Exhibit 10.26
INSIDER WARRANT EXCHANGE AGREEMENT
     This INSIDER WARRANT EXCHANGE AGREEMENT (the “Agreement”), is dated as of
May 5, 2011, by and among 57th Street General Acquisition Corp., a Delaware
corporation (“Parent”) and 57th Street GAC Holdings LLC (the “Parent Founder”),
Morgan Joseph TriArtisan LLC, Ladenburg Thalmann & Co. Inc., I-Bankers
Securities Incorporated, Maxim Group LLC and Rodman & Renshaw, LLC (each a
“Holder” and collectively, the “Holders”). Capitalized terms used and not
defined herein shall have the meanings ascribed thereto in the Business
Combination Agreement (as defined below).
     WHEREAS, under the terms of that certain Business Combination Agreement,
dated as of January 9, 2011, as amended by that certain Amendment to Business
Combination Agreement, dated February 18, 2011, Amendment No. 2 to Business
Combination Agreement, dated March 17, 2011 and Amendment No. 3 to the Business
Combination Agreement dated April 7, 2011 (the “Business Combination
Agreement”), Holders have agreed to exchange an aggregate of 3,700,000 sponsor
warrants held by Holders (the “Sponsor Warrants”) for an aggregate of 370,000
shares of common stock, par value $.0001 per share, of Parent (such shares of
common stock, the “Shares”); and
     WHEREAS, Parent desires to exchange the Shares for the Sponsor Warrants
held by Holders, and the Holders desire to exchange their Sponsor Warrants for
Shares pursuant to the terms hereof (such transaction, the “Exchange”);
     WHEREAS, concurrently with execution hereof, (1) the Holders and Parent are
entering into “lock-up” agreements attached hereto as Exhibit B (each, an
“Insider Warrant Holder Lock-Up Agreement”) whereby all of the Shares shall be
subject to transfer restrictions as set forth therein and (2) the Holders,
Parent and certain other parties thereto are entering into that certain
Registration Rights Agreement attached hereto as Exhibit C (the “Registration
Rights Agreement”);
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions contained herein and the Insider Warrant Lock Up Agreement and
the Registration Rights Agreement, the parties hereto hereby agree as follows:
1. EXCHANGE OF SPONSOR WARRANTS FOR SHARES. Parent hereby agrees to exchange
with the Holders, and the Holders hereby agree to exchange with Parent, Sponsor
Warrants for the Shares, free and clear of any and all liens, security
interests, claims, charges or encumbrances of any nature whatsoever. The amount
of Sponsor Warrants held by each Holder, and the number of Shares issuable in
the Exchange, are set forth in Exhibit A hereto.
2. CLOSING OF SALE OF SHARES; CLOSING DELIVERABLES. The closing (the “Closing”)
of the Exchange shall take place with respect to (A) 2,480,000 of the Sponsor
Warrants on the later of (i) the 11th Business Day following the Expiration Date

1

--------------------------------------------------------------------------------

 

of the Tender Offer or (ii) the first day upon which such Sponsor Warrants may
be released under that certain Escrow Agreement, dated May 19, 2010, between the
Parent Founder, the Underwriter Group and Continental Stock Transfer & Trust
Company (the “IPO Escrow Agreement”) (and subject to the terms of the IPO Escrow
Agreement), and (B) 1,020,000 Sponsor Warrants held by the Underwriter and
200,000 Sponsor Warrants held by the Underwriter Group on the later of
(i) May 16, 2011, (ii) the 11th Business Day following the Expiration Date of
the Tender Offer or (iii) the first day upon which such Sponsor Warrants may be
released under the IPO Escrow Agreement (and subject to the terms of the IPO
Escrow Agreement; each such date a “Closing Date”), in each case at the offices
of Ellenoff Grossman & Schole, LLP, 150 East 42nd Street, New York, New York
10017 or at such other place or time as the parties hereto may mutually agree
upon. At the relevant Closing, (i) the Holders shall surrender the Sponsor
Warrants (or execute such irrevocable instructions regarding the disposition of
the Sponsor Warrants as shall be reasonably acceptable to Parent) and such other
documentation, instruments, certificates and agreements as may be reasonably
required by Parent and (ii) Parent shall deliver stock certificates evidencing
the Shares issued to Holders. Following the Closing, Parent shall cancel the
Sponsor Warrants surrendered by the Holders.
3. REPRESENTATIONS, COVENANTS AND WARRANTIES OF HOLDERS.
     Each Holder represents and warrants, severally and not jointly, to Parent
as follows:
     A. This Agreement and Insider Warrant Lock-Up Agreement to which it is a
party are valid and binding obligations of the Holder, enforceable against
Holder in accordance with their respective terms (except to the extent that
enforcement may be affected by bankruptcy, reorganization, insolvency and
creditors’ rights and by the availability of injunctive relief, specific
performance and other equitable remedies).
     B. The execution, delivery and performance by Holder of this Agreement and
Insider Warrant Lock-Up Agreement to which it is a party will not result in any
violation of and will not conflict with, or result in a breach of, any of the
terms of, or constitute a default under, any provision of any applicable law to
which Holder is subject, any mortgage, indenture, agreement, document,
instrument, judgment, decree, order, rule or regulation, or other restriction to
which Holder is a party or by which Holder may be bound, or result in the
creation of any lien upon any of the properties or assets of Holder pursuant to
any such term, or result in the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
Holder or any of Holder’s assets or properties.
     C. Holder is an “accredited investor” as defined by Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”). Holder acknowledges that it has such knowledge and experience in
financial and business matters that Holder is capable of evaluating the merits
and risks of an investment in the Shares and of making an informed investment
decision with respect thereto. Holder acknowledges that an investment in the
Shares is speculative and involves a high degree of risk and that Holder can
bear such economic risk, including a total loss of its

