Document:

f6k032012ex10iii_bgs.htm

Exhibit 10.3

 

March 20, 2012

BGS Acquisition Corp.

c/o Cesar Baez

152 West 57th Street, 34th Floor

New York, New York 10019

The PrinceRidge Group LLC

1633 Broadway, 28th Floor

New York, New York 10019

Attn: Stuart Sugarman

 

	
Re:

	
Initial Public Offering

Ladies and Gentlemen:

This letter (“Letter Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into, or proposed to be entered into, by and between BGS Acquisition Corp., a British Virgin Islands business company with limited liability (the “Company”) and The PrinceRidge Group LLC, as representative of the several underwriters (the “Underwriters”), relating to an underwritten initial public offering (the “Offering”) of 4,000,000 of the Company’s units (the “Units”), each comprised of one ordinary share, no par value, of the Company (“Ordinary Share”) and one warrant exercisable for one Ordinary Share (each, a “Warrant”). The Units sold in the Offering shall be listed on the NASDAQ Capital Market pursuant to a registration statement on Form F-1, No. 333-178780 (the “Registration Statement”), and prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission (the “Commission”). Certain capitalized terms used herein are defined in paragraph 15 hereof.

In order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the Offering and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Julio Gutierrez (“Gutierrez”), each Initial Investor and each officer and director of the Company (each, including Gutierrez, an “Insider”) hereby agree with the Company as follows:

1.           Each Insider hereby agrees that if the Company seeks shareholder approval of a proposed Business Combination, then in connection with such proposed Business Combination, such Insider shall vote all Ordinary Shares held and any shares acquired by such Insider in the Offering or the secondary public market in favor of such proposed Business Combination.

  

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2. (a)     Each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 15 months (or 18 months if the Company has entered into a definitive agreement with a target company within such 15 month period but has not yet consummated a Business Combination) from the closing date of the Offering  (the “Termination Date”), such Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, redeem the Public Shares held by the Public Shareholders, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest, but net of taxes payable and net of interest withdrawn for working capital purposes, divided by the number of then outstanding Public Shares held by Public Shareholders, subject in each case to the Company’s obligations under British Virgin Islands law to provide for claims of creditors and other requirements of applicable law and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining shareholders, as part of the Company’s plan of dissolution and liquidation subject, in each case, to the Company’s obligations under British Virgin Islands law to provide for claims of creditors and the requirements of other applicable law.

(b)         Each of the Company and the Insiders hereby agrees not to propose any amendment to the Company's amended and restated memorandum and articles of association that would affect the substance or timing of the Company's redemption obligation, as described in the Registration Statement and Prospectus.

(c)         Each Insider acknowledges that such Insider has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the Trust Account with respect to any securities of the Company, other than any Public Shares that may be held by such Insider.

(d)         Each Insider hereby further waives, with respect to any Ordinary Shares held by such Insider, any redemption rights such Insider may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a shareholder vote to approve such Business Combination or in the context of a tender offer made by the Company to purchase Ordinary Shares (although each Insider shall be entitled to redemption and liquidation rights with respect to any Public Shares) such Insider holds if the Company fails to consummate a Business Combination on or prior to the Termination Date.

3. (a)     To the extent that the Underwriters do not exercise their over-allotment option to purchase an additional 600,000 Units (as described in the Registration Statement and the Prospectus), Gutierrez shall return to the Company for cancellation, at no cost, the number of Founder Shares held by Gutierrez determined by multiplying 200,000 by a fraction: (i) the numerator of which is 600,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 600,000.  Gutierrez further agrees that to the extent that: (A) the size of the Offering is increased or decreased and (B) Gutierrez has either purchased or sold Ordinary Shares or an adjustment to the number of Founder Shares has been effected by way of a stock split, stock dividend, reverse stock split, contribution back to capital or otherwise, in each case in connection with such increase or decrease in the size of the Offering, then, (x) the references to 600,000 in the numerator and denominator of the formula in the immediately preceding sentence shall be changed to a number equal to 15% of the number of Units issued in the Offering and (y) the reference to 200,000 in the formula set forth in the immediately preceding sentence shall be adjusted to such number of Founder Shares that Gutierrez would have to return to the Company in order to hold 25% of the Company’s issued and outstanding Ordinary Shares after the Offering (assuming the Underwriters do not exercise their over-allotment option).

