimbursement for expenses incurred in connection with certain activities on our behalf which would only be repaid if we complete an initial business combination. For the foregoing reasons, the personal and financial interests of our directors and executive officers may influence their motivation in identifying and selecting a target business, completing a business combination in a timely manner and securing the release of their shares. |
|
the corporation could financially undertake the opportunity; |
|
the opportunity is within the corporations line of business; and |
|
it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
Name of Affiliated Company |
Name of Individual(s) |
Priority/Preference relative to Harmony Merger Corp. |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
CPI
Aerostructures, Inc. |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for CPI Aerostructures to CPI Aerostructures prior to presenting
them to us. CPI Aerostructures is engaged in the contract production of structural aircraft parts principally for the United States Air Force and other
branches of the U.S. armed forces. |
||||||||
Absolute
Software |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for Absolute Software to Absolute Software provides persistent
endpoint security and management for computers, laptops, tablets and smartphone devices. |
||||||||
COM DEV
International |
David D. Sgro |
Mr.
Sgro will be required to present all business opportunities which are suitable for COM DEV International to COM DEV International prior to presenting
them to us. COM DEV International is a global designer and manufacturer of space hardware. |
||||||||
Cott
Corporation |
Eric S. Rosenfeld |
Mr.
Rosenfeld will be required to present all business opportunities which are suitable for the Cott Corporation to the Cott Corporation prior to
presenting them to us. Cott Corporation is a private label beverage company. |
||||||||
SAExploration
Holdings Inc. |
Eric S. Rosenfeld David D. Sgro |
Each
of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for SAExploration Holdings Inc. to
SAExploration Holdings Inc. prior to presenting them to us. SAE is a holding company of various subsidiaries which collectively form a geophysical
services company offering seismic data acquisition services to the oil and gas industry in North America, South America, and Southeast
Asia. |
||||||||
Pangaea
Logistics Solutions Ltd. |
Eric S. Rosenfeld David D. Sgro |
Each
of Messrs. Rosenfeld and Sgro will be required to present all business opportunities which are suitable for Pangaea to Pangaea prior to presenting them
to us. Pangaea is a Newport, Rhode Island-headquartered growth oriented global logistics company focused on providing seaborne drybulk transportation
services. |
Name of Affiliated Company |
Name of Individual(s) |
Priority/Preference relative to Harmony Merger Corp. | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
The Mansfield
Clubs |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for The Mansfield Clubs to The Mansfield Clubs prior to presenting
them to us. The Mansfield Clubs are three high-end fitness centers in the Montreal area. |
||||||||
Myca Health
Inc. |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for Myca Health Inc. to Myca Health Inc. prior to presenting them to
us. Myca Health Inc. is a medical software company focused on primary care practices across the United States. |
||||||||
The Atwater
Club |
Leonard B. Schlemm |
Mr.
Schlemm will be required to present all business opportunities which are suitable for The Atwater Club to The Atwater Club prior to presenting them to
us. The Atwater Club is a private racquet club in Montreal. |
|
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; |
|
each of our officers and directors; and |
|
all of our officers and directors as a group. |
Prior to Offering |
After Offering(2) |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name and Address of Beneficial Owner(1) |
Amount and Nature of Beneficial Ownership |
Approximate Percentage of Outstanding Shares of common stock |
Amount and Nature of Beneficial Ownership |
Approximate Percentage of Outstanding Shares of common stock |
|||||||||||||||
Eric S.
Rosenfeld |
1,416,642 | (3 ) | 46.8 | % | 1,240,001 | (3 )(4) | 9.4 | % | |||||||||||
David D. Sgro
|
306,315 | 10.1 | % | 255,602 | (5 ) | 1.9 | % | ||||||||||||
Thomas
Kobylarz |
55,694 | 1.8 | % | 46,473 | (6 ) | * | |||||||||||||
John P.
Schauerman |
15,000 | * | 22,500 | (7) | * | ||||||||||||||
Adam J.
Semler |
15,000 | * | 22,500 | (7) | * | ||||||||||||||
Leonard B.
Schlemm |
119,800 | 4.0 | % | 202,500 | (8 ) | 1.5 | % | ||||||||||||
Polar
Securities Inc. (9) |
215,000 | 7.1 | % | 285,000 | (10 ) | 2.2 | % | ||||||||||||
DKU 2013
LLC (11) |
215,000 | 7.1 | % | 285,000 | (10 ) | 2.2 | % | ||||||||||||
The K2
Principal Fund L.P. (12) |
215,000 | 7.1 | % | 285,000 | (10 ) | 2.2 | % | ||||||||||||
Covalent
Capital Partners Master Fund, L.P. (13) |
180,000 | 5.9 | % | 270,000 | (14) | 2.0 | % | ||||||||||||
All directors
and executive officers as a group (six individuals) |
1,928,451 | 63.7 | % | 1,789,576 | (15 ) | 13.5 | % |
* |
Less than 1%. |
(1) |
Unless otherwise indicated, the business address of each of the individuals is c/o Harmony Merger Corp., 777 Third Avenue, 37th Floor, New York, New York 10017 |
(2) |
Assumes no exercise of the over-allotment option and, therefore, the forfeiture of an aggregate of 382,500 shares of common stock held by our initial stockholders. |
(3) |
Includes 60,000 shares held by the Rosenfeld Childrens Successor Trust, a trust established for Mr. Rosenfelds children. |
(4) |
Includes 25,758 private units to be held by Mr. Rosenfeld and 30,000 private units to be held by the Rosenfeld Childrens Successor Trust, which private units will be purchased simultaneously with the consummation of this offering. |
(5) |
Includes 2,500 private units to be held by Mr. Sgro, which private units will be purchased simultaneously with the consummation of this offering. |
(6) |
Includes 454 private units to be held by Mr. Kobylarz, which private units will be purchased simultaneously with the consummation of this offering. |
(7) |
Includes 7,500 private units to be held by this individual, which private units will be purchased simultaneously with the consummation of this offering. |
(8) |
Includes 67,500 private units to be held by Mr. Schlemm, which private units will be purchased simultaneously with the consummation of this offering. |
(9) |
The business address of Polar Securities Inc. is 401 Bay Street, Suite 1900 P.O. Box 19 ¦ Toronto, Ontario M5H 2Y4. Represents shares held by NPIC Limited, a fund for which Polar Securities, Inc. serves as investment manager. J. Paul Sabourin, Chairman and Chief Investment Officer of Polar Securities, has voting and dispositive power over the shares held by NPIC Limited. |
(10) |
Includes 95,000 private units to be held by this entity, which private units will be purchased simultaneously with the consummation of this offering. |
(11) |
The business address of DKU 2013, LLC is 405 Park Avenue, 6th Floor, New York, NY 10022. Jeff Keswin has ultimate voting and dispositive power over the shares held by DKU 2013, LLC. |
(12) |
The business address of The K2 Principal Fund L.P. is 2 Bloor Street West, Suite 801, Toronto, Ontario, Canada M4W 3E2. Shawn Kimel has ultimate voting and dispositive power over the shares held by The K2 Principal Fund L.P. as he is President of K2 Genpar 2009 Inc., the General Partner of K2 Genpar L.P., the General Partner of The K2 Principal Fund L.P. |
(13) |
The business address of Covalent Capital Partners Master Fund, L.P. is 190 Elgin Avenue, Grand Cayman, Cayman Islands, KY1-9005. Robert Hockett has voting and dispositive power over the shares held by Covalent Capital Partners Master Fund, L.P. Does not include 720,000 shares underlying units that Covalent Capital Partners Master Fund, L.P. has indicated an intention to purchase in this offering. |
(14) |
Includes 90,000 private units to be held by Covalent Capital Partners Master Fund, L.P., which private units will be purchased simultaneously with the consummation of this offering. |
(15) |
Includes an aggregate of 141,212 private units to be held by our executive officers and directors, which private units will be purchased simultaneously with the consummation of this offering. |
Name |
Number of Shares |
Relationship to Us |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
NPIC
Limited |
231,000 | Initial Stockholder |
||||||||
DKU
2013 LLC |
231,000 | Initial Stockholder |
||||||||
The K2
Principal Fund L.P. |
231,000 | Initial Stockholder |
|
at any time while the warrants are exercisable, |
|
upon not less than 30 days prior written notice of redemption to each warrant holder, |
|
if, and only if, the reported last sale price of the shares of common stock equals or exceeds $21.00 per share, for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, and |
|
if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption. |
|
1% of the number of shares of common stock then outstanding, which will equal 132,187 shares immediately after this offering (or 151,312 if the over-allotment option is exercised in full); and |
|
the average weekly trading volume of the shares of common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
|
the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
|
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
|
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
|
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
Underwriters |
Number of Units |
|||||
---|---|---|---|---|---|---|
Cantor
Fitzgerald & Co. |
||||||
Total
|
10,000,000 |
|
receipt and acceptance of the units by the underwriters; and |
|
the underwriters right to reject orders in whole or in part. |
Per Unit |
Without Over-allotment |
With Over-allotment |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | 10.00 | $ | 100,000,000 | $ | 115,000,000 | ||||||||
Discount(1) |
$ | 0.5325 | $ | 5,325,000 | $ | 5,775,000 | ||||||||
Proceeds
before expenses(2) |
$ | 9.4675 | $ | 94,675,000 | $ | 109,225,000 |
(1) |
The underwriting discount of 2.325% is payable at the closing of the offering (excluding proceeds received from the exercise of the over-allotment option, on which we will not pay any underwriting discount, resulting in an effective underwriting discount of approximately 2.021% if the over-allotment option is exercised in full). Additionally, pursuant to the underwriting agreement, a deferred underwriting fee of up to 3.0% is payable upon consummation of our initial business combination and will be held in the trust account until consummation of such business combination. |
(2) |
The offering expenses are estimated at $500,000. |
|
the history and prospects of companies whose principal business is the acquisition of other companies; |
|
prior offerings of those companies; |
|
our prospects for acquiring an operating business at attractive values; |
|
our capital structure; |
|
the per share amount of net proceeds being placed into the trust account; |
|
an assessment of our management and their experience in identifying operating companies; |
|
general conditions of the securities markets at the time of the offering; and |
|
other factors as were deemed relevant. |
|
Stabilizing Transactions. The underwriters may make bids or purchases for the purpose of preventing or retarding a decline in the price of our units, as long as stabilizing bids do not exceed the offering price of $10.00 and the underwriters comply with all other applicable rules. |
|
Over-Allotments and Syndicate Coverage Transactions. The underwriters may create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus up to the amount of the over-allotment option. This is known as a covered short position. The underwriters may also create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus and the units allowed by the over-allotment option. This is known as a naked short position. If the underwriters create a short position during the offering, the representative may engage in syndicate covering transactions by purchasing our units in the open market. The representative may also elect to reduce any short position by exercising all or part of the over-allotment option. Determining what method to use in reducing the short position depends on how the units trade in the aftermarket following the offering. If the unit price drops following the offering, the short position is usually covered with shares purchased by the underwriters in the aftermarket. However, the underwriters may cover a short position by exercising the over-allotment option even if the unit price drops following the offering. If the unit price rises after the offering, then the over-allotment option is used to cover the short position. If the short position is more than the over-allotment option, the naked short must be covered by purchases in the aftermarket, which could be at prices above the offering price. |