2

--------------------------------------------------------------------------------

 

investment. Holder is experienced in evaluating and investing in companies such
as Parent.
     D. Holder is acquiring the Shares for its own account and not with a view
to their distribution within the meaning of Section 2(11) of the Securities Act.
Holder understands that such Shares are not registered under the Securities Act
or any state securities laws, inasmuch as they are being acquired from Parent in
a transaction not involving a public offering, and that under such laws and
applicable regulations such Shares may not be resold without registration under
the Securities Act, unless pursuant to exemptions from registration under the
Securities Act and any state securities laws.
     D. Holder is aware that the Shares are and will be, when issued,
“restricted securities” as that term is defined in Rule 144 of the general rules
and regulations under the Act and will be subject to the transfer restrictions
in the Insider Warrant Lock-Up Agreement applicable to such Holder.
     E. Holder understands that any and all certificates representing the Shares
and any and all securities issued in replacement thereof or in exchange therefor
shall bear the following legend or one substantially similar thereto, which
Holder has read and understands:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL
BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) THE HOLDER SHALL DELIVER
TO THE COMPANY AN OPINION OF ITS COUNSEL, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY AND REASONABLY CONCURRED IN BY THE COMPANY’S COUNSEL,
THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND
NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNLESS IN COMPLIANCE WITH, A LOCK-UP AGREEMENT, DATED MAY 5, 2011
BETWEEN THE COMPANY AND THE HOLDER.”
4. REPRESENTATIONS, COVENANTS AND WARRANTIES OF PARENT.
     Parent represents and warrants to each Holder as follows:
     A. Parent is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or

3

--------------------------------------------------------------------------------

 

organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted and as
anticipated to be conducted. Parent is not in violation or default of any of the
provisions of its certificate or articles of incorporation, bylaws or other
organizational or charter documents. Parent is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary.
     B. Parent has the full power and authority, corporate or otherwise, to
enter into this Agreement. The execution, delivery and performance by Parent of
this Agreement have been authorized by all requisite corporate action of Parent
and will not result in any violation of and will not conflict with, or result in
a breach of, any of the terms of, or constitute a default under, any provision
of the charter or other governing documents of Parent, any applicable law to
which Parent is subject, any mortgage, indenture, agreement, document,
instrument, judgment, decree, order, rule or regulation, or other restriction to
which Parent is a party or by which Parent may be bound, or result in the
creation of any lien upon any of the properties or assets of Parent pursuant to
any such term, or result in the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
Parent or any of Parent’s assets or properties.
     C. This Agreement is the valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms (except to the extent
that enforcement may be affected by bankruptcy, reorganization, insolvency and
creditors’ rights and by the availability of injunctive relief, specific
performance and other equitable remedies).
     D. The Shares, when issued upon exchange for the Sponsor Warrants pursuant
to the terms of this Agreement, will be duly authorized and, upon issuance and
delivery to Holder as contemplated herein, will be validly issued, fully paid
and non-assessable.
5. CONDITIONS TO THE PARENT’S OBLIGATIONS TO CLOSE. Parent’s obligation
hereunder to effect the Exchange is subject to the satisfaction, on or before
the Closing Date, of the following conditions, and Holders shall cause such
conditions to be fulfilled:
     A. Parent shall have received from Holders original Sponsor Warrants, or in
lieu thereof, irrevocable instructions to the Escrow Agent holding the Sponsor
Warrants pursuant to the Securities Escrow Agreement among the parties hereto
and the Escrow Agent, directing their release to Parent.
     B. The Exchange shall not be prohibited by any applicable law or
governmental regulation.
     C. All documents necessary to implement the transactions contemplated
herein shall have been executed and/or delivered by Holders to Parent and shall
be satisfactory in form and substance to Parent.