  

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(b)         In the case of any of the Founder Shares owned by Gutierrez that are not subject to forfeiture pursuant to paragraph 3(a) above, until such time (such applicable period set forth below being the “Founder Lock-Up Period”) as (A) (i) with respect to 20% of the Founder Shares, upon consummation of the Business Combination; (ii) with respect to 20% of the Founder Shares, when the closing price of the Ordinary Shares exceeds $12.00 for any 20 trading days within a 30 trading day period following the consummation of the Business Combination; (iii) with respect to 20% of the Founder Shares, when the closing price of the Ordinary Shares exceeds $13.50 for any 20 trading days within a 30 trading day period following the consummation of the Business Combination; (iv) with respect to 20% of the Founder Shares, when the closing price of the Ordinary Shares exceeds $15.00 for any 20 trading days within a 30 trading day period following the consummation of the Business Combination; and (v) with respect to 20% of the Founder Shares, when the closing price of the Ordinary Shares exceeds $17.00 for any 20 trading days within a 30 trading day period following the consummation of the Business Combination (in all cases, as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like); and (B) with the respect to 100% of the Founder Shares, the consummation by the Company of any liquidation, acquisition, share exchange, share reconstruction and amalgamation or contractual control arrangement or other similar transaction subsequent to the consummation of the initial Business Combination which results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property or results in the directors and officers of the Company ceasing to comprise a majority of the board of directors (in the case of directors) or management (in the case of the officers) of the surviving entity, Gutierrez shall not, except as described in the Registration Statement and the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”), with respect to the Founder Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Founder Shares, whether any such transaction is to be settled by delivery of the Ordinary Shares or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (b)(i) or (b)(ii).

(c)         Until 30 days after the consummation of the Business Combination (“Investor Warrant Lock-Up Period”), the Initial Investors shall not, except as described in the Registration Statement, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to the Investor Warrants or shares of Common Stock underlying the Investor Warrants, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Investor Warrants or shares of Common Stock underlying the Investor Warrants, whether any such transaction is to be settled by delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (c)(i) or (c)(ii).

  

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(d)         Notwithstanding the provisions contained in paragraph 3(b) herein, an Insider may transfer any of the Founder Shares: (i) to the Company’s officers or directors, any affiliates or family members of any of such officers or directors, Gutierrez, or any affiliates of Gutierrez; (ii) by gift to a member of Gutierrez’s immediate family or to a trust, the beneficiary of which is Gutierrez or a member of Gutierrez’s immediate family, an affiliate of Gutierrez or to a charitable organization; (iii) by virtue of laws of descent and distribution upon death of an Insider; (iv) pursuant to a qualified domestic relations order; (v) in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or (vi) in the event that the Company consummates a liquidation, merger, stock exchange or other similar transaction that results in all of its shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the consummation of the Company’s initial Business Combination; provided, however, that, in the case of clauses (i) through (v), these permitted transferees enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in paragraph 3(b) herein.

(e)         Notwithstanding the provisions contained in paragraph 3(c) herein, an Initial Investor may transfer any of the Investor Warrants: (i) to the Company’s officers or directors, any affiliates or family members of any of such officers or directors, Gutierrez, or any affiliates of Gutierrez; (ii) by gift to a member of such Initial Investor’s immediate family or to a trust, the beneficiary of which is such Initial Investor or a member of such Initial Investor’s immediate family, an affiliate of such Initial Investor or to a charitable organization; (iii) by virtue of laws of descent and distribution upon death of an Initial Investor; (iv) pursuant to a qualified domestic relations order; (v) in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or (vi) in the event that the Company consummates a liquidation, merger, stock exchange or other similar transaction that results in all of its shareholders having the right to exchange their Ordinary Shares for cash, securities or other property subsequent to the consummation of the Company’s initial Business Combination; provided, however, that, in the case of clauses (i) through (v), these permitted transferees enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in paragraph 3(c) herein.

(f)          Further, each Insider agrees that after the Founder Lock-Up Period or the Investor Lock-up Period, as applicable, has elapsed, the Founder Shares or Investor Warrants owned by such Insider shall only be transferable or saleable pursuant to a sale registered under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an available exemption from registration under the Securities Act. The Company and each Insider acknowledge that pursuant to that certain registration rights agreement to be entered into between the Company and the Insiders, the Insiders may request that a registration statement relating to the Founder Shares or the Investor Warrants be filed with the Commission prior to the end of the Founder Lock-Up Period or the Investor Lock-up Period, as applicable; provided, however, that such registration statement does not become effective prior to the end of the Founder Lock-Up Period or the Investor Lock-up Period, as applicable.

  

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(g)         Subject to the limitations described herein, each Insider shall retain all of its rights as a securityholder during the Founder Lockup Period and Investor Warrant Lockup Period, as applicable, including, without limitation, the right to vote any Founder Shares.

(h)         During the Founder Lock-Up Period or the Investor Warrant Lock-Up Period, as the case may be, all dividends payable in cash with respect to such securities shall be paid, as applicable, to each Insider, but all dividends payable in Ordinary Shares or other non-cash property and all additional Warrants issuable in accordance with the terms of the Investor Warrants shall become subject to the applicable lock-up period as described herein and shall be released from such lock-up in accordance with the provisions of this paragraph 3.

4.           Without limiting the provisions of paragraph 3 hereof, during the period commencing on the date of the Underwriting Agreement and ending 180 days after such date, each Insider shall not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to any Units, Ordinary Shares, Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares owned by such Insider, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, Ordinary Shares, Warrants or any securities convertible into, or exercisable, or exchangeable for, Ordinary Shares owned by such Insider, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii).