|
Penalty Bids. The representative may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
F-2 |
||||||
F-3 |
||||||
F-4 |
||||||
F-5 |
||||||
F-6 F-11 |
F-13 |
||||||
F-14 |
||||||
F-15 |
||||||
F-16 |
||||||
F-17 |
||||||
F-18 F-23 |
ASSETS |
||||||
Current
assets Cash and cash equivalents |
$ | 6,343 | ||||
Deferred
offering costs associated with initial public offering |
98,362 | |||||
Total
assets |
$ | 104,705 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||
Current
liabilities: |
||||||
Deferred
offering costs payable |
$ | 30,800 | ||||
Note payable
to stockholder |
50,000 | |||||
Total
liabilities |
$ | 80,800 | ||||
Commitments |
||||||
Stockholders equity |
||||||
Preferred
stock, $.0001 par value |
||||||
Authorized
1,000,000 shares; none issued |
$ | | ||||
Common stock,
$.0001 par value |
||||||
Authorized
16,000,000 shares, 3,026,250 issued and outstanding(1)(2) |
303 | |||||
Additional
paid-in capital |
24,697 | |||||
Accumulated
deficit |
(1,095 | ) | ||||
Total
stockholders equity |
$ | 23,905 | ||||
Total
liabilities and stockholders equity |
$ | 104,705 |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Includes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
General and
administrative costs |
$ | 1,125 | ||||
Operating
loss |
(1,125 | ) | ||||
Other
income: |
||||||
Interest
income |
30 | |||||
Net loss
|
$ | (1,095 | ) | |||
Weighted
average shares outstanding(1)(2) |
2,643,750 | |||||
Basic and
diluted net loss per share |
$ | (0.00 | ) |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Excludes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Common Stock |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares(1)(2) |
Amount |
Additional Paid-In Capital |
Accumulated deficit |
Shareholders Equity |
||||||||||||||||||
Common shares
issued to initial stockholders |
3,026,250 | $ | 303 | $ | 24,697 | $ | | $ | 25,000 | |||||||||||||
Net Loss
|
| | | (1,095 | ) | (1,095 | ) | |||||||||||||||
Balance at
September 30, 2014 |
3,026,250 | $ | 303 | $ | 24,697 | $ | (1,095 | ) | $ | 23,905 |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Includes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Cash flow
from operating activities |
||||||
Net
loss |
$ | (1,095 | ) | |||
Net cash
used in operating activities |
(1,095 | ) | ||||
Cash flows
from financing activities |
||||||
Payment of
deferred offering costs associated with initial public offering |
(67,562 | ) | ||||
Proceeds from
sale of shares of common stock to initial stockholders |
25,000 | |||||
Proceeds from
note payable, stockholder |
50,000 | |||||
Net cash
provided by financing activities |
7,438 | |||||
Net
increase in cash and cash equivalents |
6,343 | |||||
Cash and cash
equivalents at beginning of period |
| |||||
Cash and
cash equivalents at end of period |
$ | 6,343 | ||||
Non-cash
financing activity |
||||||
Accrual of
deferred offering costs |
$ | 30,800 |
ASSETS |
||||||
Current
assets Cash and cash equivalents |
$ | 74,985 | ||||
Deferred
offering costs associated with initial public offering |
22,500 | |||||
Total
assets |
$ | 97,485 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||
Current
liabilities: |
||||||
Accounts
payable |
$ | 478 | ||||
Deferred
offering costs payable |
22,500 | |||||
Note payable
to stockholder |
50,000 | |||||
Total
current liabilities |
72,978 | |||||
Commitments |
||||||
Stockholders equity |
||||||
Preferred
stock, $.0001 par value; Authorized 1,000,000 shares; none issued |
| |||||
Common stock,
$.0001 par value; Authorized 16,000,000 shares, 3,026,250 shares issued and outstanding(1)(2) |
303 | |||||
Additional
paid-in capital |
24,697 | |||||
Accumulated
deficit |
(493 | ) | ||||
Total
stockholders equity |
24,507 | |||||
Total
liabilities and stockholders equity |
$ | 97,485 |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Includes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Formation and
operational costs |
$ | 493 | ||||
Net
loss |
$ | (493 | ) | |||
Weighted
average shares outstanding(1)(2) |
2,643,750 | |||||
Basic and
diluted net loss per share |
$ | (0.00 | ) |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Excludes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Common Stock |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares(1)(2) |
Amount |
Additional Paid-In Capital |
Accumulated deficit |
Shareholders Equity |
||||||||||||||||||
Common shares
issued to initial stockholders |
3,026,250 | $ | 303 | $ | 24,697 | $ | | $ | 25,000 | |||||||||||||
Net Loss
|
| | | (493 | ) | (493 | ) | |||||||||||||||
Balance at
May 31, 2014 |
3,026,250 | $ | 303 | $ | 24,697 | $ | (493 | ) | $ | 24,507 |
(1) |
Share amounts have been retroactively restated to reflect the effect of a stock dividend of approximately 0.05 shares of common stock for each outstanding share of common stock on November 7, 2014. |
(2) |
Includes an aggregate of 382,500 shares subject to forfeiture by the initial stockholders to the extent that the underwriters over-allotment option is not exercised in full. (Note 7) |
Cash flow
from operating activities |
||||||
Net loss
|
$ | (493 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating activities: |
||||||
Change in
operating assets and liabilities: |
||||||
Increase in
accounts payable |
478 | |||||
Net cash
used in operating activities |
(15 | ) | ||||
Cash flows
from financing activities |
||||||
Proceeds from
sale of shares of common stock to initial stockholders |
25,000 | |||||
Proceeds from
note payable, stockholder |
50,000 | |||||
Net cash
provided by financing activities |
75,000 | |||||
Net
increase in cash and cash equivalents |
74,985 | |||||
Cash and cash
equivalents at beginning of period |
| |||||
Cash and
cash equivalents at end of period |
$ | 74,985 | ||||
Non-cash
financing activities |
||||||
Accrual of
deferred offering costs |
$ | 22,500 |
Initial
Trustees fee |
$ | 1,000 | (1) | |||
SEC
Registration Fee |
15,000 | |||||
FINRA filing
fee |
18,000 | |||||
Accounting
fees and expenses |
40,000 | |||||
Nasdaq listing
fees |
75,000 | |||||
Printing and
engraving expenses |
45,000 | |||||
Directors
& Officers liability insurance premiums |
75,000 | (2) | ||||
Legal fees and
expenses |
250,000 | |||||
Miscellaneous
|
56,000 | (3) | ||||
Total
|
$ | 575,000 |
(1) |
In addition to the initial acceptance fee that is charged by Continental Stock Transfer & Trust Company, as trustee, the registrant will be required to pay to Continental Stock Transfer & Trust Company $16,100 for acting as trustee, as transfer agent of the registrants shares of common stock, as warrant agent for the registrants warrants and as escrow agent. |
(2) |
This amount represents the approximate amount of director and officer liability insurance premiums the registrant anticipates paying following the consummation of its initial public offering and until it consummates a business combination. |
(3) |
This amount represents additional expenses that may be incurred by the Company in connection with the offering over and above those specifically listed above, including distribution and mailing costs. |
Exhibit No. |
Description |
|||||
---|---|---|---|---|---|---|
1.1 | Form
of Underwriting Agreement.** |
|||||
3.1 | Certificate of incorporation.** |
|||||
3.2 | Amended and Restated Certificate of incorporation. ** |
|||||
3.3 | Bylaws.** |
|||||
4.1 | Specimen Unit Certificate.** |
|||||
4.2 | Specimen Common Share Certificate.** |
|||||
4.3 | Specimen Warrant Certificate. |
|||||
4.4 | Form
of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant. |
|||||
5.1 | Opinion of Graubard Miller. |
|||||
10.1 | Form
of Letter Agreement among the Registrant, Cantor Fitzgerald & Co. and the Companys officers, directors and
stockholders. |
|||||
10.2 | Form
of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant. ** |
|||||
10.3 | Form
of Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.** |
|||||
10.4 | Form
of Promissory Note issued to Eric S. Rosenfeld.** |
|||||
10.5 | Form
of Registration Rights Agreement among the Registrant and the Initial Stockholders.** |
|||||
10.6.1 | Subscription Agreement among the Registrant, Graubard Miller and Eric S. Rosenfeld. |
|||||
10.6.2 | Subscription Agreement among the Registrant, Graubard Miller and David D. Sgro. |
|||||
10.6.3 | Subscription Agreement among the Registrant, Graubard Miller and Greg Monahan. |
|||||
10.6.4 | Subscription Agreement among the Registrant, Graubard Miller and Tom Kobylarz. |
|||||
10.6.5 | Subscription Agreement among the Registrant, Graubard Miller and Kyrill Asatur. |
|||||
10.6.6 | Subscription Agreement among the Registrant, Graubard Miller and Joel Greenblatt. |
Exhibit No. |
Description | |||||
---|---|---|---|---|---|---|
10.6.7 | Subscription Agreement among the Registrant, Graubard Miller and Adam Semler. |
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10.6.8 | Subscription Agreement among the Registrant, Graubard Miller and John Schauerman. |
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10.6.9 | Subscription Agreement among the Registrant, Graubard Miller and Leonard Schlemm. |
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10.6.10 | Subscription Agreement among the Registrant, Graubard Miller and Jeff Hastings. |
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10.6.11 | Subscription Agreement among the Registrant, Graubard Miller and DKU 2013 LLC. |
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10.6.12 | Subscription Agreement among the Registrant, Graubard Miller and The K2 Principal Fund L.P. |
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10.6.13 | Subscription Agreement among the Registrant, Graubard Miller and NPIC Limited. |
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10.6.14 | Subscription Agreement among the Registrant, Graubard Miller and Covalent Capital Partners Master Fund, L.P. |
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10.7 | Form
of letter agreement between Crescendo Advisors II, LLC and the Registrant. ** |
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10.8 | Financial Advisor Agreement. |
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14 | Form
of Code of Ethics.** |
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23.1 | Consent of Marcum LLP. |
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23.2 | Consent of Graubard Miller (included in Exhibit 5.1). |
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24 | Power
of Attorney (included on signature page of this Registration Statement). |
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99.1 | Form
of Audit Committee Charter.** |
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99.2 | Form
of Nominating Committee Charter.** |
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99.3 | Form
of Compensation Committee Charter.** |
** |
Previously filed. |
(a) |
The undersigned registrant hereby undertakes: |
HARMONY MERGER CORP. |
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By: |
/s/ Eric S. Rosenfeld |
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Name: |
Eric
S. Rosenfeld |
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Title: |
Chief
Executive Officer |
Name |
Position |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ Eric
S. Rosenfeld Eric S. Rosenfeld |
Chairman of the Board and Chief Executive Officer (Principal executive officer) |
December 31, 2014 |
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/s/ Thomas
Kobylarz Thomas Kobylarz |
Chief
Financial Officer (Principal financial and accounting officer) |
December 31, 2014 |
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/s/ David
D. Sgro David D. Sgro |
Chief
Operating Officer and Director |
December 31, 2014 |
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/s/ John
P. Schauerman John P. Schauerman |
Director |
December 31, 2014 |
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/s/ Adam
J. Semler Adam J. Semler |
Director |
December 31, 2014 |
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/s/
Leonard B. Schlemm Leonard B. Schlemm |
Director |
December 31, 2014 |
Exhibit 4.3
NUMBER ________- |
(SEE REVERSE SIDE FOR LEGEND) THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO THE EXPIRATION DATE (DEFINED BELOW) |
WARRANTS |
HARMONY MERGER CORP.