4

--------------------------------------------------------------------------------

 

     D. The representations and warranties of Holders contained in this
Agreement shall be true and correct when made and at the time of the Closing as
though made at such time, and Holders shall have performed or complied with the
covenants, conditions and agreements contained in this Agreement at or prior to
the Closing.
     E. The Merger shall have been consummated.
     F. The Insider Warrant Lock-Up Agreements shall be in full force and effect
in accordance with their terms.
6. CONDITIONS TO HOLDERS’ OBLIGATION TO CLOSE. Each Holder’s obligation
hereunder to effect the Exchange is subject to the satisfaction, on or before
the relevant Closing Date, of the following conditions, and Parent shall use
reasonable best efforts to cause such conditions to be fulfilled:
     A. The representations and warranties of Parent contained in this Agreement
or in connection with the transactions contemplated hereby, shall be true and
correct when made and at the time of the Closing as though made at such time,
and Parent shall have performed or complied with the covenants, conditions and
agreement contained in this Agreement at or prior to the Closing.
     B. The Exchange shall not be prohibited by any applicable law or
governmental regulation.
     C. Parent shall have delivered to Holders stock certificates representing
the Shares evidencing the issuance of the Shares by Parent to Holders.
     D. The Merger shall have been consummated.
7. REGISTRATION RIGHTS. Upon completion of the transactions contemplated by this
Agreement, and as partial consideration for the Exchange, Parent hereby agrees,
upon the closing of the transactions contemplated by the Business Combination
Agreement and at Parent’s expense, to file an appropriate registration statement
with the Securities and Exchange Commission covering all of the Shares in
accordance with the terms of the Registration Rights Agreement.
8. CONSENT TO AMENDMENT. This Agreement may not be amended except in writing by
each Holder and Parent.
9. FURTHER ASSURANCES. From time to time each party hereto will execute and
deliver to the other party such other instruments, certificates, agreements and
documents and will take such other action and do all other things as may be
reasonably requested by Parent or the Holders in order to implement or
effectuate the terms and provisions of this Agreement.

5

--------------------------------------------------------------------------------

 

10. TRANSFER TAXES. Any and all present or future transfer taxes and all
liabilities with respect thereto attributable to the Exchange shall be borne by
the Holders. If Parent is required by any applicable law to pay any transfer
taxes from or in respect of any Shares to be exchanged hereunder, Parent shall
pay the full amount of such transfer taxes to the relevant taxation authority or
other authority in accordance with applicable law and would, in turn, deduct
such amount from the consideration to be received by the Holders pursuant to
this Agreement in a manner that may reduce the number of Shares that Parent is
required to exchange with the Holders pursuant to this Agreement.
10. SUCCESSORS AND ASSIGNS. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and permitted assigns of the parties
hereto. This Agreement and the obligations hereunder shall not be assignable by
Holders or Parent without express written consent to such assignment, which
consent shall not be unreasonably withheld by the party from which such consent
is sought.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed wholly within the State of Delaware.
12. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
[Signature page to follow]

6

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, Holders and Parent have executed this Agreement as of
the date first above written.

                      HOLDERS:       PARENT:    
 
                   
57th Street GAC Holdings LLC
      57th Street General Acquisition Corp.    
 
                   
By:
Name:
  /s/ Paul D. Lapping
 
Paul D. Lapping       By:
Name:   /s/ Paul D. Lapping
 
Paul D. Lapping    
Title:
  Managing Member       Title:   CFO, Secretary & Treasurer    
 
                    Morgan Joseph TriArtisan LLC                
 
                   
By:
  /s/ Mary Lou Malanoski                
 
                   
Name:
  Mary Lou Malanoski                
Title:
  Vice Chair                
 
                    Ladenburg Thalmann & Co., Inc.                
 
                   
By:
  /s/ Steven Kaplan                
 
                   
Name:
  Steven Kaplan                
Title:
  Managing Director                
 
                    I-Bankers Securities Incorporated                
 
                   
By:
  /s/ Shelley Gluck                
 
                   
Name:
  Shelley Gluck                
Title:
  CEO                
 
                    Maxim Group LLC                
 
                   
By:
  /s/ James Siegel                
 
                   
Name:
  James Siegel                
Title:
  Co-General Counsel                
 
                    Rodman & Renshaw, LLC                
 
                   
By:
  /s/ John Borer                
 
                   
Name:
  John Borer                
Title:
  Sr. Managing Director                

7

--------------------------------------------------------------------------------

 

EXHIBIT A

                  Name   Sponsor Warrants     Shares  
57th Street GAC Holdings LLC
    3,500,000       350,000  
Morgan Joseph TriArtisan LLC
    85,000       8,500  
Ladenburg Thalmann & Co., Inc.
    85,000       8,500  
I-Bankers Securities Incorporated
    10,000       1,000  
Maxim Group LLC
    10,000       1,000(to be issued to Maxim Partners LLC)  
Rodman & Renshaw, LLC
    10,000       1,000  

8