5.           In the event of the liquidation of the Trust Account without the consummation of a Business Combination, Gutierrez (the “Indemnitor”) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as a result of any claim by (i) any third party for services rendered or products sold to the Company or (ii) a prospective target business with which the Company has entered into an acquisition agreement with (a “Target”); provided, however, that such indemnification of the Company by the Indemnitor shall apply only to the extent necessary to ensure that such claims by a third party for services rendered (other than the Company’s independent public accountants) or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below $10.15 (or approximately $10.09 if the over-allotment is exercised in full) per Public Share, and, provided, further, that only if such third party or Target has not executed an agreement waiving claims against and all rights to seek access to the Trust Account whether or not such agreement is enforceable. In the event that any such executed waiver is deemed to be unenforceable against such third party, the Indemnitor shall not be responsible for any liability as a result of any such third party claims. Notwithstanding any of the foregoing, such indemnification of the Company by the Indemnitor shall not apply as to any claims under the Company’s obligation to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act. The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor shall notify the Company in writing that the Indemnitor shall undertake such defense.

  

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6. (a)     In order to minimize potential conflicts of interest that may arise from multiple corporate affiliations, each officer and director of the Company or any person who is party to this Agreement and who is deemed a fiduciary of the Company under the British Virgin Islands Business Companies Act, 2004, hereby agrees that until the earliest of the Company’s initial Business Combination, liquidation or such time as such party ceases to be an officer or director of the Company, such person shall present to the Company for its consideration, prior to presentation to any other entity, any suitable Business Combination opportunities of which such person or companies or entities which such person manages or controls becomes aware, subject to any pre-existing fiduciary or contractual obligations such party previously disclosed to the Company.

(b)         Each of the undersigned understands that the Company may effect a Business Combination with a single target business or multiple target businesses simultaneously and agrees that the undersigned will not participate in the formation of, or become an officer or director of, any black check company, until the earlier of such time as the Company has entered into a definitive agreement regarding its initial Business Combination, the Company has failed to complete an initial Business Combination on or prior to the Termination Date or such person ceases to be an officer and/or director of the Company; provided, however, that nothing contained herein is currently directly or indirectly associated or affiliated or by whom the undersigned is currently employed.

(c)         Each of the undersigned hereby agrees and acknowledges that (i) each of the Underwriters and the Company would be irreparably injured in the event of a breach by the undersigned of his or its obligations under paragraphs 6(a) and/or 6(b) hereof, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.

7.           Each Insider’s biographical information furnished to the Company is true and accurate in all material respects and does not omit any material information with respect to such Insider’s background. Each of the questionnaires furnished to the Company by each Insider is true and accurate in all material respects.

8.           Each Insider represents and warrants that:

(a)         such Insider not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;

  

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(b)         such Insider has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in any such criminal proceeding; and

(c)         such Insider has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.

9.           None of the Insiders or any of their respective affiliates will receive any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is), other than the following:

(a)         repayment of an aggregate of $176,760 in loans and advances made to the Company by Gutierrez, to cover offering-related and organizational expenses, which loan is to be repaid out of the proceeds of the Offering upon the closing of the Offering;

(b)         reimbursement for any out-of-pocket expenses related to identifying, investigating and consummating an initial Business Combination, provided that no proceeds of the Offering held in the Trust Account may be applied to the payment of such expenses prior to the consummation of the initial Business Combination, except to the extent paid out of the interest earned on the funds held in the Trust Account (net of taxes payable) that may be released to the Company to fund working capital requirements; and

(c)         repayment of up to $500,000 (or a higher amount) in loans made by Gutierrez, to finance transaction costs in connection with an intended initial Business Combination, provided that if the Company does not consummate an initial Business Combination, it may use a portion of the Offering proceeds held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment.  Such loans may be convertible into warrants of the post Business Combination entity at a price of $0.75 per warrant at the option of Gutierrez.

10.         Each Insider acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations, and warranties set forth herein in proceeding with the Offering.

11.         To the extent applicable, each Insider authorizes any employer, financial institution, or consumer credit reporting agency to release to the Underwriters and their legal representatives or agents (including any investigative search firm retained by the Underwriters) any information they may have about such Insider’s background and finances (“Information”), purely for the purposes of the Offering (and shall thereafter hold such information confidential).  Neither the Underwriters nor its agents shall be violating such Insider’s right of privacy in any manner in requesting and obtaining the Information and each Insider hereby releases them from liability for any damage whatsoever in that connection.

  

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12.         Each Insider acknowledges and agrees that the Company will not consummate any Business Combination with any company with which such person has had any discussions, formal or otherwise, prior to the consummation of the Offering, with respect to a Business Combination.

13.         Each Insider acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any Insider unless the Company obtains an opinion from an independent investment banking firm that the Business Combination is fair to the Company’s shareholders from a financial perspective.