CUSIP 413247123
WARRANT
THIS CERTIFIES THAT, for value received
is the registered holder of a warrant or warrants (the “Warrant”) of Harmony Merger Corp., a Delaware corporation (the “Company”), expiring at 5:00 p.m., New York City time, on the five year anniversary of the Company’s completion of an initial merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities (a “Business Combination”), to purchase three fourths (3/4) of one fully paid and non-assessable share of common stock, par value $.0001 per share (“Shares”), of the Company for each Warrant evidenced by this Warrant Certificate. The Warrant entitles the holder thereof to purchase from the Company, commencing on the later of (a) _________, 2015 [one year from the date of the final prospectus] and (b) thirty (30) days after the Company’s completion of an initial Business Combination, such number of Shares of the Company at the Warrant Price, upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent, Continental Stock Transfer & Trust Company, but only subject to the conditions set forth herein and in the Warrant Agreement between the Company and Continental Stock Transfer & Trust Company. In no event will the Company be required to net cash settle any warrant exercise. The Warrant Agreement provides that upon the occurrence of certain events the Warrant Price and the number of Shares purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. The term Warrant Price as used in this Warrant Certificate refers to the price per Share at which Shares may be purchased at the time the Warrant is exercised. The initial Warrant Price per share of Common Stock for any Warrant is equal to $11.50 per full share; provided however, that a Warrant may not be exercised for a fractional share, so that only multiples of four Warrants may be exercised at a given time.
Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.
Warrant Certificates, when surrendered at the office or agency of the Warrant Agent by the registered holder hereof in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.
Upon due presentment for registration of transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental charge.
The Company and the Warrant Agent may deem and treat the registered holder as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the registered holder, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant does not entitle the registered holder to any of the rights of a stockholder of the Company.
The Company reserves the right to call the Warrant at any time prior to its exercise with a notice of call in writing to the holders of record of the Warrant, giving at least 30 days’ notice of such call, at any time while the Warrant is exercisable, if the last sale price of the Shares has been at least $21.00 per share on each of 20 trading days within any 30 trading day period (the “30-day trading period”) ending on the third business day prior to the date on which notice of such call is given and if, and only if, there is a current registration statement in effect with respect to the Shares underlying the Warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption. The call price of the Warrants is to be $.01 per Warrant. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in the notice of call shall be canceled on the books of the Company and have no further value except for the $.01 call price.
By
President | Secretary | ||
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder irrevocably elects to exercise ______________ Warrants represented by this Warrant Certificate, and to purchase the Common Stock issuable upon the exercise of such Warrants, and requests that Certificates for such shares shall be issued in the name of
(PLEASE TYPE OR PRINT NAME AND ADDRESS) |
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to ______________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Registered Holder at the address stated below:
Dated: | |||
(SIGNATURE) | |||
(ADDRESS) | |||
(TAX IDENTIFICATION NUMBER) |
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Warrants
For Value Received, _______________________ hereby sell, assign, and transfer unto
(PLEASE TYPE OR PRINT NAME AND ADDRESS) |
(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
and be delivered to ______________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS)
______________________ of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and appoint _________________________________ Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
Dated: | |||
(SIGNATURE) |
The signature to the assignment of the Subscription Form must correspond to the name written upon the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever, and must be guaranteed by a commercial bank or trust company or a member firm of the NYSE Amex, New York Stock Exchange, Pacific Stock Exchange or Chicago Stock Exchange.
Exhibit 4.4
WARRANT AGREEMENT
Agreement made as of ___________, 2014 between Harmony Merger Corp., a Delaware corporation, with offices at 777 Third Avenue, 37th Floor, New York, NY 10017 (“Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, New York 10004 (“Warrant Agent”).
WHEREAS, the Company has received binding commitments (“Subscription Agreements”) from its initial stockholders to purchase up to an aggregate of 605,000 units, each unit (“Unit”) comprised of one share of common stock of the Company, par value $.0001 per share (“Common Stock”) and one warrant (“Warrant”) to purchase three-fourths of a share of Common Stock exercisable in multiples of four Warrants, at a price of $11.50 per whole share, subject to adjustment as described herein, and in connection therewith, will issue and deliver up to an aggregate of 605,000 Warrants upon consummation of such private placement (“Private Offering”); and
WHEREAS, the Company may issue up to an additional 50,000 Warrants in satisfaction of certain working capital loans made by the Company’s officers, directors, initial stockholders and affiliates; and
WHEREAS, the Company is engaged in a public offering (“Public Offering”) of Units and, in connection therewith, will issue and deliver up to 11,500,000 Warrants to the public investors; and
WHEREAS, the Company has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, No. 333-197330 (“Registration Statement”), for the registration, under the Securities Act of 1933, as amended (“Act”) of, among other securities, the Public Warrants and the Common Stock issuable upon exercise of the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed, or bear the facsimile signature of, by the Chairman of the Board or Chief Executive Officer and Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
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2.2. Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3. Registration.
2.3.1. Warrant Register. The Warrant Agent shall maintain books (“Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.
2.3.2. Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4. Detachability of Warrants. The securities comprising the Units will not be separately transferable until ten business days following the earlier to occur of the expiration of the underwriters’ over-allotment option in the Public Offering, its exercise in full or the announcement by the underwriters of its intention not to exercise all or any remaining portion of the over-allotment option, but in no event will separate trading of the securities comprising the Units begin until (i) the Company files a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering including the proceeds received by the Company from the exercise of the over-allotment option, if the over-allotment option is exercised on the date hereof, and (ii) the Company issues a press release and files a Current Report on Form 8-K announcing when such separate trading shall begin (the “Detachment Date”).
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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 Warrant Agreement, to purchase from the Company three fourths of one share of Common Stock, at the price of $11.50 per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which 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 20 business days; provided, however, that the Company shall provide at least 20 business days prior written notice of such reduction to registered holders of the Warrants; provided, further, however, that any such reduction shall be applied consistently to all of the Warrants.
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3.2. Duration of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the later of 30 days after the completion by the Company of a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (“Business Combination”) (as described more fully in the Registration Statement) or 12 months from the date of the Company’s prospectus, and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) five years from the consummation of a Business Combination (ii) the liquidation of the Company or if the Company fails to consummate a Business Combination within 24 months from the closing of the Public Offering, and (iii) the Redemption Date as provided in Section 6.2 of this Agreement (“Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in Section 7.4 below. Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide written notice to registered holders of the Warrants of such extension of not less than 20 days.
3.3. Exercise of Warrants.
3.3.1. Payment. Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full the Warrant Price for each full 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, as follows:
(a) in cash, good certified check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company); or
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(b) in the event of redemption pursuant to Section 6 hereof in which the Company’s management has elected to require all holders of Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of 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” (defined below) by (y) the Fair Market Value. Solely for purposes of this Section 3.3.1(b), the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to holders of Warrant pursuant to Section 6 hereof; or
(c) in the event the post-effective amendment or registration statement required by Section 7.4 hereof is not effective and current, then during the period beginning on the 91st day after the closing of the Business Combination and ending upon the effectiveness of such post-effective amendment or registration statement, and during any other period after such date of effectiveness when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this Section 3.3.1(d), the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the date of exercise.
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3.3.2. Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if any), the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of 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 Act with respect to the shares of 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 shares of 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 no event will the Company be required to net cash settle the Warrant exercise. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful.
3.3.3. Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.
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3.3.4. Date of Issuance. Each person in whose name any such certificate for Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the share transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the share transfer books are open.
3.3.5 Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it (together with such holders affiliates) elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder (or its affiliates) 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 (and such holder’s affiliates’) Warrant, and such holder (and such holder’s affiliates) 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 shares of 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 shares of 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 annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the SEC as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the transfer agent setting forth the number of 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.
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4. Adjustments.
4.1. Stock Dividends - Split Ups. If after the date hereof, 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 outstanding shares of Common Stock. A rights offering to all 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, (i) if the rights offering is for securities convertible into or exercisable for the Common Stock, in determining the price payable for the 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 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, with the right to receive such rights.
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4.2. Aggregation of Shares. If after the date hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse share split or reclassification of the Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse share 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 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 shares of 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 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the conversion rights of the holders of the Common Stock in connection with a proposed initial Business Combination, (d) as a result of the repurchase of shares of Common Stock by the Company in connection with an initial Business Combination or as otherwise permitted by the Investment Management Trust Agreement between the Company and the Warrant Agent dated of even date herewith or (e) in connection with the Company’s liquidation and the distribution of its assets upon its failure to consummate a Business Combination (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and the fair market value (as determined by the Company’s board of directors, in good faith) of any securities or other assets paid on each share of the Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.3, “Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share basis with the per share amounts of all other cash dividends and cash distributions paid on the 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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4.4 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
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4.5. Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change under subsections 4.1, 4.2 or 4.3 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance” ); provided, however, that (i) if the holders of the Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Common Stock (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by stockholders of the Company as provided for in the Company’s amended and restated certificate of incorporation or as a result of the repurchase of shares of Common Stock by the Company if a proposed initial Business Combination is presented to the stockholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided, further, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such amount, (1) Section 6 of this Agreement shall be taken into account, (2) the price of each share of Common Stock shall be 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 effective date of the applicable event, (3) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event , and (4) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration” means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common Stock, and (ii) in all other cases, 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 effective date of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to subsection 4.1 or 4.2 or Sections 4.3, 4.4 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of such Warrant.
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4.6. Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5, then, in any such event, the Company shall give written notice of the occurrence of such event to each Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
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4.7. No Fractional Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.
4.8. Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.9 Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if such firm determines that an adjustment is necessary, the terms of such adjustment, provided, however, that under no circumstances shall the Warrant be adjusted pursuant to this Section 4 as a result of any issuance of securities in connection with a Business Combination. 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, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3. Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.
5.4. Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
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5.5. Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6. Detachment Date. Prior to the Detachment Date, the Public Warrants may be transferred and 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 Unit 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 the notice referred to in Section 6.2, at the price of $.01 per Warrant (“Redemption Price”), provided that the last sales price of the Common Stock has been at least $21.00 per share (subject to adjustment in accordance with Section 4 hereof), on each of twenty (20) trading days within any thirty (30) trading day period (“30-Day Trading Period”) ending on the third business day prior to the date on which notice of redemption is given and provided further that there is a current registration statement in effect with respect to the shares of Common Stock underlying the Warrants commencing five business days prior to the 30-Day Trading Period and continuing each day thereafter until the Redemption Date (defined below).
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6.2. Date Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the Redemption Date to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.
6.3. Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with Section 3 of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date. In the event the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to Section 3.3.1(b), the notice of redemption will contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair Market Value” in such case. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
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7. Other Provisions Relating to Rights of Holders of Warrants.
7.1. No Rights as Shareholder. A Warrant does not entitle the registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter.
