SPONSOR WARRANTS PURCHASE AGREEMENT

 

THIS SPONSOR WARRANTS PURCHASE AGREEMENT, dated as of May 10, 2013 (as it may
from time to time be amended and including all exhibits referenced herein, this
“Agreement”), is entered into by and among Capitol Acquisition Corp. II., a
Delaware corporation (the “Company”), Capitol Acquisition Management 2 LLC, a
Delaware limited liability company, L. Dyson Dryden, Lawrence Calcano, Richard
C. Donaldson and Piyush Sodha (collectively, the “Purchasers”) and Graubard
Miller, as escrow agent (“Escrow Agent”).

 

The Company intends to consummate a public offering of the Company’s units (the
“Public Offering”), each unit consisting of one share of the Company’s common
stock, par value $0.0001 per share (a “Share”), and one half of one warrant to
purchase one Share at an exercise price of $11.50 per Share. The Purchasers have
agreed to purchase an aggregate of 5,200,000 warrants (the “Sponsor Warrants”),
each Sponsor Warrant entitling the holder to purchase one Share at an exercise
price of $11.50 per Share, or additional amounts of Sponsor Warrants if the
underwriters exercise their over-allotment option, up to 5,740,000 Sponsor
Warrants if the underwriters in the Public Offering exercise their
over-allotment option in full.

 

NOW THEREFORE, in consideration of the mutual promises contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby,
intending legally to be bound, agree as follows:

 

AGREEMENT

 

Section 1.          Authorization, Purchase and Sale; Terms of the Sponsor
Warrants.

 

A.           Authorization of the Sponsor Warrants. The Company has duly
authorized the issuance and sale of the Sponsor Warrants to the Purchasers.

 

B.           Purchase and Sale of the Sponsor Warrants.

 

(i)          At least 24 hours prior to the consummation of the Public Offering,
the Purchasers shall deliver an aggregate purchase price of $5,740,000 (the
“Purchase Price”) for the Sponsor Warrants to the Escrow Agent, to hold in a
non-interest bearing account. However, if the underwriters exercise their
over-allotment option in full or in part prior to the consummation of the Public
Offering, the Purchasers need only contribute all or that portion of the
additional $540,000, as applicable, for any additional Sponsor Warrants
purchased in connection with such exercise.

 

(ii)          Simultaneously with the consummation of the Public Offering (the
“Closing Date”), the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase from the Company, 5,200,000 Sponsor Warrants. At such
time, the Escrow Agent shall deposit $5,200,000 of the Purchase Price, without
interest or deduction, into the trust fund (“Trust Fund”) established by the
Company for the benefit of the Company’s public stockholders as described in the
Registration Statement, pursuant to the terms of an Investment Management Trust
Agreement to be entered into between the Company and Continental Stock Transfer
& Trust Company. On the Closing Date, upon the payment by the Purchasers of
$5,200,000 of the Purchase Price by wire transfer of immediately available funds
to the Trust Fund, the Company shall deliver certificates evidencing the
5,200,000 Sponsor Warrants duly registered in the Purchasers’ names to the
Purchasers as set forth on Exhibit A attached hereto.

 

(iii)          Simultaneously with the consummation of the over-allotment option
in the Public Offering (the “Option Closing Date”), the Company shall issue and
sell to the Purchasers, and the Purchasers shall purchase from the Company, such
number of additional Sponsor Warrants, up to a maximum of 540,000 Sponsor
Warrants, as is necessary to maintain the amount held in the Trust Fund at
$10.00 per unit sold in the Public Offering. On each Option Closing Date, upon
payment by the Purchasers of the portion of the Purchase Price related to the
additional Sponsor Warrants being purchased at each Option Closing Date by wire
transfer of immediately available funds to the Trust Fund, the Company shall
deliver certificates evidencing such additional Sponsor Warrants duly registered
in the Purchaser’s names to the Purchasers as set forth on Exhibit A attached
hereto.

 

 

 

 

C.            Terms of the Sponsor Warrants.

 

(i)           Each Sponsor Warrant shall have the terms set forth in a Warrant
Agreement to be entered into by the Company and a warrant agent, in connection
with the Public Offering (a “Warrant Agreement”).

 

(ii)           On the Effective Date, the Company and the Purchasers shall enter
into a registration rights agreement (the “Registration Rights Agreement”)
pursuant to which the Company will grant certain registration rights to the
Purchasers relating to the Sponsor Warrants and the Shares underlying the
Sponsor Warrants.

 

 

Section 2.          Representations and Warranties of the Company.  As a
material inducement to the Purchasers to enter into this Agreement and purchase
the Sponsor Warrants, the Company hereby represents and warrants to the
Purchasers (which representations and warranties shall survive the Closing Date)
that:

 

A.           Organization and Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business in every jurisdiction in which the
failure to so qualify would reasonably be expected to have a material adverse
effect on the financial condition, operating results or assets of the Company.
The Company possesses all requisite corporate power and authority necessary to
carry out the transactions contemplated by this Agreement and the Warrant
Agreement.

