IPO and Framework Transactions (10/23/07)
On October 23, 2007, the Company sold 41,400,000 units ("Units") in the Public Offering at a price of $10 per Unit, including 5,400,000 Units sold by the underwriters in their exercise of the full amount of their over-allotment option. Each Unit consists of one share of the Company's common stock and one warrant.
Simultaneously with the consummation of the Public Offering, the Sponsor purchased 8,000,000 Private Placement Warrants at a purchase price of $1.00 per warrant. The proceeds of $8 million were placed in a trust account (the "Trust Account"). The Private Placement Warrants were identical to the warrants sold in the Public Offering except that the Private Placement Warrants are exercisable on a cashless basis as long as they are still held by the Sponsor or its permitted transferees. The purchase price of the Private Placement Warrants approximated the fair value of such warrants at the purchase date.
The Company has the right to redeem all of the warrants it issued in the Public Offering or the Private Placement Warrants, at a price of $0.01 per warrant upon 30 days' notice while the warrants are exercisable, only in the event that the last sale price of the common stock is at least a specified price, as described below.
In accordance with the warrant agreement relating to the warrants sold and issued in the Public Offering and the Private Placement Warrants, the Company is only required to use its best efforts to maintain an effective registration statement covering the warrants. The Company will not be obligated to deliver shares securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Consequently, the warrants may expire unexercised and unredeemed. Additionally, in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the exercise of a warrant issued in the Public Offering.
As a result of the Framework Transactions that were consummated on October 20, 2009, certain terms of the warrants were amended as follows:
· The exercise price of the warrants was increased to $12.00 from $7.50 per share.
· The expiration date of the warrants was extended from October 17, 2011 to October 23, 2014.
· The price at which the Company's common stock must trade before the Company is able to redeem the warrants it issued in the Public Offering increased from $14.25 to $18.75.
· The price at which the Company's common stock must trade before the Company is able to redeem the Private Placement Warrants increased from $14.25 to (x) $22.00, as long as they are held by the Sponsor or its members, members of its members' immediate families or their controlled affiliates, or (y) $18.75.
· To provide that a warrantholder's ability to exercise warrants is limited to ensure that such holder's "Beneficial Ownership" or "Constructive Ownership," each as defined in the Company's certificate of incorporation, does not exceed the restrictions contained in the certificate of incorporation limiting the ownership of shares of the Company's common stock.
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