7.2. Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
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7.4. Registration of Common Stock. The Company agrees that as soon as practicable, but in no event later than 15 days after the closing of a Business Combination, it shall use its best efforts to file with the SEC a post-effective amendment to the Registration Statement, or a new registration statement, for the registration, under the Act, of the shares of Common Stock issuable upon exercise of the Warrants, and it shall use its best efforts to take such action as is necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the shares of Common Stock issuable upon exercise of the Warrants. In either case, the Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement until the expiration of the Warrants in accordance with the provisions of this Agreement. In addition, the Company agrees to use its best efforts to register such securities under the blue sky laws of the states of residence of the exercising warrant holders to the extent an exemption is not available. If any such post-effective amendment or registration statement has not been declared effective by the 90-day anniversary following the closing of the Business Combination, holders of the Warrants shall have the right, during the period beginning on the 91st day after the closing of the Business Combination and ending upon such post-effective amendment or registration statement being declared effective by the SEC, and during any other period after such date of effectiveness when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis” as determined in accordance with Section 3.3.1(d). The Company shall provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the issuance of shares of Common Stock upon exercise of the Warrants on a cashless basis in accordance with this Section 7.4 is not required to be registered under the Act and (ii) the shares of Common Stock issued upon such exercise will be freely tradable under U.S. federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Act) of the Company and, accordingly, will not be required to bear a restrictive legend. For the avoidance of any doubt, unless and until all of the Warrants have been exercised, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this Section 7.4. The provisions of this Section 7.4 may not me modified, amended or deleted without the prior written consent of CF &CO.
8. Concerning the Warrant Agent and Other Matters.
8.1. Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
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8.2. Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
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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.
8.3. Fees and Expenses of Warrant Agent.
8.3.1. Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4. Liability of Warrant Agent.
8.4.1. Reliance on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
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8.4.2. Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s gross negligence, willful misconduct, or bad faith.
8.4.3. Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any Common Stock will when issued be valid and fully paid and nonassessable.
8.5. Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of Common Stock through the exercise of Warrants.
8.6 Waiver. The Warrant Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
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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 Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Attn: Chief Executive Officer
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Compliance Department
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with a copy in each case to:
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: David Alan Miller, Esq.
and
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attn: Stuart Neuhauser, Esq.
and
Cantor Fitzgerald & Company
499 Park Avenue
New York, NY 10022
Attn: David Batalion
Facsimile:
9.3. Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
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9.4. Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants and, for the purposes of Sections 2.5, 7.4 and 9.8, hereof, CF&CO, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. CF&CO shall be deemed to be a third party beneficiary of this Warrant Agreement with respect to Sections 2.5, 7.4 and 9.8 hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto (and CF&CO with respect to Sections 2.5, 7.4 and 9.8 hereof) and their successors and assigns and of the registered holders of the Warrants.
9.5. Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it.
9.6. Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect of Headings. The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.
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9.8 Amendments. This Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent or vote of the registered holders of 65% of the then outstanding Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the registered holders. The provisions of this Section 9.8 may not be modified, amended or deleted without the prior written consent of CF&CO.
9.9 Severability. This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.
HARMONY MERGER CORP. | ||
By: | ||
Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
By: | ||
Name: Title: |
27
Exhibit 5.1
GRAUBARD MILLER
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
December 31, 2014 |
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Dear Sirs:
Reference is made to the Registration Statement on Form S-1 (“Registration Statement”) filed by Harmony Merger Corp. (the “Company”), a Delaware corporation, under the Securities Act of 1933, as amended (“Act”), covering (i) 10,000,000 units (the “Firm Units”), each unit consisting of one share of the Company’s common stock, par value $.0001 per share (the “Common Stock”), and one redeemable warrant (“Warrant”), each Warrant to purchase three-fourths (3/4) of a share of Common Stock, representing a total of 10,000,000 shares of Common Stock and 10,000,000 Warrants, which the Company will sell to the underwriters (the “Underwriters”) for whom Cantor Fitzgerald & Co. is acting as representative, (ii) 1,500,000 units (the “Over-Allotment Units”), each unit identical to the units in the Firm Units, representing a total of 1,500,000 shares of Common Stock and 1,500,000 Warrants, which the Underwriters will have a right to purchase from the Company to cover over-allotments, if any, and (iii) all of the shares of Common Stock and Warrants included in the Firm Units and Over-Allotment Units.
We have examined such documents and considered such legal matters as we have deemed necessary and relevant as the basis for the opinion set forth below. With respect to such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as reproduced or certified copies, and the authenticity of the originals of those latter documents. As to questions of fact material to this opinion, we have, to the extent deemed appropriate, relied upon certain representations of certain officers and employees of the Company.
Based upon the foregoing, we are of the opinion that:
1. The Units, the Over-Allotment Units, the Warrants and the Common Stock to be sold to the Underwriters, when issued and sold in accordance with and in the manner described in the Registration Statement, will be duly authorized, validly issued, fully paid and non assessable.
2. The Warrants constitute legal, valid and binding obligations of the Company, enforceable against it in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
Our opinions set forth herein are limited to the laws of the State of New York and the General Corporation Law of the State of Delaware and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-Opined on Law on the opinions herein.
We hereby consent to the use of this opinion as an exhibit to the Registration Statement, to the use of our name as your counsel and to all references made to us in the Registration Statement and in the Prospectus forming a part thereof. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations promulgated thereunder.
Very truly yours, | |
/s/ Graubard Miller |
Exhibit 10.1
____________ __, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Cantor Fitzgerald & Co.
499 Park Avenue
New York, New York 10022
Re: | Initial Public Offering |
Ladies and Gentlemen:
This letter is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between Harmony Merger Corp., a Delaware corporation (the “Company”), and Cantor Fitzgerald & Co., as Representative (the “Representative”) of the several Underwriters named in Schedule I thereto (the “Underwriters”), relating to an underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”), each comprised of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock. Certain capitalized terms used herein are defined in paragraph 16 hereof.
In order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees with the Company as follows:
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all shares of Common Stock beneficially owned by him, her or it, whether acquired before, in or after the IPO, in favor of such Business Combination. The foregoing provision may not be amended under any circumstances.
2. (a) In the event that the Company fails to consummate a Business Combination within 24 months from the closing of the Company’s IPO, the undersigned shall take all reasonable steps to (i) cause the Company to cease all operations except for the purpose of winding up, (ii) as promptly as possible, but no more than ten business days after the expiration of such period, cause the Trust Fund to be liquidated and distributed to the holders of IPO Shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining holders of Common Stock and the Board of Directors, cause the Company to dissolve and liquidate, subject (in the case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
(b) The undersigned hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets of the Company as a result of such liquidation with respect to his, her or its Insider Shares or Private Units (and the underlying shares of Common Stock) (“Claim”) and hereby waives any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against the Trust Fund for any reason whatsoever. The undersigned acknowledges and agrees that there will be no distribution from the Trust Fund with respect to any Warrants underlying the Private Units, all of which will terminate on the Company’s liquidation.
[(c) In the event of the liquidation of the Trust Fund, the undersigned agrees to indemnify and hold harmless the Company against any and all loss, liability, claims, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business that the Company has entered into discussions with or entered into a definitive agreement with, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds in the Trust Fund; provided that such indemnity shall not apply if such vendor or other person has executed an agreement waiving any claims against the Trust Fund.]1
3. The undersigned will escrow all of his, her or its Insider Shares pursuant to the terms of a Stock Escrow Agreement which the Company will enter into with the undersigned and an escrow agent acceptable to the Company.
4. The undersigned agrees that until the Company consummates a Business Combination, the undersigned’s Private Units will be subject to the transfer restrictions described in the Subscription Agreement relating to the undersigned’s Private Units.
1 To be included for Eric S. Rosenfeld Letter only.
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5. [The undersigned agrees to enter into an agreement in accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), pursuant to which he will place limit orders for an aggregate of up to $500,000 of the Company’s Common Stock at or below a price equal to the per-share amount held in the Trust Fund as reported in the Form 8-K disclosing all material information relating to the Company’s initial Business Combination, commencing on the later of (1) two business days after the Company files such Form 8-K and (2) 60 days after the termination of the “restricted period” in connection with the IPO under Regulation M of the Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved. Any shares purchased by the undersigned pursuant to this arrangement will be voted in favor of the proposed Business Combination. Additionally, the undersigned will not transfer, assign or sell any of the shares purchased by the undersigned pursuant to this arrangement (except to the same permitted transferees as the Insider Shares and provided the transferees agree to the same transfer restrictions) until (A) the earlier of one year after the completion of the initial Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of the initial Business Combination with respect to 50% of the shares and (B) one year after the completion of the initial Business Combination with respect to the remaining 50% of the shares.]2
6. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations the undersigned might have.
7. The undersigned acknowledges and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the Company or their affiliates, such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm that such Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.
8. Neither the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will be entitled to receive and will not accept any compensation or other cash payment prior to, or for services rendered in order to effectuate, the consummation of the Business Combination[; provided that the Company shall be allowed to repay a non-interest bearing loan in an aggregate amount of $50,000 made to the Company by the undersigned to cover the IPO expenses; provided further that the Company shall be allowed to pay $12,500 per month to Crescendo Advisors II, LLC, an affiliate of the undersigned, for office space and related services]3; provided [further] that the Company shall be allowed to repay working capital loans made by the undersigned to the Company in cash upon consummation of the Business Combination or, at the undersigned’s discretion, with respect to up to an aggregate of $500,000 of working capital loans from all lenders, by converting such loans into units at a price of $10.00 per unit, as more fully described in the Registration Statement. Notwithstanding the foregoing, the undersigned and any affiliate of the undersigned shall be entitled to reimbursement from the Company for their out-of-pocket expenses incurred in connection with identifying, investigating and consummating a Business Combination.
2 To be included for Eric S. Rosenfeld Letter only.
3 To be included for Eric S. Rosenfeld letter only.
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9. Neither the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any affiliate of the undersigned originates a Business Combination.
10. The undersigned agrees to be the _________ of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information previously furnished to the Company and the Representative is true and accurate in all material respects and does not omit any material information with respect to the undersigned’s biography. The undersigned’s FINRA Questionnaire previously furnished to the Company and the Representative is true and accurate in all material respects. The undersigned represents and warrants that:
(a) | he/she/it has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) him/her/it or any partnership in which he/she/it was a general partner at or within two years before the time of filing; or (ii) any corporation or business association of which he/she/it was an executive officer at or within two years before the time of such filing; | |
(b) | he/she/it has never had a receiver, fiscal agent or similar officer been appointed by a court for his/her/its business or property, or any such partnership; | |
(c) | he/she/it has never been convicted of fraud in a civil or criminal proceeding; | |
(d) | he/she/it/ has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations and minor offenses); | |
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(e) | he/she/it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him/her/it from (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity; or (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities or federal commodities laws; | |
(f) | he/she/it has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days your right to engage in any activity described in 9(e)(i) above, or to be associated with persons engaged in any such activity; | |
(g) | he/she/it has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated; | |
(h) | he/she/it has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or vacated; | |
(i) | he/she/it has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; |
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(j) | he/she/it has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member; | |
(k) | he/she/it has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities; | |
(l) | he/she/it was never subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the Commodity Futures Trading Commission; or the National Credit Union Administration that is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct; | |
(m) | he/she/it has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such sale, restrained or enjoined him/her/it from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities; | |
(n) | he/she/it has never been subject to any order of the SEC that orders him/her/it to cease and desist from committing or causing a future violation of: (i) any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(1) of the Advisers Act or any other rule or regulation thereunder; or (ii) Section 5 of the Securities Act; |
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(o) | he/she/it has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued; | |
(p) | he/she/it has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations; | |
(q) | he/she/it is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the Commodity Futures Trading Commission; or the National Credit Union Administration that bars the undersigned from: (i) association with an entity regulated by such commission, authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities; | |
(r) | he/she/it is not subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (the “Exchange Act”) or section 203(e) or 203(f) of the Investment Advisers Act of 1940 (the “Advisers Act”) that: (i) suspends or revokes the undersigned’s registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) places limitations on the activities, functions or operations of, or imposes civil money penalties on, such person; or (iii) bars the undersigned from being associated with any entity or from participating in the offering of any penny stock; and | |
(s) | he/she/it has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated securities association) for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade. |
11. The undersigned has full right and power, without violating any agreement by which he is bound, to enter into this letter agreement and to serve as _________ of the Company.