 

B.           Authorization; No Breach.

 

(i)           The execution, delivery and performance of this Agreement and the
Sponsor Warrants have been duly authorized by the Company as of the Closing
Date. This Agreement constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms. Upon issuance in accordance
with, and payment pursuant to, the terms of the Warrant Agreement and this
Agreement, the Sponsor Warrants will constitute valid and binding obligations of
the Company, enforceable in accordance with their terms as of the Closing Date.

 

(ii)           The execution and delivery by the Company of this Agreement and
the Sponsor Warrants, the issuance and sale of the Sponsor Warrants, the
issuance of the Shares of common stock upon exercise of the Sponsor Warrants and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Company, do not and will not as of the Closing Date (a) conflict with or
result in a breach of the terms, conditions or provisions of, (b) constitute a
default under, (c) result in the creation of any lien, security interest, charge
or encumbrance upon the Company’s capital stock or assets under, (d) result in a
violation of, or (e) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to the Certificate of
Incorporation of the Company or the By-laws of the Company, or any material law,
statute, rule or regulation to which the Company is subject, or any agreement,
order, judgment or decree to which the Company is subject, except for any
filings required after the date hereof under federal or state securities laws.

 

C.           Title to Securities. Upon issuance in accordance with, and payment
pursuant to, the terms hereof and the Warrant Agreement, the Shares issuable
upon exercise of the Sponsor Warrants will be duly and validly issued, fully
paid and nonassessable. Upon issuance in accordance with, and payment pursuant
to, the terms hereof and the Warrant Agreement, the Purchasers will have good
title to the Sponsor Warrants and the Shares issuable upon exercise of such
Sponsor Warrants, free and clear of all liens, claims and encumbrances of any
kind, other than (i) transfer restrictions hereunder and under the other
agreements contemplated hereby, (ii) transfer restrictions under federal and
state securities laws, and (iii) liens, claims or encumbrances imposed due to
the actions of the Purchasers.

 

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D.           Governmental Consents. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the consummation by the Company of any other
transactions contemplated hereby.

 

 

Section 3.          Representations and Warranties of the Purchaser.  As a
material inducement to the Company to enter into this Agreement and issue and
sell the Sponsor Warrants to the Purchasers, each of the Purchasers hereby
represents and warrants to the Company (which representations and warranties
shall survive the Closing Date) that:

 

A.           Organization and Requisite Authority. Each Purchaser possesses all
requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.

 

B.           Authorization; No Breach.

 

(i)           This Agreement constitutes a valid and binding obligation of each
Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors’ rights and to general
equitable principles (whether considered in a proceeding in equity or law).

 

(ii)           The execution and delivery by each Purchaser of this Agreement
and the fulfillment of and compliance with the terms hereof by each Purchaser
does not and shall not as of the Closing Date conflict with or result in a
breach by such Purchaser of the terms, conditions or provisions of any
agreement, instrument, order, judgment or decree to which each Purchaser is
subject.

 

C.           Investment Representations.

 

(i)            Each Purchaser is acquiring the Sponsor Warrants and, upon
exercise of the Sponsor Warrants, the Shares issuable upon such exercise
(collectively, the “Securities”) for its own account, for investment purposes
only and not with a view towards, or for resale in connection with, any public
sale or distribution thereof.

 

(ii)           Each Purchaser is an “accredited investor” as such term is
defined in Rule 501(a)(3) of Regulation D.

 

(iii)          Each Purchaser understands that the Securities are being offered
and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations and warranties of the Purchaser set forth
herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire such Securities.

 

(iv)         No Purchaser decided to enter into this Agreement as a result of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act of 1933, as amended (the “Securities Act”). 

 

(v)          Each Purchaser has been furnished with all materials relating to
the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Purchaser.
Each Purchaser has been afforded the opportunity to ask questions of the
executive officers and directors of the Company. Each Purchaser understands that
its investment in the Securities involves a high degree of risk and it has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to the acquisition of the
Securities.

 

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(vi)         Each Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Securities by the Purchaser nor have such authorities
passed upon or endorsed the merits of the offering of the Securities.

 

(vii)        Each Purchaser understands that: (a) the Securities have not been
and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless
(1) subsequently registered thereunder or (2) sold in reliance on an exemption
therefrom; and (b) except as specifically set forth in the Registration Rights
Agreement, neither the Company nor any other person is under any obligation to
register the Securities under the Securities Act or any state securities laws or
to comply with the terms and conditions of any exemption thereunder.

 

(viii)       Each Purchaser has such knowledge and experience in financial and
business matters, know of the high degree of risk associated with investments in
the securities of companies in the development stage such as the Company, are
capable of evaluating the merits and risks of an investment in the Securities
and are able to bear the economic risk of an investment in the Securities in the
amount contemplated hereunder for an indefinite period of time. Each Purchaser
has adequate means of providing for its current financial needs and
contingencies and will have no current or anticipated future needs for liquidity
which would be jeopardized by the investment in the Securities. Each Purchaser
can afford a complete loss of their investments in the Securities.