14.         Each Insider has full right and power, without violating any agreement to which he, she or it is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and to serve as an officer of the Company or as a director on the board of directors of the Company, as applicable, and hereby consents to being named in the Registration Statement and the Prospectus as an officer and/or as a director of the Company, as applicable.

15.         As used in this Letter Agreement, (i) “Business Combination” shall mean the initial acquisition, share exchange, share reconstruction and amalgamation or contractual control arrangement with, or purchase of, all or substantially all of the assets of, or engaging in any other similar business combination with, one or more businesses by the Company; (ii) “Founder Shares” shall mean the 1,533,333 Ordinary Shares acquired by Gutierrez for an aggregate purchase price of $25,000, or approximately $0.014 per share, prior to the consummation of the Offering; (iii) “Initial Investors” shall mean the investors who are named in the Registration Statement and the Prospectus as “initial investors”; (iv) “Investor Warrants” shall mean the 3,000,000 warrants (as may be adjusted) of the Company purchased by the Initial Investors, with each warrant exercisable for one Ordinary Share at $10.00 per share (as may be adjusted), for an aggregate purchase price of $2,250,000, or $0.75 per warrant; (v) “Public Shareholders” shall mean the holders of securities issued in the Offering, provided that any Insider that acquires any such securities shall be a Public Shareholder only in respect of the Public Shares held by such Insider; (vi) “Public Shares” shall mean the Ordinary Shares sold as part of the Units in the Offering; and (vii) “Trust Account” shall mean the trust account into which a portion of the net proceeds of the Offering and the private placement will be deposited.

16.         BGS Group SA, an affiliate of Gutierrez, has agreed that commencing on the date of the Offering, it will provide to the Company at no cost, office space, secretarial, and administrative services until the earlier of (a) the successful completion of the Business Combination, or (b) the date on which the Company is dissolved and liquidated.

17.         This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by the parties hereto.

  

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18.         No party may assign either this Letter Agreement or any of his, her or its rights, interests, or obligations hereunder without the prior written consent of the Underwriter. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on each Insider and each of such Insider’s heirs, personal representatives, successors and assigns.  Each of the parties hereto (other than the Underwriters) hereby appoints, without power of revocation, Cesar Baez, with an office at 152 West 52nd Street, 34th Floor, New York, New York 10019, as its agent to accept and acknowledge on its behalf service of any and all process which may be served in any action, proceeding or counterclaim in any way relating to or arising out of this letter agreement.

19.         This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. Each Insider (i) agrees that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York, in the State of New York, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waives any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.

20.         Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery, electronic or facsimile transmission.

21.         This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Lock-Up Period or the Investor Warrant Lockup Period, as applicable, or (ii) the liquidation of the Trust Account; provided, however, that this Letter Agreement shall earlier terminate in the event that the Offering is not consummated; and, provided, further, that paragraph 5 of this Letter Agreement shall survive any liquidation of the Company.

[Signature page follows]

 

  

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Sincerely,

	 	 	 	 
	 	 	
/s/Julio Gutierrez

	 
	 	 	
Julio Gutierrez

	 

 

	
 

	 	
/s/Rolando Horman

	 
	 	 	
Rolando Horman

	 

	
 

	 	
/s/Mariana Gutierrez Garcia

	 
	 	 	
Mariana Gutierrez Garcia

	 

 

	
 

	 	
/s/Cesar Baez

	 
	 	 	
Cesar Baez

	 

	
 

	 	
/s/Alan Menkes

	 
	 	 	
Alan Menkes

	 

 

	 	 	
/s/Gustavo Garrido

	 
	 	 	
Gustavo Garrido

	 

 

	 	 	
/s/Julian Diaz Bortolotti

	 
	 	 	
Julian Diaz Bortolotti

	 

 

	
 

	 	
/s/Federico Bertoldo

	 
	 	 	
Federico Bertoldo

	 

 

	
 

	 	
/s/Claudia Gomez

	 
	 	 	
Claudia Gomez

	 

	 	 	
/s/John Grabski

	 
	 	 	
John Grabski

	 

	 	
BGS Group, SA

	 
	 	 	 	 
	 	
By: 

	
/s/Julio Gutierrez

	 
	 	By:	Julio Gutierrez	 
	 	Title:	President	 

 

  

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Acknowledged and Agreed:

 

BGS ACQUISITION CORP.

 

By: /s/ Cesar Baez

Name: Cesar Baez

Title: Chief Executive Officer

THE PRINCERIDGE GROUP LLC

 

By: /s/Jeff Silberman

Name: Jeff Silberman

Title: General Counsel

 

11f6k032012ex10iv_bgs.htm

Exhibit 10.4

WARRANT PURCHASE AGREEMENT

This WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of the 20th day of March, 2012, by and between BGS Acquisition Corp., a British Virgin Islands business company (the “Company”), having its principal place of business at BGS Group International, Olazabal 1150, Ciudad Autonoma de Buenos Aires Argentina 1428, and each of the parties listed on Schedule A (each, an “Investor” and collectively, the “Investors”).