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12. In connection with any vote to approve a Business Combination or an amendment to the Company’s Amended and Restated Certificate of Incorporation prior to the consummation of such a Business Combination, the undersigned hereby waives his, her or its right to exercise conversion rights with respect to [any shares of the Common Stock owned or to be owned by the undersigned, directly or indirectly, whether purchased by the undersigned prior to the IPO, in the IPO or in the aftermarket]4[any Insider Shares or shares of Common Stock underlying the Private Units]5, and agrees that he, she or it will not seek conversion with respect to, or otherwise sell, such shares in connection with any vote to approve a Business Combination with respect thereto. The foregoing provision may not be amended under any circumstances.
13. The undersigned hereby agrees to not propose, or vote in favor of, an amendment to Article Sixth of the Company’s Amended and Restated Certificate of Incorporation prior to the consummation of a Business Combination unless the Company provides dissenting holders of IPO Shares with the opportunity to convert their IPO Shares in connection with any such vote.
[14. In the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient to complete such liquidation, the undersigned agrees to advance such funds necessary to complete such liquidation and agrees not to seek repayment for such expenses.]6
15. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him, her or it arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his, her or its behalf, service of process in any Proceeding.
4 To be included for all holders except NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P. and Covalent Capital Partners Master Fund L.P.
5 To be included for NPIC Limited, DKU 2013 LLC, The K2 Principal Fund L.P. and Covalent Capital Partners Master Fund L.P.
6 To be included for Eric S. Rosenfeld letter only.
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16. As used herein, (i) a “Business Combination” shall mean a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the Company acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO; (v) “Private Units” shall mean the Units purchased in the private placement taking place simultaneously with the consummation of the Company’s IPO; (vi) “Registration Statement” means the registration statement on Form S-1 (File No. 333-197330) filed by the Company with respect to the IPO; and (vii) “Trust Fund” shall mean the trust fund into which a portion of the net proceeds of the Company’s IPO will be deposited.
17. Any notice, consent or request to be given in connection with any of the terms or provisions of this letter agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission.
18. No party hereto may assign either this letter agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This letter agreement shall be binding on the parties hereto and any successors and assigns thereof.
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19. The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO.
Print Name of Insider | |
Signature |
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Exhibit 10.6.1
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated June 23, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned commits to purchase an aggregate of 55,758 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $557,580 (the “Initial Purchase Price”). Additionally, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned further commits to purchase up to an additional 100 Insider Units at $10.00 per Insider Unit for an aggregate purchase price of $1,000 (the “Over-Allotment Purchase Price” and together with the Initial Purchase Price, the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO and over-allotment option, as applicable. Simultaneously with the consummation of the IPO, GM shall deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”). Simultaneously with the consummation of all or any part of the over-allotment option, GM shall deposit the pro-rata portion of the Over-Allotment Purchase Price, based upon the amount of the over-allotment option that has been exercised, without interest or deduction, into the Trust Fund. Upon expiration of the over-allotment option, GM shall return any unused portion of the Over-Allotment Purchase Price to the undersigned. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
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● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
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Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and | |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Purchase Price.
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
-the remainder of this page is intentionally left blank-
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Very truly yours, | |
/s/ Eric S. Rosenfeld | |
Eric S. Rosenfeld |
Accepted and Agreed: | ||
Harmony Merger Corp. | ||
By: | /s/ David D. Sgro | |
Name: David D. Sgro | ||
Title: Chief Operating Officer | ||
Graubard Miller | ||
(solely with respect to its obligations to hold | ||
and disburse monies for the Insider Units) | ||
By: | /s/ Jeffrey M. Gallant | |
Name: Jeffrey M. Gallant | ||
Title: Partner |
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Exhibit 10.6.2
December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 2,500 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $25,000 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; | |
● | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; | |
● | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and | |
● | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; | |
(b) | it is acquiring the Insider Units for its account for investment purposes only; | |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; | |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; | |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. | |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |||
/s/ David D. Sgro | |||
David D. Sgro | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer |
4
Exhibit 10.6.3
December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 1,061 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $10,610 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; | |
● | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; | |
● | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and | |
● | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; | |
(b) | it is acquiring the Insider Units for its account for investment purposes only; | |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; | |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; | |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. | |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |||
/s/ Greg Monahan | |||
Greg Monahan | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer |
4
Exhibit 10.6.4
December 31, 2014 |
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 454 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $4,540 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
· | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
· | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; |
· | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
· | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
· | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |
/s/ Tom Kobylarz | |
Tom Kobylarz |
Accepted and Agreed: | ||
Harmony Merger Corp. | ||
By: | /s/ Eric S. Rosenfeld | |
Name: Eric S. Rosenfeld | ||
Title: Chief Executive Officer |
4
Exhibit 10.6.5
December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 227 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $2,270 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; | |
● | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; | |
● | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and | |
● | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; | |
(b) | it is acquiring the Insider Units for its account for investment purposes only; | |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; | |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; | |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. | |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |||
/s/ Kyrill Asatur | |||
Kyrill Asatur | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer |
4
Exhibit 10.6.6
December 31, 2014 |
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 7,500 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $75,000 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; |
● | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |
/s/ Joel Greenblatt | |
Joel Greenblatt |
Accepted and Agreed: | ||
Harmony Merger Corp. | ||
By: | /s/ Eric S. Rosenfeld | |
Name: Eric S. Rosenfeld | ||
Title: Chief Executive Officer |
4
Exhibit 10.6.7
December 31, 2014 |
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 7,500 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $75,000 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
· | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
· | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; |
· | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
· | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
· | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |
/s/ Adam Semler | |
Adam Semler |
Accepted and Agreed: | ||
Harmony Merger Corp. | ||
By: | /s/ Eric S. Rosenfeld | |
Name: Eric S. Rosenfeld | ||
Title: Chief Executive Officer |
4
Exhibit 10.6.8
December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
Harmony Merger Corp. (“Corporation”), a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned hereby commits that he will purchase an aggregate of 7,500 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase three-fourths of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $75,000 (the “Purchase Price”). At least 24 hours prior to the effective date of the Registration Statement (defined below), the undersigned will cause the Purchase Price to be delivered to Graubard Miller (“GM”), counsel for the Corporation, to hold in a non-interest bearing account until the Corporation consummates the IPO. The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall deposit the Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”).
The Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; | |
● | the Insider Units and underlying securities will not be transferable (except (i) amongst the initial purchasers of the Insider Units, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions and voting agreement set forth above) until after the completion of a Business Combination; | |
● | the Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and | |
● | the Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The undersigned further acknowledges and agrees that if, in order to consummate any Business Combination, the holders of Insider Units are required to contribute back to the capital of the Corporation a portion of any such securities to be cancelled by the Corporation, the undersigned will contribute back to the capital of the Corporation a proportionate number of Insider Units pro rata with the other holders of Insider Units.
2 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that:
(a) | it has been advised that the Insider Units have not been registered under the Securities Act; | |
(b) | it is acquiring the Insider Units for its account for investment purposes only; | |
(c) | it has no present intention of selling or otherwise disposing of the Insider Units in violation of the securities laws of the United States; | |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; | |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. | |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
3 |
Very truly yours, | |||
/s/ John Schauerman | |||
John Schauerman | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer | |||
4
Exhibit 10.6.9
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated November 21, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 135,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation for an aggregate purchase price of $1,258.67. In addition, the undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The undersigned commits to purchase an aggregate of 67,500 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $675,000 (the “Initial Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused the Initial Purchase Price to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable. However, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned commits to sell back to Eric Rosenfeld up to 20,000 Insider Shares (“Over-allotment Sale”). Such Over-allotment Sale shall be structured such that the undersigned maintains its ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Therefore, up to $100,000 of the Initial Purchase Price will be returned to the undersigned in the event that the over-allotment is exercised. If the underwriter determines that fewer Insider Units must be purchased in order to consummate the IPO based on market conditions at that time, such reduction in Insider Unit purchases shall be done on a pro-rata basis, which may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
2 |
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | up to 20,000 of the Insider Shares must be sold back to Eric Rosenfeld if the underwriters exercise their over-allotment option in the IPO, except that in the event the sale would result in a reduction in the undersigned’s ratio of Insider Shares to Insider Units, in which case a lesser number of Insider Shares will be subject to sale; | |
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; | |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); | |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
3 |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; | |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and | |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and | |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
4 |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Initial Purchase Price.
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; | |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; | |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; | |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; | |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and | |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. | |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and | |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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Very truly yours, | |||
/s/ Leonard B. Schlemm | |||
Leonard B. Schlemm | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer | |||
Graubard Miller | |||
(solely with respect to its obligations to hold |
|||
By: | /s/ Jeffrey M. Gallant | ||
Name: Jeffrey M. Gallant | |||
Title: Partner |
6
Exhibit 10.6.10
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated November 20, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 100,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation for an aggregate purchase price of $945.63. The undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The undersigned commits to purchase an aggregate of 50,000 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $500,000 (the “Initial Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused the Initial Purchase Price to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Initial Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Initial Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
2 |
In accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act, Eric Rosenfeld (“Rosenfeld”) shall place limit orders for an aggregate of no less than $500,000 of the Corporation’s common stock (the “Market-Purchased Shares”) commencing on the later of (1) two business days after the Corporation files a Form 8-K disclosing all material information relating to its initial Business Combination, and (2) 60 days after the termination of the “restricted period” in connection with the Corporation’s Initial Public Offering under Regulation M of the Securities Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved (“Buyback Period”). These limit orders will require Mr. Rosenfeld to purchase any of the Corporation’s shares of common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount held in the Trust Fund as reported in such Form 8-K, until the earlier of (1) the expiration of the Buyback Period or (2) the date such purchases reach $500,000 in total. The Corporation commits that the Buyback Period that begins as a result of the occurrence of the event described in (1) above, shall be not less than twenty (20) business days. It is intended that the purchases will satisfy the conditions of Rule 10b-18(b) under the Securities Exchange Act and the broker’s purchase obligation will otherwise be subject to applicable law, including Regulation M under the Securities Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain circumstances.
Rosenfeld agrees that the Market-Purchased Shares shall not be transferable until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Market-Purchased Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Market-Purchased Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death or (iv) pursuant to a qualified domestic relations order, in each case where the transferee agrees to foregoing transfer restrictions. Rosenfeld shall not convert the Market-Purchased Shares for cash held in the Corporation’s trust account in connection with any Business Combination. Notwithstanding anything to the contrary contained herein, if the Corporation is unable to consummate a Business Combination, Rosenfeld shall be entitled to liquidation proceeds with respect to the Market-Purchased Shares.
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
3 |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
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Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Initial Purchase Price.