 

Section 4.          Conditions of the Purchaser’s Obligations.  The obligation
of each Purchaser to purchase and pay for the Sponsor Warrants is subject to the
fulfillment, on or before the Closing Date, of each of the following conditions:

 

A.           Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true and correct at and as of the
Closing Date as though then made.

 

B.           Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing Date.

 

C.           No Injunction. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby, which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Warrant Agreement.

 

D.           Warrant Agreement. The Company shall have entered into a Warrant
Agreement with a warrant agent on terms satisfactory to the Purchasers.

 

Section 5.          Conditions of the Company’s Obligations.  The obligations of
the Company to the Purchasers under this Agreement are subject to the
fulfillment, on or before the Closing Date, of each of the following conditions:

 

A.           Representations and Warranties. The representations and warranties
of the Purchasers contained in Section 3 shall be true and correct at and as of
the Closing Date as though then made.

 

B.           Performance. The Purchasers shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by the Purchasers on or before the
Closing Date.

 

C.           Corporate Consents. The Company shall have obtained the consent of
its Board of Directors authorizing the execution, delivery and performance of
this Agreement and the Warrant Agreement and the issuance and sale of the
Sponsor Warrants hereunder.

 

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D.           No Injunction. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby, which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Warrant Agreement.

 

E.           Warrant Agreement. The Company shall have entered into a Warrant
Agreement with a warrant agent on terms satisfactory to the Company.

 

Section 6.          Termination.

 

This Agreement may be terminated at any time if the Public Offering is not
consummated within 14 days of the date the Purchase Price is delivered to the
Escrow Agent upon the election by either the Company or Purchasers entitled to
purchase a majority of the Sponsor Warrants upon written notice to the other
party. In such event, the Escrow Agent shall return the Purchase Price to the
Purchasers, without interest or deduction.

 

 

Section 7.          Escrow Agent.

 

(i)           The Escrow Agent is serving hereunder solely as a convenience to
the parties to facilitate the purchase and sale of the Sponsor Warrants and
Escrow Agent’s sole obligation under this Agreement is to act with respect to
the Purchase Price as described in Sections 1 and 6 of this Agreement. Escrow
Agent shall not be liable to the Company or the Purchasers or any other person
or entity in respect of any act or failure to act hereunder or otherwise in
connection with serving as Escrow Agent unless Escrow Agent has acted in a
manner constituting gross negligence or willful misconduct. Each of the Company
and the Purchasers shall indemnify Escrow Agent against any claim made against
it (including reasonable attorney’s fees) by reason of it acting or failing to
act in connection with this transaction except as a result of its gross
negligence or willful misconduct.

 

(ii)          The Escrow Agent 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 sued or
presented by the proper party or parties. Escrow Agent may conclusively presume
that the Company and the Purchasers have full power and authority to instruct
Escrow Agent on behalf of such parties unless written notice to the contrary is
received by Escrow Agent.

Section 8.          Survival of Representations and Warranties.  

 

All of the representations and warranties contained herein shall survive the
Closing Date.

 

Section 9.          Definitions.  

 

Terms used but not otherwise defined in this Agreement shall have the meaning
assigned to such terms in the Registration Statement.

 

Section 10.          Miscellaneous.

 

A.           Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and 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 of the parties hereto whether so expressed or not.
Notwithstanding the foregoing or anything to the contrary herein, the parties
may not assign this Agreement, other than assignments by the Purchasers to
affiliates thereof (including, without limitation one or more of its members).

 

B.           Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

 

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C.           Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, none of which need contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same agreement.

 

D.           Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word “including” in this
Agreement shall be by way of example rather than by limitation.

 

E.           Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be construed
in accordance with the internal laws of the State of Delaware.

 

F.           Amendments. This letter agreement may not be amended, modified or
waived as to any particular provision, except by a written instrument executed
by all parties hereto.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

  COMPANY:       CAPITOL ACQUISITION CORP. II       By: /s/ Mark D. Ein    
Name: Mark D. Ein     Title: Chief Executive Officer

 

  PURCHASERS:       CAPITOL ACQUISITION MANAGEMENT 2 LLC       By: /s/ Mark D.
Ein     Name: Mark D. Ein     Title:

 

  /s/ L. Dyson Dryden   L. Dyson Dryden       /s/ Lawrence Calcano   Lawrence
Calcano       /s/ Richard C. Donaldson  

Richard C. Donaldson

      /s/ Piyush Sodha   Piyush Sodha

 

  GRAUBARD MILLER, as Escrow Agent         By: /s/ Jeffrey M. Gallant     Name:
Jeffrey M. Gallant     Title: Partner

 

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Exhibit A

 

Name of
Purchaser  Initial Purchase
Price   Initial Sponsor
Warrants   Over-Allotment
Purchase Price   Over-Allotment
Sponsor
Warrants                    Capitol Acquisition Management 2 LLC  $3,391,304  
 3,391,304   $352,174    352,174                        L. Dyson Dryden 
$1,130,435    1,130,435   $117,392    117,392                        Lawrence
Calcano  $226,087    226,087   $23,478    23,478                        Richard
C. Donaldson  $226,087    226,087   $23,478    23,478                       
Piyush Sodha  $226,087    226,087   $23,478    23,478 

 

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