WHEREAS, the Company desires to sell on a private placement basis (the “Offering”) an aggregate of 266,667 warrants (the “Warrants”) of the Company for a purchase price of $0.75 per Warrant, with each Warrant exercisable to purchase one ordinary share of the Company, no par value (the “Ordinary Shares”), at an exercise price of $10.00 per Ordinary Share, during the period commencing on the later of: (i) one (1) year from the date of the closing of the Company’s IPO (as defined below) or (ii) thirty (30) days after the consummation of an acquisition, share exchange, contractual control arrangement with, purchase of all or substantially all of the assets of, or any other similar business combination with one or more operating businesses or assets (a “Business Combination”) and expiring on the fifth (5th) anniversary of the consummation of such Business Combination (but subject to the provisions of Section 10 of this Agreement);

WHEREAS, the Investors wish to purchase the Warrants and the Company wishes to accept such subscription.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors hereby agree as follows:

1. Agreement to Subscribe

1.1. Purchase and Issuance of the Warrants. Upon the terms and subject to the conditions of this Agreement, the Investors hereby agree to purchase from the Company, and the Company hereby agrees to sell to the Investors, on the Closing Date (as defined in Section 1.2), the Warrants for an aggregate purchase price of $200,000 (the “Purchase Price”).

1.2. Closing. The closing (the “Closing”) of the Offering, shall take place at the offices of Ellenoff Grossman & Schole LLP, 150 East 42nd Street, New York, New York, 10017 on or prior to the effective date of the registration statement relating to the Company’s initial public offering (“IPO”) of 4,000,000 units consisting of Ordinary Shares and warrants (the “Closing Date”).

1.3. Delivery of the Purchase Price. At least one business day prior to the Closing Date, each Investor agrees to deliver the Purchase Price for the number of Warrants, each as set forth next to such Investor’s name on Schedule A, by certified bank check or wire transfer of immediately available funds denominated in United States Dollars either: (i) to Ellenoff Grossman & Schole LLP, which is hereby irrevocably authorized to deposit such funds at least one business day prior to the Closing to the trust account which will be established for the benefit of the Company’s public shareholders, managed pursuant to that certain Investment Management Trust Agreement to be entered into by and between the Company and a trustee and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account ”) or (ii) directly into the Trust Account.  If the IPO is not consummated, the Purchase Price received from such Investor shall be returned to Investor as soon as practicable by certified bank check or wire transfer of immediately available funds denominated in United States Dollars.

1.4. Delivery of Warrant Certificate.  Upon delivery of the Purchase Price in accordance with Section 1.3, each Investor shall become irrevocably entitled to receive a warrant certificate representing the number of Warrants set forth next to such Investor’s name on Schedule A; provided however, if the Company notifies the Investors that the IPO will not be consummated and the Purchase Price will be returned in accordance with the last sentence of Section 1.3, the Company shall have no obligation to provide any such certificate representing the Warrants to the Investors.

  

  

  

2. Representations and Warranties of Investor

Each Investor represents and warrants to the Company, solely as to himself, that:

2.1. No Government Recommendation or Approval. Investor understands that no United States federal or state agency or similar agency of any other country has passed upon or made any recommendation or endorsement of the Company, the Offering or the Ordinary Shares underlying the Warrants (the “Warrant Shares ” and, collectively with the Warrants, the “Securities”).

2.2. Authority.   This Agreement has been validly executed and delivered by Investor and upon execution and delivery by Investor, this Agreement is a legal, valid and binding agreement of Investor, enforceable against Investor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

2.3. Intent.  Investor is purchasing the Securities solely for investment purposes, for such Investor’s own account and not with a view to the distribution thereof and Investor has no present arrangement to sell the Securities to or through any person or entity except as may be permitted under the Insider Letter (as defined below).  Investor shall not engage in hedging transactions with regard to the Securities unless in compliance with the Securities Act.

2.4. Private Offering.  Investor represents that it is (a) an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) or (b) not a “U.S. Person” as defined in Rule 902 of Regulation S (“Regulation S”) under the Securities Act.  Investor acknowledges that the sale contemplated hereby is being made in reliance on a private placement exemption to “Accredited Investors” within the meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under state law or to a non-U.S. Person under Regulation S.

2.5. No Conflicts.  The execution, delivery and performance of this Agreement and the consummation by Investor of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i)  any agreement, indenture or instrument to which Investor is a party or (ii) any law, statute, rule or regulation to which Investor is subject, or any agreement, order, judgment or decree to which Investor is subject.

2.6. No Legal Advice from Company.  Investor acknowledges it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement and the other agreements entered into between the parties hereto with Investor’s own legal counsel and investment and tax advisors.  Except for any statements or representations of the Company made in this Agreement and the other agreements entered into between the parties hereto, Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

2.7. Access to Information; Independent Investigation.  Prior to the execution of this Agreement, Investor has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained.  In determining whether to make this investment, Investor has relied solely on Investor’s own knowledge and understanding of the Company and its business based upon Investor’s own due diligence investigation and the information furnished pursuant to this paragraph.  Investor understands that no person has been authorized to give any information or to make any representations which were not furnished pursuant to this Section 2 and Investor has not relied on any other representations or information in making his investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.