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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5 |
Very truly yours, | |||
/s/ Jeff Hastings | |||
Jeff Hastings | |||
Accepted and Agreed: | |||
Harmony Merger Corp. | |||
By: | /s/ Eric S. Rosenfeld | ||
Name: Eric S. Rosenfeld | |||
Title: Chief Executive Officer | |||
/s/ Eric S. Rosenfeld | |||
Eric S. Rosenfeld | |||
Graubard Miller | |||
(solely
with respect to its obligations to hold |
|||
By: | /s/ Jeffrey M. Gallant | ||
Name: Jeffrey M. Gallant | |||
Title: Partner |
Signature page to Financial Sponsor Commitment Letter
6
Exhibit 10.6.11
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated November 26, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 231,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation at approximately $0.0087 per Insider Share, for an aggregate purchase price of $2,008.70. The undersigned hereby agrees to sell to Eric S. Rosenfeld 16,000 Insider Shares for aggregate consideration of $232.57. In addition, the undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The undersigned commits to purchase an aggregate of 95,000 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $950,000 (the “Initial Purchase Price”). Additionally, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned further commits to purchase up to an additional 12,500 Insider Units at $10.00 per Insider Unit for an aggregate purchase price of $125,000 (the “Over-Allotment Purchase Price” and together with the Initial Purchase Price, the “Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused $1,208,330 (the “Original Purchase Price”) to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable. Within 10 days of the date hereof, the Corporation shall cause GM to return to the undersigned the excess of the Original Purchase Price over the Purchase Price.
If the underwriter determines that fewer Insider Units must be purchased in order to consummate the IPO based on market conditions at that time, such reduction in Insider Unit purchases shall be done on a pro-rata basis, which may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO and over-allotment option, as applicable. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. Simultaneously with the consummation of all or any part of the over-allotment option, GM shall (i) deposit the pro-rata portion of the Over-Allotment Purchase Price, based upon the amount of the over-allotment option that has been exercised, without interest or deduction, into the Trust Fund and (ii) deliver all interest then earned on the Over-Allotment Purchase Price to the undersigned. Upon expiration of the over-allotment option, GM shall return any unused portion of the Over-Allotment Purchase Price to the undersigned, together with any remaining interest earned on the Over-Allotment Purchase Price. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
2 |
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
In accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act, Eric Rosenfeld (“Rosenfeld”) shall place limit orders for an aggregate of no less than $500,000 of the Corporation’s common stock (the “Market-Purchased Shares”) commencing on the later of (1) two business days after the Corporation files a Form 8-K disclosing all material information relating to its initial Business Combination, and (2) 60 days after the termination of the “restricted period” in connection with the Corporation’s Initial Public Offering under Regulation M of the Securities Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved (“Buyback Period”). These limit orders will require Mr. Rosenfeld to purchase any of the Corporation’s shares of common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount held in the Trust Fund as reported in such Form 8-K, until the earlier of (1) the expiration of the Buyback Period or (2) the date such purchases reach $500,000 in total. The Corporation commits that the Buyback Period that begins as a result of the occurrence of the event described in (1) above, shall be not less than twenty (20) business days. It is intended that the purchases will satisfy the conditions of Rule 10b-18(b) under the Securities Exchange Act and the broker’s purchase obligation will otherwise be subject to applicable law, including Regulation M under the Securities Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain circumstances.
Rosenfeld agrees that the Market-Purchased Shares shall not be transferable until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Market-Purchased Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Market-Purchased Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death or (iv) pursuant to a qualified domestic relations order, in each case where the transferee agrees to foregoing transfer restrictions. Rosenfeld shall not convert the Market-Purchased Shares for cash held in the Corporation’s trust account in connection with any Business Combination. Notwithstanding anything to the contrary contained herein, if the Corporation is unable to consummate a Business Combination, Rosenfeld shall be entitled to liquidation proceeds with respect to the Market-Purchased Shares.
3 |
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | up to 25,000 of the Insider Shares will be subject to forfeiture to the extent that the underwriters do not exercise their over-allotment option in the IPO in full, except in the event the forfeiture would result in a reduction in the undersigned’s ratio of Insider Shares to Insider Units, in which case a lesser number of Insider Shares will be subject to forfeiture; |
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
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● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Purchase Price.
5 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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6 |
Very truly yours, | ||||
DKU 2013 LLC | ||||
By: | /s/ Jeffrey Moses | |||
Name: Jeffrey Moses | ||||
Title: Authorized Person | ||||
Accepted and Agreed: | ||||
Harmony Merger Corp. | ||||
By: | /s/ Eric S. Rosenfeld | |||
Name: Eric S. Rosenfeld | ||||
Title: Chief Executive Officer | ||||
/s/ Eric S. Rosenfeld | ||||
Eric S. Rosenfeld | ||||
Graubard Miller | ||||
(solely
with respect to its obligations to hold |
||||
By: | /s/ Jeffrey M. Gallant | |||
Name: Jeffrey M. Gallant | ||||
Title: Partner |
Signature page to Financial Sponsor Commitment Letter
7
Exhibit 10.6.12
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated November 26, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 231,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation at approximately $0.0087 per Insider Share, for an aggregate purchase price of $2,008.70. The undersigned hereby agrees to sell to Eric S. Rosenfeld 16,000 Insider Shares for aggregate consideration of $232.57. In addition, the undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The undersigned commits to purchase an aggregate of 95,000 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $950,000 (the “Initial Purchase Price”). Additionally, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned further commits to purchase up to an additional 12,500 Insider Units at $10.00 per Insider Unit for an aggregate purchase price of $125,000 (the “Over-Allotment Purchase Price” and together with the Initial Purchase Price, the “Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused $1,208,330 (the “Original Purchase Price”) to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable. Within 10 days of the date hereof, the Corporation shall cause GM to return to the undersigned the excess of the Original Purchase Price over the Purchase Price.
If the underwriter determines that fewer Insider Units must be purchased in order to consummate the IPO based on market conditions at that time, such reduction in Insider Unit purchases shall be done on a pro-rata basis, which may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO and over-allotment option, as applicable. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. Simultaneously with the consummation of all or any part of the over-allotment option, GM shall (i) deposit the pro-rata portion of the Over-Allotment Purchase Price, based upon the amount of the over-allotment option that has been exercised, without interest or deduction, into the Trust Fund and (ii) deliver all interest then earned on the Over-Allotment Purchase Price to the undersigned. Upon expiration of the over-allotment option, GM shall return any unused portion of the Over-Allotment Purchase Price to the undersigned, together with any remaining interest earned on the Over-Allotment Purchase Price. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
2 |
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
In accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act, Eric Rosenfeld (“Rosenfeld”) shall place limit orders for an aggregate of no less than $500,000 of the Corporation’s common stock (the “Market-Purchased Shares”) commencing on the later of (1) two business days after the Corporation files a Form 8-K disclosing all material information relating to its initial Business Combination, and (2) 60 days after the termination of the “restricted period” in connection with the Corporation’s Initial Public Offering under Regulation M of the Securities Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved (“Buyback Period”). These limit orders will require Mr. Rosenfeld to purchase any of the Corporation’s shares of common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount held in the Trust Fund as reported in such Form 8-K, until the earlier of (1) the expiration of the Buyback Period or (2) the date such purchases reach $500,000 in total. The Corporation commits that the Buyback Period that begins as a result of the occurrence of the event described in (1) above, shall be not less than twenty (20) business days. It is intended that the purchases will satisfy the conditions of Rule 10b-18(b) under the Securities Exchange Act and the broker’s purchase obligation will otherwise be subject to applicable law, including Regulation M under the Securities Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain circumstances.
Rosenfeld agrees that the Market-Purchased Shares shall not be transferable until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Market-Purchased Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Market-Purchased Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death or (iv) pursuant to a qualified domestic relations order, in each case where the transferee agrees to foregoing transfer restrictions. Rosenfeld shall not convert the Market-Purchased Shares for cash held in the Corporation’s trust account in connection with any Business Combination. Notwithstanding anything to the contrary contained herein, if the Corporation is unable to consummate a Business Combination, Rosenfeld shall be entitled to liquidation proceeds with respect to the Market-Purchased Shares.
3 |
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | up to 25,000 of the Insider Shares will be subject to forfeiture to the extent that the underwriters do not exercise their over-allotment option in the IPO in full, except in the event the forfeiture would result in a reduction in the undersigned’s ratio of Insider Shares to Insider Units, in which case a lesser number of Insider Shares will be subject to forfeiture; |
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
4 |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Purchase Price.
5 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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6 |
Very truly yours, | ||||
The K2 Principal Fund L.P. | ||||
By: | /s/ Shawn Kimmel | |||
Name: Shawn Kimmel | ||||
Title: Managing Partner | ||||
Accepted and Agreed: | ||||
Harmony Merger Corp. | ||||
By: | /s/ Eric S. Rosenfeld | |||
Name: Eric S. Rosenfeld | ||||
Title: Chief Executive Officer | ||||
/s/ Eric S. Rosenfeld | ||||
Eric S. Rosenfeld | ||||
Graubard Miller | ||||
(solely with respect to its obligations to hold and disburse monies for the Insider Units) |
||||
By: | /s/ Jeffrey M. Gallant | |||
Name: Jeffrey M. Gallant | ||||
Title: Partner |
Signature page to Financial Sponsor Commitment Letter
7
Exhibit 10.6.13
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated November 26, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 231,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation at approximately $0.0087 per Insider Share, for an aggregate purchase price of $2,008.70. The undersigned hereby agrees to sell to Eric S. Rosenfeld 16,000 Insider Shares for aggregate consideration of $232.57. In addition, the undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The undersigned commits to purchase an aggregate of 95,000 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $950,000 (the “Initial Purchase Price”). Additionally, if the underwriters in the IPO exercise their over-allotment option in full or part, the undersigned further commits to purchase up to an additional 12,500 Insider Units at $10.00 per Insider Unit for an aggregate purchase price of $125,000 (the “Over-Allotment Purchase Price” and together with the Initial Purchase Price, the “Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused $1,208,330 (the “Original Purchase Price”) to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable. Within 10 days of the date hereof, the Corporation shall cause GM to return to the undersigned the excess of the Original Purchase Price over the Purchase Price.
If the underwriter determines that fewer Insider Units must be purchased in order to consummate the IPO based on market conditions at that time, such reduction in Insider Unit purchases shall be done on a pro-rata basis, which may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO and over-allotment option, as applicable. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. Simultaneously with the consummation of all or any part of the over-allotment option, GM shall (i) deposit the pro-rata portion of the Over-Allotment Purchase Price, based upon the amount of the over-allotment option that has been exercised, without interest or deduction, into the Trust Fund and (ii) deliver all interest then earned on the Over-Allotment Purchase Price to the undersigned. Upon expiration of the over-allotment option, GM shall return any unused portion of the Over-Allotment Purchase Price to the undersigned, together with any remaining interest earned on the Over-Allotment Purchase Price. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
2 |
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
In accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act, Eric Rosenfeld (“Rosenfeld”) shall place limit orders for an aggregate of no less than $500,000 of the Corporation’s common stock (the “Market-Purchased Shares”) commencing on the later of (1) two business days after the Corporation files a Form 8-K disclosing all material information relating to its initial Business Combination, and (2) 60 days after the termination of the “restricted period” in connection with the Corporation’s Initial Public Offering under Regulation M of the Securities Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved (“Buyback Period”). These limit orders will require Mr. Rosenfeld to purchase any of the Corporation’s shares of common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount held in the Trust Fund as reported in such Form 8-K, until the earlier of (1) the expiration of the Buyback Period or (2) the date such purchases reach $500,000 in total. The Corporation commits that the Buyback Period that begins as a result of the occurrence of the event described in (1) above, shall be not less than twenty (20) business days. It is intended that the purchases will satisfy the conditions of Rule 10b-18(b) under the Securities Exchange Act and the broker’s purchase obligation will otherwise be subject to applicable law, including Regulation M under the Securities Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain circumstances.
Rosenfeld agrees that the Market-Purchased Shares shall not be transferable until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Market-Purchased Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Market-Purchased Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death or (iv) pursuant to a qualified domestic relations order, in each case where the transferee agrees to foregoing transfer restrictions. Rosenfeld shall not convert the Market-Purchased Shares for cash held in the Corporation’s trust account in connection with any Business Combination. Notwithstanding anything to the contrary contained herein, if the Corporation is unable to consummate a Business Combination, Rosenfeld shall be entitled to liquidation proceeds with respect to the Market-Purchased Shares.
3 |
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | up to 25,000 of the Insider Shares will be subject to forfeiture to the extent that the underwriters do not exercise their over-allotment option in the IPO in full, except in the event the forfeiture would result in a reduction in the undersigned’s ratio of Insider Shares to Insider Units, in which case a lesser number of Insider Shares will be subject to forfeiture; |
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
4 |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Purchase Price.
5 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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6 |
Very truly yours, | ||||
NPIC Limited, by its investment
advisor, | ||||
By: | /s/ Greg Lemaich | |||
Name: Greg Lemaich | ||||
Title:VP Legal | ||||
Accepted and Agreed: | ||||
Harmony Merger Corp. | ||||
By: | /s/ Eric S. Rosenfeld | |||
Name: Eric S. Rosenfeld | ||||
Title: Chief Executive Officer | ||||
/s/ Eric S. Rosenfeld | ||||
Eric S. Rosenfeld | ||||
Graubard Miller | ||||
(solely
with respect to its obligations to hold |
||||
By: | /s/ Jeffrey M. Gallant | |||
Name: Jeffrey M. Gallant | ||||
Title: Partner |
Signature page to Financial Sponsor Commitment Letter
7
Exhibit 10.6.14
Amended and Restated as of December 31, 2014
Harmony Merger Corp.
777 Third Avenue, 37th Floor
New York, New York 10017
Gentlemen:
This letter agreement amends and restates the letter agreement (the “Original Agreement”) dated December 3, 2014 among Harmony Merger Corp. (the “Corporation”), the undersigned and Graubard Miller (“GM”), counsel to the Corporation, in its entirety and the Original Agreement shall be deemed to have been superseded and replaced in their entirety by this letter agreement.
The Corporation, a blank check company formed for the purpose of acquiring one or more businesses or entities (a “Business Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in connection with its initial public offering (“IPO”).
The undersigned previously purchased an aggregate of 180,000 shares (“Insider Shares”) of common stock of the Corporation, par value $.0001 per share (“Common Stock”), of the Corporation at approximately $0.009456 per Insider Share, for an aggregate purchase price of $1,702.13. The undersigned acknowledges and agrees that if the underwriters in the IPO determine the size of the offering should be increased or decreased, the undersigned will either receive a dividend on its Insider Shares or contribute a portion of the Insider Shares back to capital, as applicable, in order to maintain the aggregate ownership of the Corporation’s initial stockholders at a certain percentage of the number of shares to be sold in the IPO. Any decrease in the size of the offering will affect all holders of Insider Shares on a pro-rata basis, except to the extent necessary to maintain the undersigned’s ratio of two (2) Insider Shares for every one (1) Insider Unit purchased. Any increase in the size of the offering will affect all of the holders of Insider Shares on a pro-rata basis, such that any share dividend may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased. For the avoidance of doubt, the undersigned shall not be required to forfeit any of its Insider Shares in the event that the underwriters’ over-allotment option is not exercised in full or in part.
The undersigned further commits to purchase an aggregate of 90,000 units of the Corporation (“Insider Units”), each Insider Unit consisting of one share of Common Stock and one warrant (“Warrant”) to purchase, in the five years following a Business Combination, three-fourths (3/4) of one share of Common Stock for $11.50 per whole share, for an aggregate purchase price of $900,000 (the “Initial Purchase Price”). Pursuant to the Original Agreement, the undersigned has caused the Initial Purchase Price to be delivered to GM, to hold in an interest bearing account until the Corporation consummates the IPO and over-allotment option, if any, together with an originally executed Form W-9, W-8BEN or W-81MY, as applicable.
If the underwriter determines that fewer Insider Units must be purchased in order to consummate the IPO based on market conditions at that time, such reduction in Insider Unit purchases shall be done on a pro-rata basis, which may result in the undersigned receiving more than two Insider Shares for every one Insider Unit purchased.
The consummation of the purchase and issuance of the Insider Units shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation of the IPO, GM shall (i) deposit the Initial Purchase Price, without interest or deduction, into the trust fund (“Trust Fund”) established by the Corporation for the benefit of the Corporation’s public stockholders as described in the Corporation’s registration statement filed in connection with the IPO (“Registration Statement”) and (ii) deliver all interest earned on the Initial Purchase Price to the undersigned. If the Corporation does not complete the IPO on or before December 23, 2014 (subject to a six (6) month extension at the Corporation’s option in its sole discretion), the Purchase Price (plus interest earned thereon) will be returned to the undersigned.
Each of the Corporation and the undersigned acknowledges and agrees that GM is serving hereunder solely as a convenience to the parties to facilitate the purchase of the Insider Units and GM’s sole obligation under this letter agreement is to act with respect to holding and disbursing the Purchase Price for the Insider Units as described above. GM shall not be liable to the Corporation or the undersigned or any other person or entity in respect of any act or failure to act hereunder or otherwise in connection with performing its services hereunder unless GM has acted in a manner constituting gross negligence or willful misconduct. The Corporation shall indemnify GM against any claim made against it (including reasonable attorney’s fees) by reason of it acting or failing to act in connection with this letter agreement except as a result of its gross negligence or willful misconduct. GM may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. Notwithstanding anything to the contrary contained herein, GM agrees that it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Fund (“Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the Trust Fund for any reason whatsoever.
The Corporation has not entered into, and will not enter into, without the prior consent of 2/3 in value of the Insider Units held by the Sponsor Group (defined below), prior to the consummation of a Business Combination, any letter or similar agreement with any other investor or prospective investor in the Corporation (each, a “New Investor”) that has the direct or indirect effect of establishing terms, rights, or benefits for such New Investor (or any affiliate or associate thereof) in a manner more favorable to such New Investor than the terms, rights, and benefits established in favor of the undersigned (a “More Favorable Arrangement”). If the Corporation receives approval from the Sponsor Group as described in the immediately preceding sentence, it will offer the undersigned and the other members of the Sponsor Group the right to assume all, or participate in part, of the obligations pursuant to such More Favorable Arrangement, pro rata with the other members of the Sponsor Group, on the same terms as it offers such New Investor. If the undersigned does not indicate its intention to assume all, or participate in part, of the obligations of such More Favorable Arrangement within three business days, the Corporation shall be free to offer such More Favorable Arrangement to any New Investor it wishes.
The Corporation shall not, without the prior written consent of the undersigned, use in any advertising, publicity, marketing materials, other similar communication to third parties, or in any other public use, as such, the names, brands or trademarks of the undersigned or any of its affiliates, officers, directors and employees, provided that the name of the holder of Insider Shares and Insider Units may be used in any prospectus or other regulatory filing in connection with the IPO.
1 |
In accordance with the guidelines of Rule 10b5-1 of the Securities Exchange Act, Eric Rosenfeld (“Rosenfeld”) shall place limit orders for an aggregate of no less than $500,000 of the Corporation’s common stock (the “Market-Purchased Shares”) commencing on the later of (1) two business days after the Corporation files a Form 8-K disclosing all material information relating to its initial Business Combination, and (2) 60 days after the termination of the “restricted period” in connection with the Corporation’s Initial Public Offering under Regulation M of the Securities Exchange Act, and ending on the record date for the shareholder meeting at which such initial Business Combination is to be approved (“Buyback Period”). These limit orders will require Mr. Rosenfeld to purchase any of the Corporation’s shares of common stock offered for sale (and not purchased by another investor) at or below a price equal to the per-share amount held in the Trust Fund as reported in such Form 8-K, until the earlier of (1) the expiration of the Buyback Period or (2) the date such purchases reach $500,000 in total. The Corporation commits that the Buyback Period that begins as a result of the occurrence of the event described in (1) above, shall be not less than twenty (20) business days. It is intended that the purchases will satisfy the conditions of Rule 10b-18(b) under the Securities Exchange Act and the broker’s purchase obligation will otherwise be subject to applicable law, including Regulation M under the Securities Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in certain circumstances.
Rosenfeld agrees that the Market-Purchased Shares shall not be transferable until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Market-Purchased Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Market-Purchased Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death or (iv) pursuant to a qualified domestic relations order, in each case where the transferee agrees to foregoing transfer restrictions. Rosenfeld shall not convert the Market-Purchased Shares for cash held in the Corporation’s trust account in connection with any Business Combination. Notwithstanding anything to the contrary contained herein, if the Corporation is unable to consummate a Business Combination, Rosenfeld shall be entitled to liquidation proceeds with respect to the Market-Purchased Shares.
The Insider Shares will be identical to the shares of Common Stock included in the units to be sold by the Corporation in the IPO, and the Insider Units will be identical to the units to be sold by the Corporation in the IPO, except that:
● | the undersigned agrees to vote the Insider Shares and shares of Common Stock included in the Insider Units in favor of any proposed Business Combination; |
3 |
● | all Insider Shares (including those held by other Holders (as defined below) will be placed in escrow, subject to the terms of an escrow agreement reasonably acceptable to the undersigned, and will not be released (subject to certain exceptions) until (A) the earlier of one year after the completion of a Business Combination and the date on which the closing price of the Common Stock exceeds $12.50 for any 20 trading days within a 30-trading day period following the completion of a Business Combination with respect to 50% of the Insider Shares and (B) one year after the completion of a Business Combination with respect to the remaining 50% of the Insider Shares, and may only be transferred during this time period (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Shares were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the escrow agreement and the voting requirements set forth above); |
● | all Insider Units and underlying securities (including Insider Units and underlying securities held by other Holders) will not be transferable (except (i) amongst the initial purchasers of the Insider Shares, to the Corporation’s officers, directors and employees, to a holder’s affiliates, or to its members upon its liquidation, (ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic relations order, (v) by private sales made in connection with the consummation of a Business Combination at prices no greater than the price at which the Insider Units were originally purchased or (vi) to the Corporation for cancellation in connection with the consummation of a Business Combination, in each case (except for clause (vi)) where the transferee agrees to the terms of the transfer restrictions) until after the completion of a Business Combination; |
4 |
● | the Insider Shares and Insider Units will be subject to customary registration rights, which shall be described in the Registration Statement; |
● | the undersigned will not participate in any liquidation distribution with respect to the Insider Shares or Insider Units (but will participate in liquidation distributions with respect to any units or shares of Common Stock purchased by the undersigned in the IPO or in the open market) if the Corporation fails to consummate a Business Combination; and |
● | the Insider Shares and Insider Units will include any additional terms or restrictions as is customary in other similarly structured blank check company offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth in the Registration Statement. |
The Company also agrees that so long as the Warrants included in the Private Units continue to be held by the undersigned or its permitted transferees, the Company will not redeem such Warrants and will permit the undersigned or its permitted transferees to exercise such Warrants on a cashless basis by surrendering such 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 exercise price of the Warrants and the “Fair Market Value” by (y) the Fair Market Value; provided, however, that no cashless exercise shall be permitted unless the Fair Market Value is higher than the exercise price. Solely for purposes of this agreement, the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the day prior to the Company’s receipt of the applicable exercise notice. Additionally, because the Warrants included in the Private Units are being issued in a private transaction, they may be exercisable by the undersigned or its permitted transferees for unregistered ordinary shares even if the prospectus relating to the ordinary shares issuable upon exercise of the Warrants is not current and effective.