2.8. Reliance on Representations and Warranties.  Investor understands the Warrants are being offered and sold to it in reliance on exemptions from the registration requirements under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Investor set forth in this Agreement in order to determine the applicability of such provisions.

  

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2.9. No Advertisements.  Investor is not subscribing for the Warrants as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting.

2.10. Legend.  Investor acknowledges and agrees the certificates evidencing the Warrants and the Warrant Shares shall bear a restrictive legend (the “Legend”), in form and substance as set forth in Section 4 hereof, prohibiting the offer, sale, pledge or transfer of the securities, except (i) pursuant to an effective registration statement covering these securities under the Securities Act or (ii) pursuant to any other exemptions from the registration requirements under the Securities Act and such laws which, in the opinion of counsel for the Company, is available.

2.11. Experience, Financial Capability and Suitability.  Investor is (i) sophisticated in financial matters and is able to evaluate the risks and benefits of his investment in the Securities and (ii) able to bear the economic risk of his investment in the Securities for an indefinite period of time because the Securities have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.  Investor has substantial experience in evaluating and investing in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of his investment in the Company and has the capacity to protect his own interests.  Investor must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale.  Investor is able to bear the economic risks of an investment in the Securities and to afford a complete loss of Investor’s investment in the Securities.

2.12. Investment Purposes.  Investor is purchasing the Securities solely for investment purposes, for Investor’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof and Investor has no present arrangement to sell the interest in the Securities to or through any person or entity.

2.13. Restrictions on Transfer.  Investor acknowledges and understands the Warrants are being offered in a transaction not involving a public offering in the United States within the meaning of the Securities Act.  The Securities have not been registered under the Securities Act, and, if in the future Investor decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only (A) pursuant to an effective registration statement filed under the Securities Act, (B) pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act (“Rule 144”), if available, or (C) pursuant to any other available exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any other jurisdiction. Investor agrees that if any transfer of his Securities or any interest therein is proposed to be made, as a condition precedent to any such transfer, Investor may be required to deliver to the Company an opinion of counsel satisfactory to the Company.  Absent registration or another available exemption from registration, Investor agrees it will not resell the Securities. Investor further acknowledges that because the Company is a shell company Rule 144 may not be available to Investor for the resale of the Securities until the one year anniversary following the consummation of the initial Business Combination of the Company and the filing of the applicable “Form 10 Information” in respect of such initial Business Combination, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

2.14. Sophisticated Investor.

 

(i)  Investor is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Securities.

(ii) Investor is aware that an investment in the Warrants is highly speculative and subject to substantial risks because, among other things, the Securities have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Investor is able to bear the economic risk of its investment in the Securities for an indefinite period of time.

  

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2.15. Independent Investigation.  Investor, in making the decision to purchase the Warrants, has relied upon an independent investigation of the Company and has not relied upon any information or representations made by any third parties or upon any oral or written representations or assurances from the Company, its officers, directors or employees or any other representatives or agents of the Company, other than as set forth in this Agreement. Investor is familiar with the business, operations and financial condition of the Company and has had an opportunity to ask questions of, and receive answers from the Company’s officers and directors concerning the Company and the terms and conditions of the offering of the Warrant and has had full access to such other information concerning the Company as Investor has requested.  Investor confirms that all documents that it has requested have been made available and that Investor has been supplied with all of the additional information concerning this investment which Investor has requested.

2.16. No Conflicts. The execution, delivery and performance of this Agreement and the consummation by Investor of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) Investor’s charter documents, (ii) any agreement, indenture or instrument to which Investor is a party or (iii) any law, statute, rule or regulation to which Investor is subject, or any agreement, order, judgment or decree to which Investor is subject.

3. Representations and Warranties of the Company

The Company represents and warrants to each Investor that:

3.1. Valid Issuance of Share Capital. The total number of all classes of share capital which the Company has authority to issue is (i) an unlimited number of Ordinary Shares and (ii) an unlimited number of preferred shares consisting of Classes A through E.  As of the date hereof, the Company has issued 1,533,333 Ordinary Shares (of which 200,000 of such Ordinary Shares are subject to forfeiture as described in the registration statement related to the IPO) and no preferred shares issued and outstanding.  All of the issued shares of the Company have been duly authorized, validly issued, and are fully paid and non-assessable.

3.2. Title to Warrants. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, each of the Warrants and the Warrant Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, the Investors will have or receive good title to the Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) any transfer restrictions hereunder and under the other agreements contemplated hereby and (ii) transfer restrictions under federal and state securities laws.

3.3. Organization and Qualification. The Company has been duly incorporated and is validly existing as a British Virgin Islands business company and has the requisite corporate power to own its properties and assets and to carry on its business as now being conducted.

3.4. Authorization; Enforcement. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Warrants and the Warrant Shares in accordance with the terms hereof, (ii) the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or shareholders is required, and (iii) this Agreement constitutes, and upon the execution and delivery thereof, the Warrants and the Warrant Agreement will constitute, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by equitable principles of general application and except as enforcement of rights to indemnity and contribution may be limited by federal and state securities laws or principles of public policy.

3.5. No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not (i) result in a violation of the Company’s Memorandum and Articles of Association, (ii) conflict with, or constitute a default under any agreement, indenture or instrument to which the Company is a party or (iii) any law statute, rule or regulation to which the Company is subject or any agreement, order, judgment or decree to which the Company is subject. Other than any Securities and Exchange Commission, state or foreign securities filings which may be required to be made by the Company subsequent to the Closing, and any registration statement which may be filed pursuant thereto, the Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or self-regulatory entity in order for it to perform any of its obligations under this Agreement or issue the Warrants or the Warrant Shares in accordance with the terms hereof.

  

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4. Legends

4.1. Legend. The Company will issue the Warrants, and when issued, the Warrant Shares, purchased by an Investor, in the name of such Investor.  The Securities will bear the following or substantially similar Legend and appropriate “stop transfer” instructions:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED UNTIL THIRTY DAYS AFTER BGS ACQUISITION CORP. (THE “COMPANY”) COMPLETES ITS BUSINESS COMBINATION (AS DEFINED IN THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN THE WARRANT AGREEMENT REFERRED TO HEREIN) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.

FOR A PERIOD OF 180 DAYS IMMEDIATELY FOLLOWING THE DATE OF EFFECTIVENESS OF THE REGISTRATION STATEMENT, THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL NOT DIRECTLY OR INDIRECTLY, OFFER, SELL, AGREE TO OFFER OR SELL, TRANSFER, ASSIGN, PLEDGE, HYPOTHECATE OR SUBJECT TO HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE TO ANYONE OTHER THAN (I) AN UNDERWRITER OR A SELECTED DEALER PARTICIPATING IN THE INITIAL PUBLIC OFFERING OF THE COMPANY OR (II) ANY BONA FIDE SUCCESSOR, OFFICER OR PARTNER OF THE PRINCERIDGE GROUP LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

SECURITIES EVIDENCED BY THIS CERTIFICATE AND THE ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT EXECUTED BY THE COMPANY.

4.2. Investor’s Compliance. Nothing in this Section 4 shall affect in any way Investor’s obligations and agreements to comply with all applicable securities laws upon resale of the Securities.

4.3. Company’s Refusal to Register Transfer of the Securities.  The Company shall refuse to register any transfer of the Securities, if in the sole judgment of the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the Securities Act, or (ii) pursuant to an available exemption from the registration requirements of the Securities Act.

  

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4.4. Registration Rights.  Investor will be entitled to certain registration rights which will be governed by a registration rights agreement (“Registration Rights Agreement”) to be entered into with the Company on or prior to the closing of the IPO.  The Registration Rights Agreement will provide to the Investors named in Schedule A hereto the right to demand one registration at the Company’s expense for 5 years from the effective date of the registration statement for the IPO and provide them with “piggy back” registration rights for seven years from the effective date of the registration statement for the IPO.

5. Lockup

The Warrants will be subject to a lockup described in that certain insider letter to be entered into on or prior to the effective date of the registration statement relating to the IPO between each Investor and the Company pursuant to which the Warrants shall not be transferable, saleable or assignable until thirty (30) days following the consummation of a Business Combination, subject to certain limited exceptions (“Insider Letter”).  The Warrants and the Ordinary Shares underlying the Warrants have been deemed compensation by FINRA to the Investors. Therefore, pursuant to Rule 5110(g)(1) of the FINRA Manual, each Investor agrees that it will not sell, transfer, assign, pledge or hypothecate any Warrants (or any Warrant Shares) for a period of 180 days following the date of effectiveness of the registration statement for the IPO to anyone other than (i) PrinceRidge or an underwriter or selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of PrinceRidge or of any such underwriter or selected dealer.

6. Securities Laws Restrictions

Investor agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to be transferred shall then be effective or (b) the Company shall have received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction complies with the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws.

7. Waiver of Liquidation Distributions

In connection with the Securities purchased pursuant to this Agreement, Investor hereby waives any and all right, title, interest or claim of any kind in or to any distributions from the Trust Account. In no event will any Investor have the right to exercise any Warrants prior to the later of: (i) one year from the date of the closing of the IPO or (ii) thirty (30) days following the consummation of a Business Combination.

8. Forfeiture of Warrants

8.1. Failure to Consummate Business Combination. The Warrants shall be forfeited to the Company upon the liquidation of the Trust Account in the event a Business Combination is not consummated within 15 months from the closing of the IPO (or 18 months from the closing of the IPO if we have entered into a definitive agreement with a target business within such 15 month period).