Each of the undersigned and the Corporation acknowledges and agrees that, in order to consummate any Business Combination, the holders of Insider Shares or Insider Units (“Holders”) may be required to contribute back to the capital of the Corporation a portion of any such securities for cancellation and that such contributions will occur as follows:
● | first, all Holders other than DKU 2013 LLC, The K2 Principal Fund L.P., NPIC Limited, Covalent Capital Partners Master Fund, L.P., Jeff Hastings, and Leonard Schlemm (collectively, the “Sponsor Group”), until all Holders have the same ratio of Insider Shares to Insider Units; and |
● | second, all Holders including the members of the Sponsor Group, pro rata based on the number of Insider Shares or Insider Units, as applicable, held by each Holder after giving effect to (i) above, such that in all cases the ratio of Insider Shares to Insider Units is equal. |
Notwithstanding anything to the contrary contained herein, the undersigned’s liability arising out of or related to this letter agreement shall not exceed the Purchase Price.
5 |
The undersigned acknowledges and agrees that it will execute agreements in form and substance typical for transactions of this nature necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to the undersigned, including but not limited to (i) an insider letter, (ii) an escrow agreement and (iii) a registration rights agreement.
The undersigned hereby represents and warrants that, as applicable:
(a) | it has been advised that the Insider Shares and Insider Units have not been registered under the Securities Act; |
(b) | it is acquiring the Insider Shares and Insider Units for its account for investment purposes only; |
(c) | it has no present intention of selling or otherwise disposing of the Insider Shares and Insider Units in violation of the securities laws of the United States; |
(d) | it is an “accredited investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended; |
(e) | it has had both the opportunity to ask questions and receive answers from the officers and directors of the Corporation and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder; and |
(f) | it is familiar with the proposed business, management, financial condition and affairs of the Corporation. |
(g) | it has full power, authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions contemplated in this letter; and |
(h) | this letter constitutes its respective legal, valid and binding obligation, and is enforceable against it. |
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6 |
Very truly yours, | ||||
By: | /s/ William C. Stone, Jr. | |||
Name: William C. Stone, Jr. | ||||
Title: Authorized Signatory of Covalent Capital Partners Master Fund, L.P. acting by and through Covalent Partners LLC in its capacity as investment advisor | ||||
Accepted and Agreed: | ||||
Harmony Merger Corp. | ||||
By: | /s/ Eric S. Rosenfeld | |||
Name: Eric S. Rosenfeld | ||||
Title: Chief Executive Officer | ||||
/s/ Eric S. Rosenfeld | ||||
Eric S. Rosenfeld | ||||
Graubard Miller | ||||
(solely with respect to its obligations to hold and disburse monies for the Insider Units) |
||||
By: | /s/ Jeffrey M. Gallant | |||
Name: Jeffrey M. Gallant | ||||
Title: Partner |
Signature page to Financial Sponsor Commitment Letter
7
Exhibit 10.8
350 Madison Avenue
New York, NY
United States of America
T : : 212-849-3900
F : 212-389-8880
www.canaccordgenuity.com
CONFIDENTIAL
December 30, 2014
Harmony Merger Corp.
777 Third
Avenue, 37th Floor
New York, NY 10017
Attention: | Eric S. Rosenfeld Chairman & CEO |
Dear Mr. Rosenfeld:
This letter agreement (the “Agreement”) will confirm our understanding of the terms and conditions under which Canaccord Genuity Inc. (“Canaccord Genuity”) will provide Harmony Merger Corp. (together with its subsidiaries and affiliates, the “Company”) with certain financial advisory services in connection with a preliminary review of potential merger and acquisition opportunities, or other services as reasonably requested by the Company and mutually agreeable by Canaccord Genuity. In consideration of such services for a period of up to 18 months starting the date of its initial public offering (the “IPO”), the Company desires to pay Canaccord Genuity a fee for such services of $175,000, which amount shall be payable in cash on the closing date of its IPO.
Cannaccord Genuity understands that the Company will establish a trust account for the benefit of its public stockholders and that, except for the interest earned on the amounts held in such trust account, the Company may disburse monies from the trust account only: (i) to the public stockholders in the event they elect to convert their shares, (ii) to the public stockholders upon the liquidation of the trust account if the Company fails to consummate a business combination within the required time period or (iii) to the Company after, or concurrently with, the consummation of a business combination. For and in consideration of the Company agreeing to engage Canaccord Genuity hereunder, Cannacord Genuity hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the trust account (each, a “Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against the trust account for any reason whatsoever. This provision shall survive the termination of this Agreement for any reason.
Subject to the immediately preceding paragraph and in consideration of and as a condition precedent to Canaccord Genuity providing the services set forth in this letter, the Company agrees to the indemnification provisions and other matters set forth in Annex A, which is incorporated by reference into this Agreement.
Nothing in this agreement shall obligate the Company to retain Canaccord Genuity for any other services after the date hereof, nor shall Canaccord Genuity be obligated to provide any such services. Any future services shall be the subject of a separate agreement between the parties in a form satisfactory to each in its sole discretion.
350 Madison Avenue
New York, NY
United States of America
T : : 212-849-3900
F : 212-389-8880
www.canaccordgenuity.com
If you are in agreement with the foregoing, please sign where indicated below and return to the undersigned.
Sincerely,
CANACCORD GENUITY INC.
By: | /s/ Henry P. Williams | |
Henry P. Williams | ||
Managing Director |
ACCEPTED AND AGREED:
Harmony Merger Corp.
By: | /s/ Eric S. Rosenfeld | |
Eric S. Rosenfeld | ||
Chairman & CEO |
350 Madison Avenue
New York, NY
United States of America
T : : 212-849-3900
F : 212-389-8880
www.canaccordgenuity.com
ANNEX A
Subject to the second paragraph of the letter agreement of which this Annex A is an attachment (the “Agreement”), in the event that Canaccord Genuity Inc. or any of its affiliates (“Canaccord Genuity”), the respective shareholders, directors, officers, agents or employees of Canaccord Genuity, or any other person controlling Canaccord Genuity (collectively, together with Canaccord Genuity, “Indemnified Persons”) becomes involved in any capacity in any action, claim, suit, investigation or proceeding, actual or threatened, brought by or against any person, including stockholders of Harmony Merger Corp. (the “Company”), in connection with or as a result of the engagement (the “engagement”) contemplated by the Agreement, the Company will reimburse such Indemnified Person for its legal and other expenses (including without limitation the costs and expenses incurred in connection with investigating, preparing for and responding to third party subpoenas or enforcing the engagement) incurred in connection therewith as such expenses are incurred; provided, however, that if it is finally determined by a court or arbitral tribunal in any such action, claim, suit, investigation or proceeding that any loss, claim damage or liability of Canaccord Genuity or any other Indemnified Person has resulted primarily and directly from the gross negligence or willful misconduct of Canaccord Genuity in performing the services that are the subject of the engagement, then Canaccord Genuity will repay such portion of reimbursed amounts that is attributable to expenses incurred in relation to the act or omission of Canaccord Genuity or any other Indemnified Person which is the subject of such determination. The Company will also indemnify and hold harmless each Indemnified Person from and against any losses, claims, damages or liabilities (including actions or proceedings in respect thereof) (collectively, “Losses”) related to or arising out of the engagement, except to the extent any such Losses are finally determined by a court or arbitral tribunal to have resulted primarily and directly from the willful misconduct or gross negligence of Canaccord Genuity in performing the services that are the subject of the engagement.
If such indemnification is for any reason not available or insufficient to hold an Indemnified Person harmless (except by reason of the gross negligence or willful misconduct of Canaccord Genuity), the Company and Canaccord Genuity shall contribute to the Losses involved in such proportion as is appropriate to reflect the relative benefits received (or anticipated to be received) by the Company, on the one hand, and by Canaccord Genuity, on the other hand, with respect to the engagement or, if such allocation is determined by a court or arbitral tribunal to be unavailable, in such proportion as is appropriate to reflect other equitable considerations such as the relative fault of the Company on the one hand and of Canaccord Genuity on the other hand; provided, however, that in no event shall the amounts to be contributed by Canaccord Genuity exceed the fees actually received by Canaccord Genuity in the engagement. Relative benefits to the Company, on the one hand, and Canaccord Genuity, on the other hand, shall be deemed to be in the same proportion as (i) the total value paid or proposed to be paid or received or proposed to be received by the Company or its security holders, as the case may be, pursuant to the transaction(s), whether or not consummated, contemplated by the engagement, bears to (ii) all fees actually received by Canaccord Genuity in the engagement.
The Company also agrees that neither Canaccord Genuity nor any other Indemnified Person shall have any liability to the Company or any person asserting claims on behalf or in right of the Company in connection with or as a result of the engagement or any matter referred to in the engagement, except to the extent that any Losses incurred by the Company are finally determined by a court or arbitral tribunal to have resulted primarily and directly from the willful misconduct or gross negligence of Canaccord Genuity in performing the services that are the subject of the engagement. In no event shall Canaccord Genuity or any other Indemnified Person be responsible for any indirect, special or consequential damages, even if advised of the possibility thereof.
350 Madison Avenue
New York, NY
United States of America
T : : 212-849-3900
F : 212-389-8880
www.canaccordgenuity.com
The Company’s obligations hereunder shall be in addition to any rights that any Indemnified Person may have at common law or otherwise. The letter to which this Annex A is attached, including this Annex A, and any other agreements relating to the engagement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed therein and, in connection therewith, the parties hereto consent to the exclusive jurisdiction of the state and federal courts of the State of New York. CANACCORD GENUITY HEREBY AGREES, AND THE COMPANY HEREBY AGREES ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS SECURITY HOLDERS, TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF THE ENGAGEMENT OR CANACCORD GENUITY’S PERFORMANCE OF SERVICES THAT ARE THE SUBJECT THEREOF.
The provisions of this Annex A shall apply to the engagement (including related activities prior to the date hereof) and any modification thereof and shall remain in full force and effect regardless of the completion or termination of the engagement. If any term, provision, covenant or restriction herein is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of Harmony Merger Corp. (the Company) on Amendment No. 4 to Form S-1, File No. 333-197330, of our report dated July 9, 2014, except for Note 3 as to which the date is October 10, 2014 and Notes 1, 6 and 7 as to which the date is November 26, 2014, which includes an explanatory paragraph as to the Companys ability to continue as a going concern, with respect to our audit of the financial statements of Harmony Merger Corp. as of May 31, 2014 and for the period from May 21, 2014 (inception) through May 31, 2014, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading Experts in such Prospectus.
/s/ Marcum llp
Marcum llp
New York ,NY
December 31, 2014