8.2. Termination of Rights. If the Warrants are forfeited in accordance with this Section 8, then after such time Investor (or his successor in interest), shall no longer have any rights as a holder of such Warrants, and the Company and/or its agents shall take such action as is appropriate to cancel such Warrants on the books and records of the Company.

9. Rescission Right Waiver and Indemnification

9.1. Rescission Waiver.  Each Investor understands and acknowledges an exemption from the registration requirements of the Securities Act requires there be no general solicitation of purchasers of the Warrants.  In this regard, if the IPO were deemed to be a general solicitation with respect to the Warrants, the offer and sale of such Warrants may not be exempt from registration and, if not, the Investors may have a right to rescind the purchase of the Warrants.  In order to facilitate the completion of the Offering and in order to protect the Company, its shareholders and the Trust Account from claims that may adversely affect the Company or the interests of its shareholders, each Investor hereby agrees to waive, to the maximum extent permitted by applicable law, any claims, right to sue or rights in law or arbitration, as the case may be, to seek rescission of his purchase of the Warrants.  Each Investor acknowledges and agrees this waiver is being made in order to induce the Company to sell the Warrants to Investor.  Investor agrees the foregoing waiver of rescission rights shall apply to any and all known or unknown actions, causes of action, suits, claims or proceedings (collectively, “Claims”) and related losses, costs, penalties, fees, liabilities and damages, whether compensatory, consequential or exemplary, and expenses in connection therewith, including reasonable attorneys’ and expert witness fees and disbursements and all other expenses reasonably incurred in investigating, preparing or defending against any Claims, whether pending or threatened, in connection with any present or future actual or asserted right to rescind the purchase of the Warrants hereunder or relating to the purchase of the Warrants and the transactions contemplated hereby.

  

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9.2.   No Recourse Against Trust Account.  Each Investor agrees not to seek recourse against the Trust Account for any reason whatsoever in connection with his purchase of the Warrants or any Claim that may arise now or in the future.

9.3.   Third Party Beneficiaries.  Investor acknowledges and agrees the shareholders of the Company are and shall be third-party beneficiaries of the foregoing provisions of this Agreement to the fullest extent permissible under applicable law.

9.4.   Section 9 Waiver.  Investor agrees that, to the fullest extent permissible under applicable law, to the extent any waiver of rights under this Section 9 is ineffective as a matter of law, Investor has offered such waiver for the benefit of the Company as an equitable right that shall survive any statutory disqualification or bar that applies to a legal right. Investor acknowledges the receipt and sufficiency of consideration received from the Company hereunder in this regard.

10. Terms of the Warrant

The Warrants shall be substantially identical to the warrants included in the units offered in the IPO as set forth in the warrant agreement to be entered into with a mutually agreeable warrant agent on or prior to the closing of the IPO (the “Warrant Agreement”), except that the Warrants: (i) will be subject to the transfer restrictions described herein, (ii) are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or the resale of the Warrants is registered under the Securities Act and (iii) will be non-redeemable so long as they are held by Investor or any of his permitted transferees.  Additionally, for so long as the Warrants are held by the Investor (and/or its designees) they may not be exercised after the five year anniversary of the effective date of the registration statement for the IPO.

11. Governing Law; Jurisdiction; Waiver of Jury Trial

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions contemplated hereby.

12. Assignment; Entire Agreement; Amendment

12.1. Assignment. Neither this Agreement nor any rights hereunder may be assigned by any party to any other person other than by Investor to a person agreeing to be bound by the terms hereof.

12.2. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and supersedes any and all prior discussions, agreements and understandings of any and every nature.

12.3. Amendment.  Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

  

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12.4. Binding upon Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and permitted assigns.

13. Notices; Indemnity

13.1 Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth on the first page of this Agreement or to such other address as a party may designate by notice hereunder, and shall be either (a) delivered by hand, (b) sent by overnight courier, or (c) sent by certified mail, return receipt requested, postage prepaid.  All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by certified mail, on the fifth business day following the day such mailing is made.

13.2 Indemnification. Each party shall indemnify the other party against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement set forth in this Agreement.

14. Counterparts

This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

15. Survival; Severability

15.1. Survival. The representations, warranties, covenants and agreements of the parties hereto shall survive the Closing until the date that is one (1) year following the consummation of a Business Combination.

15.2. Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

16. Headings

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

17. Construction

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement.  The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.”  Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited.  The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance.  If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.

 

  

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This subscription is accepted by the Company as of the date first written above.

	  	
Very truly yours,

	  	  	  
	  	
BGS ACQUISITION CORP.

	  	  	  
	  	
By:

	
/s/Mariana Gutierrez Garcia

	  	
Name: Mariana Gutierrez Garcia

	  	
Title:  Chief Financial Officer

Accepted and agreed,

INVESTOR

THE PRINCERIDGE GROUP LLC

By: /s/Jeff Silberman   

Name: Jeff Silberman

Title: General Counsel

  

  

  

 

SCHEDULE A

	
Name

	
Amount of Investment

	
No. of Warrants

	  	  	  
	
The PrinceRidge Group LLC

	  	
266,667

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